HEALTH CARE POLICY

Health insurance You pay a premium into an insurance pool. In the event that you are sick or injured, the insurance policy pays all or part of your medical expenses.

Government health insurance programs Medicare and Medicaid established 1965 Medicare: $709 Billion est. federal spending in 2017 Established 1965 Funded by the Social Security payroll tax and general revenues Recipients are those over 65 or with disabilities 55 Million people covered in 2015 Various components cover doctor visits, hospitalization, prescription medications (medicare.gov; kff.org) Medicaid: $389 Billion est. federal spending in 2017 Matched by $163 Billion in state spending 74 Million people covered in Jan. 2017 Families and some eligible individuals whose income is below a certain percentage of the federal poverty level (now 133% as a result of the Affordable Care Act) (Congressional Budget Office; kff.org)

Government health insurance programs SCHIP: State Children’s Health Insurance Program Expansion of Medicaid, established 1997 $7.4 Billion in federal funds, $3.2B state (2009) Provides insurance coverage for children whose families make less than 200% of federal poverty level but do not qualify for traditional Medicaid 5.7 million children enrolled in FY 2013 (kff.org)

The Uninsured Most healthy, working Americans receive insurance coverage for themselves and their families as a job benefit (they and their employer each contribute to the premium). Approximately 41 million Americans had no health insurance. This has declined since the Affordable Care Act began to be implemented.

The Uninsured These are primarily healthy workers (and their family members) who don’t get insurance as a job benefit and can’t afford to buy it on their own. Another category is people with pre-existing conditions: If you have a certain medical history, insurance companies will refuse to cover you because of the probability that you will get sick again.

Why Other People’s Lack of Insurance Affects You The uninsured drive up the cost of health care for everyone else. Health care providers are required to provide life-saving treatment and some other types of care even to those who cannot pay for it. The cost of this treatment is then passed on to those who do have insurance or who can afford to pay for their care, in the form of higher insurance premiums or higher out-of-pocket expenses.

Patient Protection and Affordable Care Act of 2010 Enacted March 23, 2010 Expansion of requirements for coverage of preventive care by insurers (lowers long-term costs) People under 26 may remain on their parents’ insurance policies (younger people who are just entering the workforce are least likely to get insurance as a job benefit) Removal of lifetime dollar limits on policy coverage for key conditions

Patient Protection and Affordable Care Act of 2010 No exclusion of coverage of pre-existing conditions for people under 19 People with pre-existing conditions who can’t get coverage elsewhere can buy into a special program States may set up their own programs for this or use a federal program; SC has chosen to use the federal program, while NC has set up its own program Approximately 20 million previously-uninsured people now have coverage as a result of the ACA.

Individual Mandates Under the Affordable Care Act, beginning in 2014, individuals must buy insurance or pay a tax penalty, which is the higher of: $95 or 1% of your income in 2014 $325 or 2% of your income in 2015 $695 or 2.5% of your income in 2016 Tax credits are offered for people to buy their own insurance through state or federal insurance exchanges.

Mandates for Business The ACA does not actually require businesses to insure their employees, BUT: Beginning in 2014, businesses with more than 50 employees must provide them with insurance coverage or pay an “assessment” if their employees receive tax credits for individual insurance premiums. This “assessment” is $2000 per employee beyond the first 30 employees. The Department of Health and Human Services estimates than less than 2% of US businesses will be affected by this requirement. Certain small businesses (with under 50 employees) are offered tax credits to insure their employees.

Can the Government Require You to Buy Health Insurance? National Federation of Independent Business v. Sebelius (2012): The Supreme Court ruled, 5-4, that Congress has no power under the Interstate Commerce Clause to require people to buy health insurance, BUT Congress DOES have the power to impose a tax penalty on those who don’t buy insurance.

Consequences Many businesses claim that they cannot afford the extra costs or taxes associated with these requirements, and will lay off workers as a result. Some economists dispute the claim that businesses cannot afford to insure their workers. Increases in the cost of doing business (such as having to pay for employees’ insurance) drives up the cost of doing business and leads to increases in the cost of consumer products and services.

Consequences $716 Billion in cuts to Medicare over the next ten years, which the Administration claims will not affect current recipients’ benefits (and this is only 10% of projected cuts to Medicare during this time). These cuts will be in the form of cuts in payments to Medicare providers and program cost containments. Some health care providers claim that they will stop accepting Medicare patients rather than accept cuts in their reimbursement.

Primary Unintended Consequences of the ACA Premium increases Most people’s federal subsidies are inadequate to guarantee that they can afford coverage People being dropped from their policy shortly before the ACA went into effect Early 2017 attempt to repeal the ACA was withdrawn in the House of Representatives due to a lack of support.

Alternatives National Health Insurance (Great Britain): “Socialized medicine” – the government owns the health care system and provides all care. Single-payer insurance (Canada and other industrialized countries) – there is no private insurance; the government provides universal insurance to everyone. Disadvantages: Extremely high taxes and limited access to services. Either you pay for care in the form of insurance payments, or in the form of taxes. The debate is over how the burden should be shared.