Introduction
The Patient Protection and Affordable Care Act is a significant step forward that caters for improving the health care in the United States. President Obama signed the Act into law in March 2010. The Act is now consistent with the advocacy principles that are adopted in the AAFP Congress of Delegates as from October 2009.
However, the implementation of the Act came amidst reactions from various states. Organizations together with other lawmakers came up with some opposing forces on the bill. The main idea behind their opposing forces was because of the key provisions in the bill. Some of the provisions within the bill claimed that individual fines from failing to purchase the insurance does not work within the scope of taxing powers of the Congress. Among the states that reacted over the act is Iowa, which used its legislators to sue the progress (DPC 3).
The Patient Protection and Affordable Care Act (PPACA) also known as the Obamacare plan, has various provisions contained therein to cater for the health needs of the citizens. There is inclusion of a parent clause that deals with prior policies on health and makes the Act to be exempted from the policies (Pipes 5).
The first provision is the guaranteed issue clause. This requires the health policies to be issued to the citizens without any discrimination regarding their medical condition. Pipes (161) further indicates that the law also requires insurers to exercise partial community rating whereby same premiums must be issued to applicants within the same geographical location or age (8).
Gender should not be considered a discriminating factor or prior existing conditions with the exception of tobacco use. This paper will examine the reaction of some states notably Iowa and Virginia. It will also evaluate the differences in their reactions and implementation of the Act.
Objectives
The study seeks to establish the economic impacts of the Patient Protection and Affordable Care Act on the public and the various states. Specifically this study will seek to:
- Investigate the impacts of the act on the public
- To investigate the impacts of the act on the various states
- To find out reasons why the states of Iowa and Virginia rejected the act
The Patient Protection and Affordable Care Act
The Act states that all citizens who are not insured by their employer, Medicaid, Medicare or any other public insurance program, must ensure that they are under a private insurance policy failure to which they will pay a penalty (DPC 5). This is however not applicable to members of religious sects recognized by the Internal Revenue Service or have been ignored due to financial hardships.
The third provision requires health insurance exchanges to operate in every state in the country and ensure that citizens can choose from various policies and premiums. This means that there should be a variety of premiums available in the market. The Act also caters for low income earners. It provides for federal subsidies to be granted on a sliding scale to families between 100% and 400% of the federal poverty level (DPC 7). This is however subject to them purchasing an insurance premium through an exchange.
The Supreme Court however left a loophole in the legislation when it allowed some states to exclude themselves out of the Medicaid expansion (Pipes 18). These states are however required to set up their own parameters on the eligibility of the members. Most of the states under this category fall under the 133% threshold. Another provision requires states and insurers to set the policies’ standards and bans policies that cover the lifetime of a policyholder.
A range of taxes and offsets (DPC 8) funds the provisions under the Act. Most of the revenue is derived from expanded Medicare tax especially on incomes in excess of $200,000 and $250,000.
Other sources according to Gibson and Pranad (154) include a 40% excise tax on insurance policies, tax on pharmaceuticals, expensive diagnostic equipment, a 10% tax charged on the sales tax of indoor tanning services and a percentage from the annual fee charged on insurance providers. Offsets on the other hand are derived from expected savings from the costs related to Medicare Advantage programs.
Under this Act, the federal government was going to pay full costs for three years and then shift the costs gradually to the state (DPC 8). The cost was to be shifted in 10% installments over time. However, a few concerns were raised regarding the long-term viability of the model.
From an outsider’s point of view, this could be the best thing to ever happen to a country. The uproar created by the Republicans and citizens left many wondering what was wrong with this law. Due to the ruling in National Federation of Independent Business v. Sebelius, many states reacted differently to the Act.
The ruling contradicted many aspects that had been made clear to the people by the president and other relevant authorities with knowledge. This is despite the fact that the Act provides some incredible guidelines to achieve high-quality provision of healthcare in the country.
Reactions by the Iowa state
Iowa is one of the many states that reacted on the approval of the Act by the president. The state used the governor in signing a lawsuit against the federal health care. According to the governor, the lawsuit will challenge personal mandate of the healthcare bill, which forces Iowans to purchase health insurance from the federal government, which is mandatory.
Additionally, the law gives option for the expansion of Medicaid, which is quite costly making the residents of the state to cut on their other programs. The impact of the health care bill will completely disorganize the state budget thereby freezing significant activities. Considering that the governor is trying to process a five-year budget, inclusion of the law in the budget will affect the Iowa taxpayers.
Iowa people view the law as an impediment on their success in development. An additional expense on their income will alter their daily chores expenses thereby affecting the general development of the state. From the taxpayers’ perspective, they risk paying more taxes, which can be a substitute for other important activities (Danielson par 3).
