Affordable Care Act: Tax Provisions & Benefits for US Citizens - Essay Sample

Introduction

The Affordable Care Act (ACA) is a healthcare reform that was enacted into 2010 by former US President Barack Obama ("Affordable Care Act", 2019). This Act encompasses several healthcare provisions that focus on extending medical insurance to uninsured Americans. To this end, the Act incorporates tax stipulations that direct how entities such as insurance providers, families, people, corporates, and government agencies should file their taxes, their responsibilities and the benefits they stand to gain. After it was enacted, the ACA created medical coverage exchanges, extended the eligibility criteria for medical aid and barred insurance providers from denying health coverage. With this brief in mind, the following sections highlight a historical overview of the ACA, the political ideology behind it and analyze the policy with regards to whether it achieved the intended goals.

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Historical Overview

Adkinson and Chung (2014) explored the issues that instigated the enactment of the ACA and its crucial features. They stated that healthcare reforms have been among the core governance issues since the beginning of the 20th century. These reforms have been sparked by concerns about a constantly increasing American population without healthcare coverage. In 1965, President Lyndon Johnson rolled out the first comprehensive coverage plan that saw the establishment of Medicaid and Medicare to provide insurance to patients from low-income backgrounds and those aged above 65 years respectively. However, these two programs were unsuccessful after their establishment since most of the Americans remained uninsured while medical expenses increased significantly. Motivated by the failures of past attempts to amend healthcare policies, an American economy at the brink of recession, and the rising healthcare costs, President Obama deemed it right to institute an inclusive policy framework that would finally realize the health outcomes that had eluded previous policies.

The rising medical costs and the number of uninsured individuals were the main concerns driving Obama's administration to formulate and sign the ACA. Ein and Jefferson (2014) explored the causes and effects of the ACA and revealed that the gross national product resulting from healthcare increased from 9% in 1980 to 16% in 2008 and was estimated to increase to 19.5% by 2017. Moreover, about 50 million Americans could not get proper healthcare services since they were not insured. This number was increasing rapidly owing to the loss of employer-sponsored medical cover and high unemployment rates. On the other hand, the insured individuals were not accessing quality medical care despite spending heavily in the services. For these reasons, there was a need for comprehensive policy amendments, which culminated in the signing of the ACA into law in March 2010.

The ACA was legislated to achieve three key objectives, which were to enhance the quality of healthcare, regulate health-related costs and guarantee access to medical services for all Americans (Adkinson & Chung, 2014). Upon further assessment of the elements of this legislation, Adkinson and Chung (2014) stated that it introduced federal subsidies that would greatly benefit uninsured patients in obtaining affordable health cover. Additionally, the legislation increased Medicaid eligibility to cover individuals within a 133% bracket from the poverty line.

All in all, like most policy-making processes, some legislators supported the ACA while others objected it. In the House of Representatives, one of the main advocates of ACA was Ted Kennedy, who was the Massachusetts senator before passing away in 2009. He led 219 other Democrats and one Republican in supporting the ACA while 176 Republican and 39 Democrats opposed it ("History and Timeline of the ACA", 2019). In the Senate, Republican senator Scott Brown, who replaced Ted Kennedy, campaigned against the ACA vehemently, forcing Democrat Senators to utilize budget reconciliation for the Act to be approved. Ultimately, the Democrats succeeded and got the majority vote to approve the bill.

Political Ideology

Kirsch (2013) explored the political context of the ACA and revealed a connection between the history of health reforms and the challenges that were faced by the legislators of this bill. One noticeable health reform in US history was the compulsory health insurance. The American Medical Association (AMA) advocated for this reform when it was introduced to the public in 1912 but later on opposed it in 1920 due to coercion by some AMA members who felt threatened by the government's push for mandatory insurance. These members feared that the government would slash their wages. The AMA would later apply this ideology in resisting proposals by President Roosevelt's administration to include medical insurance with retirement benefits to form pension schemes. The association cited an antagonism between forces advocating public health officialdom to instigate a rebellion and a medical professional body supporting the controlled experimentation of health policies to facilitate an organized evolution of the health sector.

Legislators of the ACA picked lessons from the AMA by designing the Act to achieve the desired outcomes with minimum interference on the existing healthcare structure. Kirsch (2013) stated that the idea behind designing and rolling out ACA in an organized approach was to appeal to stakeholders in the healthcare sector such as physicians, hospitals, labor unions, and the general public so that its approval and enactment process would progress with minimal industrial and public opposition that had significantly derailed past attempts.

