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Healthcare Reform and the Effects on Premium and Care

By: Sara Colvin | Updated on 4/8/2022

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Recent changes to healthcare law, including partial repeals of the Affordable Care Act (ACA or “Obamacare”), have left much room for speculation about the direction healthcare will head in the next several years. Hospitals, patients and health plans all have very real concerns regarding cost, access to coverage and quality of care. With every new law, a new shift in expectation occurs, leaving experts jockeying for data to present to the public with reassurance that United States healthcare is not only fixable, but heading in a stable direction.

How are the proposed changes to the current healthcare law affecting patient care and costs?

One common topic is the shift in the cost of healthcare premiums, and how much it will cost the average American to stay well. Medicaid expansion, individual mandates (or the repeal thereof) and group purchasing options all serve to combat the rising cost to the individual. But how have the most recent changes in healthcare law affected premiums, and what sacrifices in coverage are made to accommodate a lower premium?

In 2017, Congress passed the American Health Care Act (AHCA, or “Trumpcare”) which served as a partial repeal of President Obama’s ACA. One major component of the ACA was a mandate that all individuals must carry health insurance or face financial penalties. This served to add nearly 20 million insured Americans, assisting in subsidizing the cost of healthcare for the very sick or elderly, and led to an increase in access to care. The AHCA issued a partial repeal of this mandate to go into effect by 2019, allowing individuals to opt-out of the mandatory coverage. The healthiest people will, of course, be the first to drop coverage, driving up the cost of premiums for the sick and elderly. 

Another way the ACA was assisting in providing access to care was to allow small businesses to band together to purchase health plans for their employees; an item that may have been cost prohibitive for a small business alone. These Associated Health Plans (AHP) must meet the same standards that the ACA applied to the individual market (i.e., cannot reject prior conditions, maternity care, prescription drugs or mental illness). In the fall of 2017, President Trump issued an executive order removing the required standards of coverage for AHPs. The narrative is that more businesses can afford to purchase insurance for their employees. However, these plans are much less comprehensive and may not offer adequate coverage for the average American.

The ACA was meant to help subsidize the cost of care to sicker and elderly individuals, ensuring that coverage was affordable, and patients had access to care. The recent partial repeals remove these accommodations, bringing us right back to sicker people paying more for healthcare. Furthermore, the consequence of lower premiums is less comprehensive coverage for all.

Many hospital executives and health organizations have expressed concerns about the ACHA. “Uncompensated care for hospitals will increase because you’ll have more people not being able to pay, so that puts financial pressure on the hospitals,” said Danny Chun, a spokesman for the Illinois Health and Hospital Association.

With four million fewer insured patients by 2019 and 13 million fewer by 2027 (according to The Congressional Budget Office), hospitals are predicted to suffer the burden of uninsured care.  How will hospitals adapt to the pressure to provide quality care without the promise of compensation? What factors not represented here may offset this issue? And how will Washington respond to the outcomes of its decisions?