Introduction
The Patient Protection and Affordable Care Act, abbreviated as PPACA, was officially enacted into law on March 22, 2010, following President Barrack Obama’s assent of the respective act into law. The national health scheme, otherwise referred to as the Affordable Care Act (ACA), has remained controversial to many sections of the American society as support and opposition to its content continue to be voiced. One particular provision of the law that has drawn significant controversy is on dependants who are up to 26 years old remaining eligible to the insurance plan of their parents. Among the types of dependants benefiting from the provision include those who reside separately with their parents, those not listed as dependents on the tax return of their parents, as well as those who are non-students, and married individuals. This paper analyzes this provision on dependants and discusses its impacts, efficacy, implementation, and evaluation, while also providing recommendations at the close of discussions.
Description of the Law: History and Contemporary Situation
Prior to President Barrack Obama assenting to the PPACA into law, the USA lagged behind as the only first world country to have entered the 21st century without an existing national health insurance scheme. PPACA eventually became a culmination of a decade-old journey that involved legislative as well as political efforts to avail health insurance treatment for every American. At the onset of the journey, President Theodore Roosevelt in 1912 campaigned on the platform of making national health insurance a reality (Mauersberger, 2012). The American Association of Labor (AAL) in 1906 successfully campaigned for the introduction of a national health insurance program. The progressive group’s efforts during Roosevelt’s reign targeted to reform capitalism at the time, rather than aiming at abolishing it.
In 1912, a committee was formed by the progressive voices whose mandate involved looking at the social welfare of Americans. The committee met for the first time in 1913 to deliberate on the issue in a national conference. In 1915, the committee strictly focused on health insurance, which eventually saw it come up with a model bill. The bill had limited coverage for the working class, as well as other Americans whose annual earnings did not exceed $1,200. This also affected the dependants. An array of services were documented, including “the services offered by nurses, physicians, and hospitals, with other benefits including maternity benefits, sick pay, as well as $50 payment to cater for funeral expenses. Workers, the state, and employers were expected to share the costs involved” (Falk, 1977, p. 162).
There was a shift of focus on the health care scheme in the 1930s, with more attention going into ways of funding the program and increasing access to health care instead of focusing on making worker’s incomes stable. Workers’ medical costs began to elicit serious concerns, relegating to the periphery the concern on wage loss as a result of sickness.
In 1943, the Wagner Bill sought to introduce a national health insurance plan and shift attention from a previous proposal that sought for federal grants-in-aid. This bill was later popularly referred to as the Wagner-Murray-Dingel Bill. Part of the bill’s proposal was the formulation of compulsory national health insurance, together with a payroll tax (Falk, 1977). However, this bill was heavily criticized and opposed, with the Committee for the Nation’s Health being attacked on the basis that I.S. Falk, who was a significant policy analyst, acted as an agent linking up to the ILO and the US government. At the time, the International Labor Organization (ILO) was looked at as a remarkable political machine whose main agenda was to dominate world affairs.
The Wagner-Murray-Dingell Bill, nevertheless, failed to be approved by Congress, although there had been attempts for a record 14 years to reintroduce it. Its failure to see light at the end of the day saw America lose out an opportunity to establish national health insurance whose funding would have been compulsorily derived from payroll taxes.
Harry S. Truman’s ascension to power in 1945 saw his tenure being heavily characterized by unreserved support for a national health care scheme. His support for national health insurance, however, was met by renewed opposition efforts. The coinciding Cold War at the time provided the opposition with impetus as they successfully introduced the aspect of ‘socialized medicine’ to the whole debate, making it lose significant support. Truman had a different perspective on the national healthcare scheme. While previous administrations focused on covering only the employed in society, Truman proposed a healthcare scheme that covered all people in American society. His proposals equally dropped the aspect of funeral benefit, which had seen a similar effort flop during the progressive era under President Theodore Roosevelt.
The combined opposition of American Medical Association (AMA), the American Bar Association, the American Hospital Association, and the mainstream American press offered little room for the proposal’s survival (Gordon, 1997). In particular, the opposition sighted ‘socialism’ in the whole plan as the main reason for their failure to offer support.
There was the introduction of a new proposal by Aime Forand in 1958. The congressional representative pushed for the establishment of a medical cover for the elder Americans based on social security. This new proposal, too, received huge opposition as the AMA campaigned against it, terming any government insurance arrangement as a threatening patient-doctor relationship. However, this proposal survived most of the scathing attacks as it concentrated only on the aged. The grassroots support for this plan, for the first time in the health care history of the American society, pushed it into a national agenda. Nevertheless, this idea was rejected by the American Medical Association that, instead, brought up the “eldercare plan”. This was a plan that was wider in scope compared to Forand’s proposal, but it was supposed to be the voluntary based type of insurance.