Kirsch (2013) further stated that the methodology used by ACA legislators for health reform at the federal government level was designed in Massachusetts. These legislators appealed the support of healthcare consumers and stakeholders to collectively cover all Massachusetts residents. When they tabled the bill in the legislature, the ACA reformers utilized liberal and conservative ideologies to devise a mechanism that would appeal to the Democrats and Mitt Romney, the Republican Governor. This mechanism was anchored on the pillars of Medicare, Medicaid, the purchase of insurance by people, and the provision of insurance by employers, which existed in the then health coverage framework. Ultimately, the proposed bill would task the federal government with expanding adult and child health coverage programs to enroll more adults and children.

Kirsch (2013) continued to argue that such liberal ideologies would not only benefit individuals but insurance agencies since they would cover more clients without necessarily altering their payment structures. However, human nature dictates that some people will criticize initiatives despite being made aware of the possible benefits. In this line, Libertarians and conservatives criticized the idea of the federal government administering the country's healthcare functions. Even though their claim that ACA would grant the federal government total control of the nation's healthcare system was just mere propaganda, the ACA bestowed additional oversight and financing roles to the federal government. The libertarians and conservatives were also dissatisfied with the bill's individual obligation. The liberals further objected the ACA on ideological bases by maintaining that the proposed law did not guarantee a fully government-operated healthcare structure since insurance providers would have significant powers in managing the sector.

Policy Analysis, Advocacy and Alternatives

As Adkinson and Chung (2014) stated, the ACA was legislated to achieve three core objectives. These objectives included to enhance the quality of health services, moderate the costs of healthcare and provide health coverage for every American. The Act then set out a comprehensive strategy to achieve these objectives, where it tasked the government with instituting federal subsidies for medical services, modifying the medical practice, business and individual obligations, and developing new requirements on insurance providers. The Act also granted new financing for investigation on relative effectiveness, raised levies on high-earning individuals and manufacturers of healthcare equipment, and tied quality indicators to reimbursement.

With the above strategy implemented, the reformers expected that ACA would increase the number of insured Americans by over 30 million by 2019. Ein and Jefferson (2014) explored how modifying the Medicaid eligibility criteria was projected to assist the government the 30 million coverage target. They revealed that the ACA designers recommended that Medicaid eligibility should be expanded to cover Americans whose earnings were less than 138% of poverty. This percentage represented families earning $19530 and individuals earning $11490. Individuals with earnings between 138% and 400% of poverty were to also enjoy subsidies when purchasing insurance plans. Additionally, the state governments were ordered to expand Medicaid eligibility with the federal government catering for the additional costs of the expansion for the first three years then have the state governments cater for 10% of the additional costs from the fourth year.

Five years after the ACA was signed into law, Reisman (2015) assessed its progress in achieving the intended outcomes. He checked through current headlines and discovered that the ACA had performed beyond expectations in enhancing access to medical services for every American. For instance, a survey by Gallup data discovered an 11.9% decline in the number of adult Americans without insurance in 2015 and a 6% decline in 2013. Another survey by Rand Corporation revealed that almost 17 million Americans obtained health covers after the introduction of coverage exchanges that were required by the ACA (Reisman, 2015).

Reisman (2015) also mentioned results from a survey by Health affairs that revealed considerable expansions in medical coverage across Medicaid plans, state insurance, and employer-provided insurance. Further analysis of these expansions showed that about 3 million Americans aged between 19 and 26 years were insured under their parents' cover plans following the enactment of ACA. This increase was the most significant across the various age groups that benefited from ACA provisions. The increase was a result of the requirement that most of the insurance programs were to expand their coverage up to individuals aged 26 years. From an ethnic perspective, African Americans and Latinos, who, for a long time, lacked medical cover, also benefited from the new law. In this line, Reisman (2015) discovered that the number of uninsured Latinos dropped to 23% from 36% barely 12 months after the ACA was legislated.

Nonetheless, despite its achievement in increasing the number of insured Americans, the ACA has failed in moderating the costs of healthcare. The Medicaid program only reduces the cost of insurance for individuals near the poverty line, who benefit from federal subsidies. Rovner (2017) stated that the insurance costs and premiums have skyrocketed for the high-income earners, who could afford to purchase their cover before the ACA was enacted. This is because insurance companies raised the funds from the high-income individuals to cater for the expanded Medicaid eligibility. Additionally, the employer and individual mandates established by the ACA have also contributed to the rising premiums.

For the above reason, a possible alternative would be to amend the bill to eliminate provisions that have proved to be burdensome for most Americans. This amendment should involve stakeholders such as insurance companies, consumer groups, the American...