Question

Mandated health benefits have proliferated since 1970. Discuss the pros and cons of the ACA mandate requiring coverage of dependent children though to age 26. What are your personal thoughts regarding this mandate?

Answer 1

The Affordable Care Act (ACA) which is also known as Obama Care came into existence in 2010. The Act aimed to provide affordable health Insurance coverage to all Americans and to protect the consumers from tactics of Insurance Companies. Millions of Americans have been benefitted under ACA. Many of the beneficiaries were unemployed or low paid,disabled or people suffering from Chronic Diseases.The ACA Employer mandate requires "large employers"to provide a specified percentage of their full-time equivalent employees and those employees'families with minimum essential healthcare insurance.Employers must offer health insurance that is affordable and provides minimum value to 95% of their full-time employees and their Children upto the age of 26. Spouses do not count as dependents.This insurance must pay for atleast 60% of covered services.Large Employers who fail to comply with the coverage mandate must pay a no-coverage penalty to the IRS.

The ACA has been highly controversial despite its positive outcomes. The following are the pros and cons of ACA Act.

Pros:

More inclusive health care:

The mission behind the legislation is to provide better health services to individuals across all income levels, regardless of age. It is successful in restructuring the system to engender more respect for the elderly and for individuals living below the poverty line without consistent access to medical treatment.

Affordable Care:

Individual health insurance got a big make-over. All small business owners should understand these four advantages of individual health insurance when evaluating health insurance options:

Portability: Employees may keep their policy when they switch jobs.

Choice: Employees choose the policy that best fits their needs, including the network of providers and level of coverage

Savings: Individual health insurance costs less, and employees may be eligible for a premium tax credit to assist them with the cost of their monthly health insurance premiums

Coverage: Individual health insurance covers all essential health benefits, and is available to everyone regardless of pre-existing medical conditions.

Increased entrepreneurship:

Pre-ACA, small businesses were three times more likely to not provide health benefits to employees because of the enormous cost of insurance. The ACA might help encourage entrepreneurship and increase startup growth by eliminating the fear of being unable to provide employees with affordable health insurance.

Better compensation:

In the past few years, wage growth was flat, yet productivity increased. Compensation in the form of higher wages was being given up because the cost of providing health care to employees was increasing.

Dependents can stay under parents’ plan longer
Children can be insured under health plan until they are 26 years old.

Cons:

Arbitrary risk pools:

The employer based model pools population health risks based on an individual’s employer rather than on the general population. There’s no cognizant rationale that employers are an optimal place to group risk.

Lack of portability:

There’s little rationale that health insurance should have to change when one’s employer changes.

Restriction of consumer choice:

Having employers make the selection of health insurance restricts employee’s choice.

Ethical/Religious concerns ,complying with regulations:

This is essentially the Hobby Lobby problem. If the employer based health insurance system were deconstructed, health insurance would belong to the individual and employers’ objections could be removed from the equation entirely.

Unequal tax implications:

Currently, employers get a tax exemption for contributing to employee health insurance and employee contributions to employer sponsored health care is paid pre-tax. However, individuals purchasing through the individual market are paying entirely with post-tax money. If the goal is to encourage access to health insurance, there’s no reason to treat these groups of individuals differently.

Inefficient administration:

Having every employer privately negotiate premium rates with health insurance companies with little transparency in the negotiation process is wasteful of employer’s time.

Wrong consumer targeting:

Right now, the bulk of the health insurance market is targeted at employers rather than the actual beneficiaries of the health insurance. The hope is that employers have the best interest of their employees at heart, but employers’ interests are unique from those of their employees.

Inefficient tax expenditure:

Using tax breaks to create incentives for employers to provide health insurance to employees is backward. It’s better to directly target the tax breaks at the actual consumer rather than the employer.

Conclusion:

The ACA has helped millions of Americans gain insurance coverage, saved thousands of lives, and strengthened the health care system. The law has been life-changing for people who were previously uninsured, have lower incomes, or have pre-existing conditions, among other groups.The ACA is subject to changes every year. The legislation can be amended and budget can be modified according to the needs.Changes in the Health care field along with changes in Political Administration effects ACA and it is likely that ACA is going to change in every coming year. I personally believe that ACA codified protections for people with pre-existing conditions and eliminated patient cost sharing for high-value preventive services. And the law goes beyond coverage, requiring employers to provide breastfeeding mothers with breaks at work, making calorie counts more widely available in restaurants, and creating the Prevention and Public Health Fund, which helps the Centers for Disease Control and Prevention (CDC) and state agencies detect and respond to health threats such as COVID-19.