The Pendulum Swing of Healthcare in America

June 29, 2017

Healthcare continues to face a long and arduous road in America. It has been a national issue since the early days of the twentieth century and continues to drive the direction of our national politics today. Many Presidents and Congressional leaders have tried to tackle healthcare in various forms and have tried to address how the American healthcare system should be shaped: whether we would be a nation of universal coverage system, a single-payer, multi-payer, or employment-based insurance, or have mandatory coverage.

As currently designed, the US healthcare system has been based on a combination of employment-based insurance where a majority of Americans receive health insurance through their employer: over 55% of Americans received insurance from their employer in 2015. In conjunction with employment-based insurance, US healthcare has a private market for individuals to purchase healthcare. In 2015, 16% of Americans purchased health insurance through the private market.

In the 1960s, the Federal government introduced a national single-payer program for certain sub-groups of Americans due to citizens’ dire need, so the Social Security Amendments of 1965 created Medicare and Medicaid. Medicare provides health insurance for Americans over the age of 65 through a payroll tax. It also provides health coverage to certain people with disabilities. It covered over 16% of Americans in 2015. Medicaid was established to assist low-income adults, children, and people with certain disabilities. The Medicaid program covered over 19% of Americans in 2015.

The largest change to the American healthcare system since Medicaid and Medicare came about vis-à-vis the Patient Protection and Affordable Care Act (“ACA” or colloquially “Obamacare”) in 2010. The ACA had several effects on the healthcare industry: it established a regulated market place and expanded employment-based insurance. ACA regulations set mandatory guidelines of coverage and put in place rate limits with regards to sex, age, and pre-existing conditions. In addition, it set limits on administrative costs. The ACA also provides cost-sharing subsidies for Americans who do not qualify for Medicaid and cannot afford health insurance on the private market.

For the most part, the ACA left Medicare and Medicaid intact but it expanded Medicaid eligibility to include more low-income Americans and changed funding to Medicare. But by and far, the biggest effect on the status-quo health care system was the individual mandate where the Affordable Care Act required every American to obtain health insurance or face a tax penalty.

The ACA has been very contentious politically. While most Democrats support the ACA, most in the Republican Party (“GOP”) have argued for its repeal. The 2016 US National Elections gave the GOP control of Congress and the White House. Now they have an opportunity to roll-back, change, modify, or repeal the ACA, or enact something completely different.

Staying true to campaign promises, Republicans in the GOP-controlled House introduced the American Health Care Act of 2017 (“AHCA”) in March of this year. The AHCA rolls-back the ACA by getting rid of its regulatory framework for health coverage and its insurance mandate by eliminating the tax penalty. It also replaces subsidies with tax credits. Besides un-doing ACA regulations, the ACHA fundamentally restructures Medicaid. It changes Medicaid into a block grant allowing States more flexibility and reducing Federal funding to the program. The AHCA passed the House vote.

Subsequently, the GOP-controlled Senate unveiled the Better Care Reconciliation Act of 2017 last week. The Senate bill is similar to the House ACHA but maintains the ACA subsidies and makes deeper cuts to Medicaid funding. It also drastically modifies Medicaid, in what would be the biggest change to the program since its inception. If, and when, the Senate votes on their proposed Act, it could spell the end of the Affordable Care Act.

Whether the ACA gets repealed and the ACHA passes Congress, both these legislations indicate how difficult and complex it is to change America’s healthcare system. There are many arguments, many interests, and factors involved. It is something that affects all Americans regardless of age, race, religion or socio-economic status. But regardless of the outcome, one thing is for certain, the debate on healthcare will continue long into the endless-twilight of future political frontiers.

Image Source: Jonathan Bachman/Reuters

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