With the 2012 presidential election just weeks away, it’s important to scrutinize each candidate’s vision for healthcare policy, because policy changes have the potential to dramatically affect not only the nation, but also patient care and the financial viability of orthopaedic practices. This article outlines the specific viewpoints of President Barack Obama and Republican presidential nominee Mitt Romney with respect to health care.
President Obama and PPACA
On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act (PPACA), which increases the availability of healthcare coverage for Americans. Together with the Health Care and Education Reconciliation Act, PPACA represents the most significant regulatory overhaul of the U.S. healthcare system since the passage of Medicare and Medicaid in 1965.
For example, PPACA expands Medicaid eligibility, subsidizes insurance premiums for individuals making up to 400 percent of the federal poverty level (FPL), offers incentives for businesses to provide healthcare benefits, prohibits insurance companies from denying coverage based on preexisting conditions, establishes health insurance exchanges, eliminates annual and lifetime coverage caps, and supports medical research.
It introduces health insurance exchanges, marketplaces where individuals and small businesses can compare policies and premiums and purchase insurance. Exchanges will select qualified health plans, facilitate consumer efforts in shopping and enrolling for coverage, and coordinate eligibility for the exchange and potential premium assistance. Low-income individuals and families with incomes ranging from 100 percent to 400 percent of the FPL will receive federal subsidies on a sliding scale if they purchase insurance via an exchange. PPACA also enables the establishment of minimum standards for health insurance policies and a restructuring of Medicare payments to providers from fee-for-service to bundled payments.
Although some aspects of PPACA are already in effect, others won’t have an impact for years. For example, PPACA requires insurance companies to publicly justify rate increases of 10 percent or more and to spend at least 80 percent of premium dollars on health care or improvements to care rather than on marketing or administrative costs. As a result, this year, an estimated 13 million Americans will receive a rebate from their insurance company.
PPACA provides tax credits for small businesses to help pay for their employees’ health insurance. To date, 360,000 businesses—employing 2 million workers—have already benefited from the small business tax credits in the law. In 2014, small business owners will get more relief with tax credits and affordable choices through the new insurance exchanges. Businesses will be able to compare health plan options, and insurers will have to actively compete for their business.
Insurers are also prohibited from imposing lifetime limits and from dropping a patient’s coverage due to a mistake on the application form. They are required to cover specific recommended preventive services, such as cancer, diabetes, and blood pressure screenings, without additional cost sharing such as copayments or deductibles. As a result, roughly 86 million Americans have received these preventive services. In 2011, more than 32 million seniors received one or more free preventive services, including the new annual wellness visit.
As many as 6.6 million young adults have been able to stay on their parents’ plans until the age of 26, including 3.1 million young people who are now insured. The law has helped more than 5 million seniors and people with disabilities save an average of more than $600 on prescription drugs in the “donut hole” in Medicare coverage. In addition, more than 50,000 Americans with preexisting conditions have gained coverage through the new Pre-Existing Condition Insurance Plan.
PPACA’s provisions will be funded by a broadened Medicare tax on high-income families, an annual fee on insurance providers, and a 40 percent excise tax on “Cadillac” insurance policies. Taxes on pharmaceuticals and high-cost diagnostic equipment, as well as a 10 percent federal sales tax on indoor tanning services, are also included.
The passage and implementation of PPACA, however, have not been without turmoil and challenge. Twenty-six states, two individuals, and the National Federation of Independent Business challenged its constitutionality; 136 amicus briefs were filed. Before the U.S. Supreme Court heard oral arguments in March, challenges to the law had been heard at the circuit, district, and appellate court levels. On June 28, 2012, the U.S. Supreme Court upheld the constitutionality of PPACA with a 5-4 vote, deeming the individual mandate a tax. The Court, however, ruled that the federal government could not withhold all Medicaid funds from states that refused to follow federal guidelines for Medicaid expansion.
Mr. Romney opposes a federal government run, single-payer system and vows to repeal PPACA if elected. Although he supports universal health care, he wants to delegate its implementation to the state level. He envisions states as the regulators of local insurance markets and the implementers of individualized healthcare reform.
Mr. Romney proposes to divert money from Medicaid and other federal funding sources into block grants so that states may individually expand access to low-income residents. He contends that he would limit federal standards and requirements on both private insurance and Medicaid coverage and ensure public-private partnerships, exchanges, and subsidies. To decrease costs, he would raise the minimum age for Medicare eligibility.
Mr. Romney would also reform the tax code to promote individual ownership of health insurance, providing individuals with a tax deduction to buy insurance. Although he advocated for financial penalties on individuals without insurance as governor of Massachusetts, Mr. Romney opposes such penalties on a federal level. He supports the use of health savings accounts (HSAs) and pledges to eliminate the minimum HSA deductible requirement. He would allow consumers to purchase insurance across state lines, permit HSA funds to be used for insurance premiums, encourage co-insurance products, promote alternatives to fee-for-service reimbursement, and encourage Consumer Reports-type ratings of alternative insurance plans.
Mr. Romney opposes efforts to provide nonemergency health coverage for illegal immigrants and supports the Hyde Amendment to ban government funding for elective abortion. In addition, he supports coverage of preexisting medical conditions, the implementation of a streamlined electronic medical record system, an emphasis on preventive care, and loosening restrictions on importation of prescription drugs.
Mr. Romney considers the federal government’s role as promoting free markets and fair competition. He would like to cap noneconomic damages in medical liability lawsuits and would offer innovation grants to explore nonlitigation alternatives to dispute resolution. He seeks to facilitate information technology interoperability and would encourage individuals and small businesses to form purchasing pools.
Mr. Romney has contended that some of the best features of PPACA, including the “individual responsibility for getting insurance,” are similar to those in a Massachusetts healthcare reform law that was passed while he was governor. The law was the first of its kind in the nation and, within 4 years, had achieved its primary goal of extending coverage. According to the Massachusetts Department of Healthcare Finance and Policy, in 2010, 98.1 percent of state residents had coverage, compared to a national average of 83.3 percent. The 2010 coverage rate was even higher among children and seniors, at 99.8 percent and 99.6 percent, respectively.
Use of major inpatient procedures increased more among nonelderly lower- and medium-income populations, Hispanics, and whites, suggesting potential improvements in access to patient care for these vulnerable populations. On the negative side, insurance premium levels have risen as a result of this universal healthcare plan and higher hospital costs.
Julie Balch Samora, MD, PhD, MPH, is an AAOS Washington Health Policy Fellow and fourth-year resident at The Ohio State University Department of Orthopaedics. She can be reached at email@example.com
Carolyn M. Hettrich, MD, MPH, is assistant professor at the University of Iowa Sports Medicine Center. She can be reached at firstname.lastname@example.org
Editor’s Note: Policy Timeout is a new series on advocacy issues written by AAOS Washington Health Policy Fellows.
Comparing the positions of the two candidates (PDF)
- Hanchate AD, Lasser KE, Kapoor A, Rosen J, McCormick D, D’Amore MM, Kressin NR. Massachusetts reform and disparities in inpatient care utilization. Med Care 2012; 50(7):569-577.