Comparative Policy Report

Caitlin Chan Comparative Policy Report

Healthcare is essential to ensuring all individuals are covered in all cases that require medical services so they can focus on recovering rather than the cost. By providing access to healthcare individuals can continue to pick up where life was paused and push forward. From Healthline, currently there are roughly 27.5 million people who do not currently have healthcare insurance in the United States. 45% of uninsured adults said the high cost of coverage was the reason they remained uninsured. Two options available are ACA (Market) and Medicare for All (State), the key differences and important details to remember will be stated in this report. The format will be as follows: starting from the history of each policy then a comparison of both policies' overall economic impact, cost/benefits, and social distribution/equity considerations. Lastly there will be a conclusion to determine which policy is better in justifying its ability to help provide adequate healthcare services to more individuals regardless of price.

The Affordable Care Act (ACA) otherwise known as Obamacare was first enacted in 2010 under President Obama’s administration. The main goal was to introduce a health insurance marketplace, expand Medicaid eligibility, and implement consumer protections. As mentioned in the introduction, the ACA aims to provide the most uninsured people in the U.S. access to health insurance as long as they are U.S. citizens who live in the country, are not incarcerated, and are not covered by Medicare.

The demographics that are covered by this policy includes: low income individuals, young adults, minorities, and people with pre-existing preconditions.

Medicare or Medicare for All was enacted by President Truman in 1945. His goal: every wage earning American would receive comprehensive insurance. The American

Medical Association opposed the plan calling it “socialized medicine.” The AMA tried to counter Medicare with its own plan mainly aimed to expand private insurance and federal aid to fund care for the poor. Truman was not able to move the plan forward, however he paved the way for President Lyndon Johnson who won approval in 1965 for Medicare and Medicaid. The demographics that are covered by this policy includes: People age 65 or older and people who may be able to buy. People with a disability, End-Stage Renal Disease or ALS may be able to get Medicare earlier. Medicare has four parts: Part A Hospital Insurance, Part B Medicare Insurance, Part C Medicare Advantage Plans, and Part D Drug Coverage.

The ACA significantly reduced the uninsured rate in the U.S. According to the U.S. Census Bureau, the uninsured rate dropped from 16% in 2010 to 8.8% in 2016.

Within the roughly 8% change, millions of previously uninsured individuals were able to gain access to healthcare coverage. The Marketplace serves as an important source of coverage for 2.6 million small business owners and self-employed adults, based on analysis of 2021 tax data, which was the first year for which the American Rescue Plan’s enhanced Marketplace premium tax credits were in effect. Small business owners and self-employed people make up 25 percent of Marketplace enrollment among working-age adults. The uninsured rate for the self-employed fell dramatically since the implementation of the ACA starting in 2014. In 2019, the uninsured rate for self-employed adults ages 21-64 was nearly 10% lower than the rates seen before the implementation of the ACA (30.0 percent in 2013 vs. 20.5 percent in 2019), corresponding to approximately 1.3 million less uninsured self-employed adults. The Congressional Budget Office (CBO) estimates that over the entirety of 2014, 5 million

people will benefit from premium tax credits and help with cost sharing averaging $4,700 per person. In 2015, 11 million people are estimated to benefit, rising to 19 million in 2016. From 2010 to 2012 real per-capita health spending grew at an average rate of 1.1 percent, and evidence implied the slow growth continued in 2013. The CBO has estimated that over fiscal years 2013 through 2022, the ACA will reduce the deficit by $109 billion. CBO estimates that over the decade from 2023 through 2032, the ACA will reduce the deficit by an average of 0.5 percent of GDP each year, corresponding to total deficit reduction of nearly $1.6 trillion over that ten year period. For Americans who had coverage before the ACA, the ACA guarantees access to preventive services recommended by the U.S. Preventive Services Task Force without cost-sharing, services that have been proven to improve health and save lives. Since 2010, more than 71 million Americans have received at least one preventive service without cost-sharing. Hospitals have responded to these programs, and Medicare 30-day hospital readmissions rates have declined exponentially, and are now more than a percentage point below their average level from 2007 to 2011. Through August 2013, this decline corresponded to 130,000 avoided hospital readmissions. Since the enactment of the ACA, these provisions saved 7.3 million Medicare beneficiaries an average of about $1,200 per person on prescription drugs.

In 2017, Medicare covered over 58 million people.Total expenditures in 2017 were $705.9 billion. This money comes from the Medicare Trust Funds, Hospital Insurance (HI) Trust Fund and Supplementary Medical Insurance (SMI) Trust Fund.

