Deck 6: Health Economics in a Health Policy Context

Question 1

What will happen to ACA if the individual mandate is found to be unconstitutional? Will the whole reform bill unravel? Will it work but not as well? Are there alternatives to the individual mandate that accomplish the same goals without potentially running afoul of the Constitution?

Answer 1

Meaning of individual mandate:
An individual mandate refers to the compulsory requirement of having insured the life of every individual. When the people do not take up this seriously, they will be fined with a hefty penalty. The age limit for paying the insurance is 18 years. When a person crosses the age of 18 without a policy, then he will have to pay the fine.
The state of the health care of Country U if individual mandate is considered as illegal:
If the individual mandate becomes illegal, then the insurance companies will face a huge loss. The care providers will lack interest towards providing the health benefits. They generally have a strategy stating that either pay the insurance or pay the penalty.
When individual mandate becomes illegal, the people will not invest in the health insurance policy any more.
Determine if the reform bill will unravel:
It is obvious that the reform bill will unravel when the individual mandate becomes illegal. The individual mandate was previously considered as legal and compulsory. Hence, there will be changes in the bill by removing it completely.
Alternatives to the individual mandate:
The insurance companies must provide plans in such a way that the people voluntarily come forward to insure for their health. This will make a huge change in the life style of the people as well as it changes the mindset of the people. The aim of the insurance companies must be to provide service to the people. However, in the present scenario the insurance companies aim only at profit making. The insurance companies must give up this habit.

Question 2

There was a lengthy debate about whether to include a public option in health reform. A public option is some type of government-run health plan that would be available to compete with private plans. A public option could exist within the health exchange model or outside of it. Instead of a public option, Congress voted to require the Office of Personnel Management, which runs the Federal Employee Health Benefit Plans, to contract with at least two multistate plans in every state health insurance exchange.
What are the pros and cons of having a public option? Does the Office of Personnel Management compromise achieve all or some of the goals of having a public option? Why do you believe the Office of Personnel Management compromise was acceptable to legislators but the public option was not?

Answer 2

Public option in health reform:
There was a debate regarding whether there must be a public option in the health reform. Public option refers to the plans of the government in opposition to the plans of the private officials. Both the plan of government and private are based on providing good plans to the society.
The congress wanted the government to contract the personnel management that deals with health.
The following are pros and cons of having public option:
Public option helps the people from the hands of private officials. The private enjoys monopoly and hence the government steps up into the public option.
The public option acts as a hindrance to the works of private people. The government interference would reduce the profit of private companies.
People would start opting for public option rather than listening to the private officials.
Determine whether it is better to have a personnel management:
It is found that the personnel management compromise achieves almost all the plans of the public option. It is better to make use of the personnel management rather than having a public option.
The reason for accepting personnel management:
Personal management provided better plans for the health care of the people. The plans were also cost efficient. The people of all classes could make use of this care. There were better schemes for pregnant women, which was welcomed by the public. The personnel management followed a proper regulatory method to take care of the people. Hence, personnel management was welcomed rather than public option.

Question 3

Premium and cost-sharing subsidies are estimated to cost $350 billion over 10 years. Is this a good use of resources? Are these subsidies well designed? Are they sufficient to make health insurance affordable? Do they cover people with incomes that are too high? Should they cover more people?

Answer 3

Premium and cost sharing subsidies:
The premium and cost sharing subsidies are those which help the poor people by getting funds from the rich. People who come under 250% of poverty can avail this. This subsidy is best for the poor people. They get better health benefits out of it.
It is estimated that the premium and cost sharing subsidies would increase up to $350 billion over the next 10 years.
Determine if this is a good use of resources and if it is well designed:
Health is considered as the primary part of human beings. If health is not good, a person cannot achieve anything. Hence, saving for the future medical expenses is deemed as a good use of resources.
The subsidies are found to be very well designed and that is reason behind the value of subsidies increasing up to $350 billion in the future.
Determine if the subsidies are sufficient to make health insurance affordable:
While considering the present scenario, the subsidies are found to be sufficient for minor problems of the people in the society. This kind of subsidy will help the society from being away from health related problems. The people who donate must be on donating until they earn to help the poor people in excess of their needs.
Determine if the subsidies cover people with high income:
It is determined that the subsidies cover only people with low-income. The high-income groups have to pay insurance policies that would help them in sudden difficulties. Hence, it is clear that the subsidies do not cover people with high income.
Determine if the subsidies should cover more people:
If the subsidies cover more people, then there would be insufficient funds for taking care of the people below poverty. Sometimes, the middle class people will run with shortage of funds. During special and rare cases, the subsidies must cover such people.

Question 4

The ACA includes a tax on insurers for more generous health plans. Because it is likely insurers will pass on the cost of the tax to consumers, the idea behind the tax is to provide incentives for people to choose lower-cost plans. In theory, the less money employers spend on health care costs (and other fringe benefits), the more they will spend on wages. The income tax paid for by workers on their higher wages will provide revenue that can be used to pay for health reform. In addition, people may be less likely to obtain unnecessary care if fewer services are covered by their plan or if cost sharing is higher.
Is it likely that employers will trade lower benefits for higher wages? Are there times or industries where this trade-off is more or less likely to occur?
In 2010, the average cost of an employer plan was $5,079 for single coverage and $13,770 for family coverage. Beginning in 2018, plans that exceed $10,200 for individual coverage and $27,500 for family coverage are taxed. Congress rejected lower thresholds for the tax ($8,500/$23,000) that would have raised an estimated $149 billion. Did Congress pick the right thresholds for the tax? Should they be higher or lower?
Why did Congress delay implementation of the tax until 2018? What are the pros and cons to having the tax start well after the main provisions of health reform are in place?

Question 5

As of 2009, the U.S. Preventive Services Task Force no longer recommends routine screening mammograms for women ages 40 to 49, although they said the decision should be made by the patient and her physician. The U.S. Preventive Services Task Force found that physicians would need to screen 1,000 women to save 1 woman's life and concluded that it was not worth the risks associated with false positives (anxiety, unnecessary biopsies, overtreatment). Others, such as the American Cancer Society, disagree with the U.S. Preventive Services Task Force and conclude that the lifesaving effects of routine mammogram screening outweigh the potential harm.
The idea of comparative effectiveness research is to provide information about the value of different tools. Once that information is available, who should make the decisions about whether to provide coverage and reimbursement for a particular good or service? Can one objectively assess the risks and benefits associated with mammograms or other services or medications? Should decisions be made solely by the patient and treating provider? Does it matter if decisions affect taxpayers (for example, if a patient is covered by a government program such as Medicare or the Veterans Administration)?