Rationale of health insurance expansion
Medicaid Expansion is a federal/state partnership with shared authority and financing. The healthcare law of Medicaid expansion of ACA increased the eligibility to people to be covered under the medical insurance. This circumference of the coverage plan mainly covered up to 138% of the federal poverty level (nearly $16,394 per annum for a single adult and $27,821 in case of a family of three people in the year2016). Thus, it can be said that Medicaid expansion of the Affordable Care Act (ACA) helped to increase the coverage of the health insurance among the children, their parents, elderly people and people with disabilities among the low-income countries (National Conference of State Legislation, 2018). According to the reports published by Antonisse et al. (2016), the Medicaid Expansion of ACA helped to increase the access to care, proper utilization of resources and quality health-related outcomes along with other economic benefits. The survey conducted by Antonisse et al. (2016) highlighted that the Medicaid expansion of ACA increased significant coverage gains along with prominent reductions in the uninsured rates among the low-income countries and vulnerable group of populations. The states that implemented the health insurance expansion via the waiver were able of view the coverage gains and all these helped to reduce the subsequent consequences of adverse selection. Adverse selection also deals with the lack of adequate and affordable access to care among a comprehensive of population. The research conducted by Antonisse et al. (2016) showed that the Medicaid expansion has positively impacted the overall access to the healthcare, affordability of care and the utilization of services along with financial security among the low-income population. All these helped to gain positive economic outcomes and thereby helping to reduce adverse selection across the population.
However, during the year 2012, the U.S. Supreme Court left the decision over the states to decide whether to implement the concept of the Medicaid eligibility expansion. As per the reports published by the Kaiser Family Foundation (2017), till January 2017, 19 states have opted not to implement the Medicaid expansion of ACA in their healthcare programs. This decision by certain states further highlighted the importance of health care insurance expansion by Garfield et al. (2016). Garfield et al. (2016) stated that the states who were against the decision of the Medicaid expansion of the ACA lead to the generation of the “coverage gap” which further increase the adverse selection. According to Garfield et al. (2016), nationally there are more than two millions of poor adults who are uninsured. This uninsured group of population falls into the category of the “coverage gap”. This signifies that for the states who disapprove the Medicaid expansion of the ACA, is of the opinion that these adults who are “coverage gap” are above the Medicaid eligibility but are below the lower limit for lower limit for the prevailing Marketplace premium tax credits. Thus via abiding the Medicaid expansion of the ACA will make these individuals eligible for insurance policy and thereby leading to better quality access. Thus, in other words it can be said that the lack of proper expansion of the ACA, one of the biggest health insurance in the United States led to an increase in the number of the uninsured adults as reflected in Texas, Wisconsn, North Carolina and Georgia. This in turn increases the adverse selection (Garfield et al., 2016). If all the states that comes under the jurisdiction of The US approve to expand their health insurance Medicaid programs, an additional number of 7.8 million Americans would get health related benefit and significant of them are cancer patients or survivors (American Cancer Society, 2017).
Economic implications of health insurance expansion
Reduction in uncompensated care
The main economic implication of the health insurance (ACA) expansion is, decrease in the rate of uncompensated care (Glied & Miller, 2015). The reports published by Collins et al. (2013) highlighted that the Medicaid expansion of the ACA helped in the significant reduction in the rate of “hospitals” uncompensated care costs. Hospitals are experiencing a significant reduction in the total number of the uninsured, self-pay admissions along with the emergency department visits. The hospitals calculated an approximate of 21% ($7.4 billion) decrease in their uncompensated care cost during the year 2014. Thus, in other words it can be said that the states who approved the health insurance expansion accounted for about $2.6 billion savings on the healthcare cost in comparison to the non-expansion states. Alleviating the overall uncompensated health care costs, help the hospitals to retain their business while providing significant service to their communities (Dranove, Gartwaite & Ody, 2017).
Increase in the Gross Domestic Product (GDP)
Another economic implication of the health insurance expansion in the US is increase in the GDP. Increase in GDP is again the direct indicator of the economic development. With the insurance to cover all the associated medical care costs, residents are now having more money to spend on other goods and services and this in turn is contributing to the overall economic growth of the country (Dranove, Gartwaite & Ody, 2017).
Other economic implications of the health care insurance expansion in the United States include increase in the job opportunities due to GDP growth of the country and improved access to the care for more citizens (Dranove, Gartwaite & Ody, 2017).
Impact of health insurance expansions on health care organizations in New York
A stronger health care system
While the state covers a significant share of the uncompromised cost of care, hospitals absorb a huge share of these healthcare costs. According to the information highlighted by the American Hospital Association (2011), the hospitals in U.S absorbed &41.1 billion under the overall costs for caring for the uninsured and underinsured group of population. This financial burden creates an economic strain on hospitals and the associated health care providers. Via expansion of the ACA (health insurance) the total number of residents with the available health insurance will increase. This in turn will help to decrease the uncompensated care costs that the hospital authority should shoulder. This again will strengthen the healthcare system for a comprehensive group of population in the state (Families USA, 2013).