The CBO projects that variants 1–4 of single-payer reform would reduce national health expenditures (NHE) despite substantial increases in the use of care triggered by

expanded and upgraded coverage. As exhibit 3 demonstrates, payments to clinicians would rise in all five scenarios according to CBO estimates. We estimate this translates into an additional $39,816–$157,412 in revenue per practicing physician. For hospitals, the CBO estimates that gross revenue would fall by $187 billion under the “low pay” scenario but rise by $144 billion under the high-payment scenario. The CBO’s estimates suggest that hospitals would save $143 billion to $166 billion on administration and an additional $59 billion on freed-up nursing time, resources that could be redirected to clinical care (exhibit 4). Overall, building on the CBO’s projections, we estimate that hospitals’ clinical funding would change little (rising by $15 billion) under the low-payment scenario or increase substantially, by $369 billion, under the higher-payment one. Yet, there are also substantial savings for state and local governments with single-payer reform. The CBO’s brief mention of the savings likely to accrue to these governments (and their taxpayers) omits probable savings from no longer having to bear the costs of public employees’ health insurance (projected to total $318 billion in 2030), as well as about $162 billion in savings on other health programs.

These, together with savings on Medicaid (which the CBO does remark on), would bring state and local governments’ total savings from single payer to about $800 billion in 2030 alone, reductions that provide important context for the CBO’s estimates of increased federal government expenditures. In 2021, Medicare benefit payments totaled $829 billion, up from $541 billion in 2011. Spending on Part B services (including physician services, outpatient services, and physician-administered drugs) accounts for the largest share of Medicare benefit spending (48% in 2021). Payments to Medicare Advantage plans for Part A and Part B benefits nearly tripled as a share of total

Medicare spending between 2011 and 2021, from $124 billion to $361 billion, due to steady enrollment growth in Medicare Advantage plans and higher per person spending in Medicare Advantage than in traditional Medicare. Medicare spending (net of income from premiums and other offsetting receipts) is projected to rise from 10% of total federal spending in 2021 to 18% in 2032, and from 3.1% to 3.9% of GDP over these years, due to growing Medicare enrollment, increased use of services and intensity of care, and rising health care costs. Average annual growth in Medicare per capita spending is projected to be 5.4% between 2020 and 2030, on par with the 5.3% growth rate in private health insurance per capita spending over these years. Funding for Medicare, which totaled $888 billion in 2021, comes primarily from general revenues (46%), payroll tax revenues (34%), and premiums paid by beneficiaries (15%). The Medicare Hospital Insurance (Part A) trust fund, which pays for inpatient hospital, skilled nursing facility, home health and other Part A services, is projected to be depleted in 2028, based on the latest projections from the Medicare Trustees.

Important things to consider when choosing between Medicare and ACA: Medicare is generally available to individuals aged 65 and older, as well as certain individuals with disabilities. Obamacare, on the other hand, is available to individuals of all ages who meet the eligibility requirements, which include income criteria and residency status. Medicare offers different parts, including Part A (hospital insurance), Part B (medical insurance), Part C (Medicare Advantage), and Part D (prescription drug coverage). Obamacare plans, on the other hand, offer essential health benefits as mandated by law, including coverage for preventive care, hospitalizations, prescription drugs, and more. Medicare provides a wide network of healthcare providers who accept

Medicare assignment, giving beneficiaries more flexibility in choosing their doctors and hospitals. Obamacare plans may have narrower provider networks, and it’s important to ensure your preferred healthcare providers are in-network to avoid additional costs.

Medicare Part D provides prescription drug coverage, while Obamacare plans may offer prescription drug benefits as part of their essential health benefits. Obamacare offers subsidies and financial assistance programs based on income and household size to help make coverage more affordable. Medicare does not provide these subsidies, but certain individuals with low income and limited resources may be eligible for assistance programs like Medicaid. Medicare Advantage plans under Medicare may offer additional benefits beyond what is covered by Original Medicare, such as dental, vision, hearing, and fitness programs. ACA faces challenges from Republican-led states to expand Medicaid and has issues with enrollment. Conservatives objected to the tax increases and higher insurance premiums needed to pay for Obamacare. Medicare for All would also require privately insured individuals to forgo their insurance and join the government program. The price tag and the requirement that all join makes Medicare for All unlikely to come to pass.

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Furman, J. (2014). Six Economic Benefits of the Affordable Care Act. The White House, President Barack Obama. Retrieved May 13, 2024, from https://obamawhitehouse.archives.gov/blog/2014/02/06/six-economic-benefits-affordabl e-care-act#:~:text=Lower%20long%2Dterm%20deficits%20due,and%20making%20wor kers%20more%20productive.

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