On the contrary, some have positive hopes on the implementation of the law. From their perspective, the law will help the Iowa state to fulfill its goals of protection and promotion of health and welfare of the public. Considering that health care is a crucial factor in most regions, implementation of the law would help in solving health issues that concerns the society at an affordable rate.
Reactions by the Virginia State
Another state to react on the health care law signed by the president is Virginia. According to the people of the state, the healthcare reform requires people to purchase health insurance, which presents unconstitutionality in the nation. Another reason that the state reacted upon the law was the individual mandate of purchasing the law together with the direct dependent provisions that the law provides to the citizens (Kousser and Justin 42).
According to the sector of individual mandate, the law requires all the citizens to purchase the insurance by 2014 or face a penalty for not buying. From the legal point of view, the final language of the law misleadingly mentions the penalty tax, prior its name being a penalty in the draft language before passing the final bill.
The factor of penalty and tax is a paradox considering that the constitution requires the federal government to impose taxes with a penalty imposed to those who violate the constitution. In a law-abiding country, individuals should be given a chance constitutionally to accept some of the laws implemented by the government (Pecquet par 6).
Factors that led to the Different Reactions by the Two States
Even though a myriad of explanations were given as to why the law should be rejected, it is evident that the rejections were significantly fuelled by politics. This is due to the belief that a change of guard i.e. from a Democrat to a Republican, would likely amplify the probability that this law would have less strict federal requirements (Pipes 12).
It is therefore not by coincidence that most of the states that opposed the enactment of this law are made up of majority Republicans and conservatives. However, the reactions from Iowa were more explosive when compared to the reactions from Virginia (Steinglass 216). The Iowa Republicans were very vocal on the issue and were adamant to accept the law until the time their concerns were addressed.
Being at the helm of the specific states, the implementation of this law depended hugely on these people’s influence on the budget of the states and other forms of lobbying within the health sector. This is what some of the politicians from the two states had to say:
In Iowa, most of the Republicans were against the law. Being the majority, they were the ones who were charged with the responsibility of implementing the Act and much depended on their stand on the issue. For instance, Congressman Steve King stated that the Supreme Court’s ruling in favor of the Act was not in line with what lower courts had decided regarding the matter.
According to King, the lower courts had agreed that the individual mandate could not be treated as a form of tax and therefore could not be implemented by the Congress’ powers on taxation.
He also emphasized that the Supreme Court ruling was in contradiction with President Obama’s views since he had earlier stated on national television during a debate that the individual mandate was not a tax (DPC 8). That was the case before the law was passed into a bill. Subsequently, the government defended the mandate under Congress’ “taxing and spending power” (DPC 9).
Methodology
The purpose of this chapter is to present the details of the approach to the research. The approach should be illustrated to increase the validity of the research. The approach to the research was done considering a research onion. Therefore, the methodology chapter will be considered by a discussion of the philosophy of the research, the approach, strategy of the research, data collection, and the focus group.
Research Onion
The diagram below displays the research process, which resembles an onion.
A research onion was used to provide a description of the methodology of the research. The research onion presents a clear framework of the methodology employed. As shown in the diagram above, it has layers representing every item consulted. Through each layer, the research questions will be answered. Using the outer layer, there are various philosophies considered as shown bellow.
Works Cited
Danielson, Dar. Iowa governor signs onto Florida lawsuit against federal health care. 2011. 18 March 2013. <https://www.radioiowa.com/2011/01/18/iowa-governor-signs-onto-florida-lawsuit-against-federal-health-care/>.
DPC. The Patient Protection and Affordable Care Act. 2010. 18 March 2013. <https://www.dpc.senate.gov/healthreformbill/healthbill04.pdf>.
Gibson, Rosemary and Prasad, Janardan. The Battle over Health Care: What Obama’s Reform Means for America’s Future. Plymouth : Rowman & Littlefield Publishers, 2012. Print.
Kousser, Thad and Justin, Phillips. The Power of American Governors. 2013. 18 March 2013. <http://www.columbia.edu/~jhp2121/publications/ThePowerOfAmericanGovernors.pdf>
Pecquet, Julian. Federal judge rules against new healthcare law in Virginia lawsuit. 2010. 18 March 2013. <https://thehill.com/policy/healthcare/133357-virginia-ruling-expected-to-set-stage-for-supreme-court-battle>.
Pipes, Sally. The Truth about Obamacare. Washington: Regnery Publishing Inc, 2010. Print.
Steinglass, Steven, and Gino, Scarselli. The Ohio State Constitution: A Reference Guide. Westport, Conn: Praeger, 2004. Print.