Reducing the costs and increasing the state revenue
Expansion of the health insurance will help to reduce the number of insured people in the New York. Increase in the number of the insured people will lead to the decrease in the overall cost of the healthcare. Decrease in the healthcare cost will enable the healthcare organization to treat and cure more patients. As under the reduced care cost, more individuals will be interested in being admitted to the hospital for the getting the treatment done. This will in turn help to increase the overall revenue of the health care organization. Increase in the revenue will in turn will help the health care organization to effective work their infrastructure, workforce and resources. All these will contribute to the overall increase in the quality of healthcare and better patient’s outcome (Families USA, 2013).
Increase in hospital revenue
Moreover, it is can also be estimated that Medicaid expansion of the health insurance will significantly increase the number of emergency visits per person. This will help to increase the work efficiency of the emergency department healthcare professionals along with increase in the generation of the revenue of the hospitals from the emergency department (Taubman et al., 2014).
Conclusion:
Thus from the above discussion, it can be concluded that the expansion of the Affordable care Act, the universal health insurance of the United States will help to reduce the adverse selection. Moreover, Medicaid expansion of the ACA has significant economic implications over the country (US). The expansion of the health care insurance will positively benefit the country in the domain to reduction in the overall health care costs, increase in the access of care to the huge group of population, decrease in the total number insured individuals along with increase in the revenue for the country.
In the marketplace of health insurance, adverse selection is known as a process where there is a lack of asymmetry between the buyer and seller leading to suboptimal pricing, efficiency loss and market failures. A seller of health insurance generally knows less in comparison to the buyers of the health insurance about their health status and monthly health care cost. It is not astonishing that this adverse selection arising out of gap in knowledge, affects the stability of different types of health insurance plans. In order to overcome the hurdle of adverse selection among the subscribers of the health insurance, proper expansion of the health insurance is mandatory (Shi et al., 2017). The following assignment aims to analyze how the expansion of the health insurance help to reduced the problem of adverse selection under the light of Affordable Care Act (ACA). The assignment also aims to discuss the economic implications of the health insurance expansion in United States. At the end, the assignment with throw a brief light on how the expansion of health insurance can cast a significant impact on the health care organization of New York, chosen region in United States.
References:
American Cancer Society – Cancer Action Network. (2017). Health Insurance Expansion – United States. Access date: 28th June 2018. Retrieved from: https://www.acscan.org/policy-resources/health-insurance-expansion-united-states
American Hospital Association. (2011). The opportunities and challenges for rural hospitals in an era of health reform. Trendwatch (April 2011), 3.
Antonisse, L., Garfield, R., Rudowitz, R., & Artiga, S. (2016). The Effects of Medicaid Expansion under the ACA: Updated Findings from a Literature Review. Health Affairs, 35(10), 1810-1815. Retrieved from: https://www.kff.org/medicaid/issue-brief/the-effects-of-medicaid-expansion-under-the-aca-updated-findings-from-a-literature-review-march-2018/
Collins, S. R., Rasmussen, P. W., Garber, T., & Doty, M. M. (2013). Covering young adults under the Affordable Care Act: the importance of outreach and Medicaid expansion: findings from the Commonwealth Fund Health Insurance Tracking Survey of Young Adults, 2013. Issue Brief (Commonwealth Fund), 21, 1-15. Retrieved from: https://europepmc.org/abstract/med/24044138
Dranove, D., Gartwaite, C., & Ody, C. (2017). The Impact of the ACA’s Medicaid Expansion on Hospitals’ Uncompensated Care Burden and the Potential Effects of Repeal. Issue brief (Commonwealth Fund), 12, 1-9. Retrieved from: https://www.ncbi.nlm.nih.gov/pubmed/28574233
Families USA – Voice for Health Care Consumers. (2013). New York’s Economy Will Benefit from Expanding Medicaid. Access date: 28th June 2018. Retrieved from: https://familiesusa.org/sites/default/files/product_documents/NY-and-Medicaid-Expansion.pdf
Garfield, R., Damico, A., Stephens, J., & Rouhani, S. (2016). The coverage gap: uninsured poor adults in states that do not expand Medicaid–an update. Menlo Park, CA: Kaiser Family Foundation. Retrieved from: https://www.kff.org/medicaid/issue-brief/the-coverage-gap-uninsured-poor-adults-in-states-that-do-not-expand-medicaid/
Glied, S. A., & Miller, E. A. (2015). Economics and health reform: academic research and public policy. Medical care research and review, 72(4), 379-394.
Kaiser Family Foundation (2017) . Status of State Action on Medicaid Expansion Decision. Accessed 28th June 2018. Available at https://kff.org/health-reform/state-indicator/state-activity-around-expanding-medicaid-under-the-affordable-care-act/?currentTimeframe=0
National Conference of State Legislation. (2018). Affordable Care Act Medicaid Expansion. Access date: 27th June. 2018. Retrieved from: https://www.ncsl.org/research/health/affordable-care-act-expansion.aspx
Shi, L., Feng, C., Griffin, S., Williams, J. E., Crandall, L. A., & Truong, K. (2017). Does Awareness of the Affordable Care Act Reduce Adverse Selection? A Study of the Long-term Uninsured in South Carolina. INQUIRY: The Journal of Health Care Organization, Provision, and Financing, 54, DOI: 10.1177/0046958017727103
Taubman, S. L., Allen, H. L., Wright, B. J., Baicker, K., & Finkelstein, A. N. (2014). Medicaid increases emergency-department use: evidence from Oregon’s Health Insurance Experiment. Science, 343(6168), 263-268. DOI: 10.1126/science.1246183
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