There was a need to adjust the proposal that the government had presented to cover physician services. President Lyndon Baines Johnson signed into law the new proposal after private concessions and essential political compromises. This was part of his Great Society Legislation that saw an end to 20 years of congressional debate on the matter (Rothman, 1993).
The main battle for the passage of PPACA pitted Democrats against the Republicans in the latest proposal by President Barrack Obama on a national healthcare plan. In 2012, the opposition took the matter to The Supreme Court seeking to deliberate on its constitutionality. The Court’s ruling asserted that it was the state’s choice, rather than a requirement, to expand Medicaid (Andrews, 2012). The Court equally affirmed the requirement by law that individuals obtain coverage of health insurance. According to Pear and Herszenhorn (2010), the eventual passage of PPACA has been seen as a significant advance in the history of social justice in as far as the establishment of a Medicare and Social Security is concerned.
Initial Hypothesis
The PPACA healthcare program is a good law. The provision that allows dependants below the age of 26 to remain under the insurance plan of their parents fundamentally expands the number of young Americans who will be placed under health insurance. This group was largely at the risk of remaining uninsured because it is often difficult for this category of Americans to attain their own health insurance cover at the maximum age of 19, which is the limit for most healthcare plans beyond which they lose the dependent eligibility. It is a positive move for the government to uphold this law, given that 13 million out of the 47 million uninsured Americans fall within this age group (National Conference of State Legislatures, 2010). This is a significant size of the population, which if ignored, may mean a society suffering from health complications in the future. The USA has to ensure that her population is healthy for it to achieve its growth and development agenda. The extension of cover for dependents up to the 26th birthday, thus, perfectly assures a healthier future America.
Analysis of the Policy’s Efficacy
More young Americans within the 19-29 age brackets who previously were uninsured will benefit from health insurance coverage. In 2011 alone, estimates indicated that about 1.2 million young Americans were poised to enroll for coverage (Caralyn, 2010). This number is set to increase with each passing year as the new law gains its momentum. Quite a significant size of this population would have otherwise lived without a health insurance cover if PPACA was nonexistent. In particular, the expansion of the limit age beyond which an individual loses eligibility for cover as a dependent has played a critical role in increasing the number of Americans to be placed under a healthcare plan.
The new national healthcare program promotes uniformity without considering the age factor. This means that in terms of the insurance coverage provision on dependants, coverage may not be varied as a basis of a child’s age. The only exception, in this case, is where an individual is already over 26 years old — as of now, providing insurance to persons who are not more than 26 years old is not supposed to come with surcharges. The surcharges, however, can only apply to all children without considering their ages up to the maximum limit of 26. In the same breath, no variations of benefits are allowed for the dependants for as long as they are below 26 years of age.
PPACA took into consideration the “grandfathered health plans”, which involve all the plan years not exceeding January 1, 2014. This group of health schemes does not include adults who qualify to be covered under the employer-sponsored insurance cover. This does not include a parent’s group insurance cover. This category of health schemes is mandated to abide by the general requirements as from January 1, 2014.
However, there is a major setback on the age limit provision of 26 for the dependants. While employment-based coverage is on the increase, the likely scenario could be the fact that individuals are losing coverage by virtue of their work. This is suspected to be triggering the increased movement from employment-based coverage under the employee’s own name. Instead, individuals, especially those between 19 and 25 years of age are adopting employment-based coverage as dependants (Fronstin, 2012).
Equally, as a society, it is important for structures that enhance responsibility, particularly among young adults, to be implemented. Expanding dependants’ eligibility to cover individuals up to the age of 26 only succeeds in limiting responsiveness among young adults. There is a greater likelihood that a majority of the young adults will deliberately fail to work hard to attain health insurance coverage on their own.
The cost implications of PPACA as a result of the expansion of the age limit for dependants to 26 is enormous for the American economy. More funds are required to fund this program, given that the number of dependants who are not contributing to the scheme has increased (Gruber & Rundell, 2012). The tax bracket has to be expanded to enable the government to run the national health insurance program effectively. However, this is coming at a time when the American economy is not yet fully recovered from the aftermath of the global credit crisis that began in 2007. Most American taxpayers, thus, are left with limited disposable income to cater for their needs. In essence, these developments threaten to slow the economy’s rate of growth, where other important developmental aspects such as infrastructure may not receive adequate funding.
