On March 23, 2010 Obama’s Affordable Care Act (HR 3962) and the Elder Justice Act was enacted by congress making healthcare a requirement for all Americans. The law imposes a penalty tax of $95 in 2014, and increases to $695 in 2016 for those individuals who do not have proof of insurance. The Department of Health and Human Services delivered an upbeat notice targeted to retirees titled “Medicare and the New Health Care Law—What it Means for You, A message from Kathleen Sebelius, Secretary of Health & Human Service” in May of 2010 stating that Medicare will provide a comprehensive preventive care package and health care savings is a gradual process. (Kathleen Sebelius, 2010)
Previously President Barack Obama boasted in 2009 the qualities of the proposed national healthcare system providing healthcare to all Americans, and changes to the Medicare program offering lower cost prescriptions. He placed attention towards economically struggling retirees who cannot afford the cost of co-pays and medications. His marketing campaign team designed materials focused on poverty ridden individuals who would pay attention to the idea that they would have free health care as a result of their vote. Sibelius’s 2010 announcement features large photographs of elderly people and provides an overview of the benefits for retirees warns that the prescription cost reduction is only for those that fall into a “donut hole” with gap insurance Part D and B. (Obama, President Obama: Rally for Health Insurance Reform in Minneapolis , 2009)
According to Mary Worthingham in 2013, an aging Social Security Disability recipient and Medicare Gold Advantage subscriber, the improved health care plan was implied through earlier advertisements to become a free service program. Although she no longer writes a check for Medicare premiums, Worthingham pays the premium through an unexplained deduction by the federal government which reduced her $1100 SSD payment by $109 per month which she attributes to the cost of Medicare premiums. The payment is $40 higher than previously billed. Recipients pay 20 percent co-pay for medical bills and slightly more than 20% for covered full price prescriptions. Worthingham also subscribes to Medicare Part D and B.
After development of the law Obama announced in March 2010 that the new law will force insurance companies to continue existing coverage for payers as long as the policy is paid for. In addition the law requires that insurance companies cannot deny people with preexisting conditions, and will add comprehensive healthcare screenings to health plans. It will remove annual and lifetime insurance pay-out caps and cap personal out-of-pocket expenses. This is confirmed in Sibelius’s announcement. (Obama, Obama:Ending Worst Practices Of Health Insurance Industry , 2010)
However Obama’s 2010 announcement neglected to address the fact that insurance premiums have increased 48% due to the additional service coverage and most healthcare plans are increasingly more unaffordable and unattainable for the majority of people and employers to purchase. Some resources quote the average cost of health insurance for individuals is $10,558 per person compared to 2006 rates of $4300. Part of the recovery of the cost of Medicare for upper-income Medicare beneficiaries earning $85,000 for individuals or $170,000 for married couples will have an increase in premiums. This is estimated to generate at least $500 million towards the program. (Isidore, 2012) (Health Insurance: Premiums and Increases, 2013)
The additional services mandated by the new health care law are both periodic and one-time services. The purpose of these services is to catch diseases and conditions in their earliest stages which may prevent high cost of treatment at a later stage. Some have been covered by insurance for several years such as a mammogram ($471), blood screenings ($50), prostate cancer screenings (free), and flu shot ($15). The remainder that has been incorporated into preventative care is one-time services such as a colonoscopy ($2,775), abdominal aortic aneurysm screenings ($115-335), and bone density scan ($250). The total preventative care package is valued at $3,950 which would consume $329 per month of insurance premium cost for the first year. The additional out-of-pocket cost for Medicare recipients could be up to $790 for these services or $66 per month. (Services, 2010)
The cost of prescriptions has always been a major concern for everyone. Sibelius’s announcement included discussion on the Part D gap insurance for prescriptions which will be subsidized by the government for up to $250 of the cost of the premium in 2010 and consumers will receive a 50% discount on brand name prescriptions the following year if they reach the coverage gap. By 2020 the insurance gap is expected to be closed. What that implies is that insurance will eventually cover all of the cost incurred.