Implementation
The PPACA provisions on healthcare coverage to all dependents up to the age limit of 26 has resulted in substantial compliance challenges, particularly for the employers. There has been a substantial increase in group health plans enrolment because of this requirement. According to Smith, Gambrell, and Russell (2011), estimates for 2011 indicated up to 1.2 million adults intended to sign up for the program. This, in turn, points at the challenge that the employers face because of the newly expanded coverage. Industry groups now point at an increase of the average premium amounts that families are required to pay, to the tune of 3.4 percent.
With PPACA’s enactment into law in 2010, immediate provisions to be implemented include prohibiting lifetime benefit limits, as well as a host of other unreasonable annual limits. The extension of cover to include dependants who are below 26 years is mandatory. Employers and insurance providers are required to eliminate any pre-existing conditions that excluded children. Equally, employers and service providers are required to eliminate any waiting periods that existed earlier, and which exceeded the 90 days mark.
However, the implementation of PPACA has been made easier by the inclusion of grandfathered plans. PPACA’s implementation requires that other existing plans that offer dependent coverage must extend such coverage for individuals who are listed as dependants, who are below the age of 26. Grandfathered plans, thus, enjoy a leeway of excluding dependants who are adults, but who remain eligible for either their own employer-sponsored coverage or that of their spouse.
Evaluation
PPACA’s new provisions, which offer an expanded healthcare cover to dependants below the maximum age of 26, offer new options for consumers. This provision specifically protects consumers who already have private healthcare insurance plan. The new provision will also offer assistance to the government in its attempt to have more Americans placed under health insurance cover. A significant number of unemployed young adults, most of who have just cleared school and are not yet employed, will have the opportunity to benefit from a national health insurance plan. This, in turn, assures the country of a healthy population both presently and in the future. This is a perfect remedy for development.
The cost implications of PPACA have the potential of slowing economic growth in the USA. More beneficiaries who do not make a direct contribution to the scheme have been included in the program (Gruber & Rundell, 2012). This implies that the American taxpayer will have to increase individual contributions in order to cater for the increased number of beneficiaries. The additional contribution amount reduces the disposable income of most American families, which may end up affecting national development and economic growth. Negative economic growth may eventually erode the benefits intended by PPACA as few Americans will have the ability to afford health insurance coverage.
PPACA could lead to an overstretched medical infrastructure. The government has succeeded in providing an incentive to a huge number of Americans to gain health insurance coverage through the enactment of the law. However, there are no similar efforts to ensure that the health infrastructure is equally expanded.
Recommendation
PPACA’s successful implementation requires the establishment of Accountable Care Organizations. This will see a reduction in the failure of the episode-of-care payment-building to recognize chronic ailment nature. Eligibility for sharing savings payment will be achieved by establishing the Accountable Care Organization.
The government should focus more attention aimed at reducing inefficiencies and disparities that remain in PPACA. Construction of care delivery must be done in such a way that it not only treats acute events among the new patients. There is a need for the government to spearhead efforts aimed at addressing primary and secondary avoidance or prevention. This can be done through rewarding critical care management elements. It is important for policies and regulations to be formulated, which will specifically promote healthy competition as well as transparency.
Structural and fundamental reforms should be introduced in the healthcare sector to protect the country from facing cost implications of the new Act. There is a need for the government to review the fee-for-service reimbursement structure in order to enable providers to remain interested in value and not volume as is the case (Gruber & Rundell, 2012).
Conclusion
The USA has had a long history of efforts aimed at establishing a national healthcare plan. From the era of President Theodore Roosevelt, there have been consistent efforts by lawmakers and other stakeholders to ensure that the country establishes a formidable national health insurance program. However, these efforts have been met with opposition from political groups and players in the health sector. In 2010, President Barrack Obama led a spirited campaign that culminated in the eventual formation of the Patient Protection and Affordable Care Act (PPACA). Although the proposal received and continues to face stiffer resistance particularly from the Republican representatives, it was the first time the US government succeeded in setting up an elaborate national healthcare program. Parts of PPACA’s proposals require that healthcare insurance cover for parents be extended to their dependants below the age of 26. This requirement has increased the number of young Americans under healthcare insurance cover, as opposed to the past where quite a significant number of young adults between 19 and 29 years remained without health cover. PPACA ensures a healthier society, not only at the present but it also guarantees a healthier future.
References
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