Although the subsidy is a generous contribution from tax payers to millions of retirees on prescribed drugs the real problem is the cost of medication. The tax payer would prefer that congress shopped for alternative drug manufactures that provide pricing that is in alignment with the Medicare budget. The government providing competitive contracts to alternative contractors supports price wars and not monopolies.
Previously in 2010 Obama stated during a visit to Iowa that the attempt to create a national health care program would be public to keep hopeful congressmen seeking to be reelected out of backdoor negotiations with lobbyists that intend on sabotaging health care reform and keeping high cost medical care. Today although insurance companies complain about a reduction in profits, they do reap significant profits from mandatory health insurance for all citizens and the fact that they have a convenient excuse to charge higher premiums to everyone. It’s a built-in guaranteed customer base with 50 million new subscribers. Those who would receive free health care insurance would be funded with government backed tax payer dollars. The cost of medical care may drop in price at some point from where it is at today, but it does not guarantee that insurance premiums will cost less. One of the initial primary points that Obama’s early campaign on national health care made was the cost of insurance. It does not seem that rates will be restored to 2006 levels. (Obama, President Obama: Rally for Health Insurance Reform in Minneapolis , 2009)
Historical records reveal that insurance companies overcharged Medicare subscribers by $1,000 per person for premiums. Medicare overpayments to insurance companies will be aggressively eliminated. According to Selebius “in 2010 overpayments for Advantage premiums was estimated at $1,000 per person. Those funds were paid by all Medicare enrollees even those not enrolled in the Advantage program”. The federal government will reduce payments towards insurance company administrative costs and profits to a combined 15% of every dollar. Every medical billing will be scrutinized to detect waste, fraud, and insurance abuse.
The new approach to Medicare medical payments has delayed payments to service providers in an already slow pay system. Although this additional scrutiny has become necessary, it hurts medical businesses that have expenses to pay of their own. (Docs angered by low, slow Medicare payments, 2002)
As a consequence of a slow pay system there has been a historical decrease in care providers that accept Medicare patients due to insurance underpayment, denial of payment for services rendered, and weeks of waiting for payment. This has prompted thousands of letters to patients from physicians who have dropped them. The new health care law promises that the choice of doctor will be preserved and number of health care providers will be increased through educational incentives such as student loan forgiveness, training, and bonuses. This is a difficult promise to make since service providers are paid the least by Medicare in comparison to other health plans for the same services. (Roy, 2012)
Part of the government plan to increase care providers is a move towards community health services. According to Selebius there will be an increase in community health centers which will be capable of serving 20 million new patients and will work together in teams to provide informed care using shared patient information. In addition the physicians will be familiar with the patient and not different doctors each time a patient makes an appointment. The negative side of working with teams is that the process may limit a patient from getting a second opinion from someone outside of the team.
The new law according to Selebius would also provide home health care through voluntary insurance Community Living Assistance Services and Supports (CLASS). Not long after the announcement this program was closed shortly after its release due to legal risks. (The Offices of CLASS, 2011)
According to President Obama supporting health care reform “Tens of millions of working middle class Americans are one accident or illness away from bankruptcy because the cost of healthcare. Many employers don’t offer insurance and the self-employed are offered higher premiums than big corporations. People aged 55 will lose their health care in 10 years. Insurance companies will water down policies or drop patients entirely when the consumer needs coverage most. The cost of health care is a burden on businesses and tax payers and premiums are rising faster than wages. Nobody should go broke because they got sick. Small businesses will receive tax credits to assist them in affording insurance for employees.”
Although Obama acknowledges the problems that encouraged health care reform the barriers to entry still exist and are increasing. Employers who rely on minimum wage workers such as restaurants, cleaning services, and retail establishments are facing a per employee cost of $2.50 per hour for individual health insurance to $7.50 per hour for family coverage. In reaction to those costs employers are reducing employee working hours from 40 to 28 hours per week worsening the condition of the working poor. Likewise low paying employers with 50 employees are saving their company from paying $20,000 per month for individual coverage and $60,000 for family coverage per month by reducing employees to below the requirement for mandatory insurance. Applebee’s, Papa John’s, Jimmy John’s, Olive Garden and Red Lobster, are among those companies that went public about the cost of health care and intentional lay-offs as a result of the new health care law.