POL 321 Lecture Notes - Lecture 15: Healthcare.Gov, Punctuated Equilibrium, Risk Pool

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Lecture 15
The Affordable Care Act
In years leading to the Affordable Care Act (ACA), there were 2 categories of problems:
access to care & growing costs
o Many eligibility requirements if no health care from employer
o Access to care an issue therefore
o Growing cost of not just the insurance but also the medical care
o Burdens government & insurers, as well as employers & individuals
Healthcare reform is example of punctuated equilibrium
o No change for a while, then a major change
o Other argument is it was the incremental change leading to something more major,
like Medicare for All
Was priority of Obama to address this
Patient Protection & Affordable Care Act (2010, Obamacare/ACA)healthcare
o Individual mandate that everyone in the US must purchase healthcare on the private
market if not already covered
o Insurance companies must make preventative care free (no copay, even without
hitting deductible)
Physical, annual bloodwork, etc.
o No more lifetime capswhen insurance company has maximum amount they will
spend on you in your life
o Insurance companies can't exclude people for preexisting conditions
o Parents can keep children on plan until 26, unless the parent is on Medicare
o Subsidies if you make 100-400% of federal poverty line to go towards health
insurance purchase on private market
All features except individual mandate designed to increase access to care, but they
increase costs to the insurer
The individual mandate was to try to bring prices down by putting more healthy individuals
in the risk pool
o Insurers have large risk of adverse selection
o Sick people are most likely to sign up with new preexisting conditions change, but
prices would need to be raised and healthy people might drop; could continue in
death spiral
o Individual mandate seeks to prevent this healthy people drop and keep spreading the
ACA also had Medicaid Expansioneveryone in state making under 100% of poverty
line needs to be covered by Medicaid, or state will get funding taken away
Implementation and Assessment of Affordable Care Act
Online health insurance exchange healthcare.gov to shop for your private market plan
o Site kept crashing though, revealing issues with technological & administrative
Enforcement of individual mandate lied with the IRS
o Must provide certification document to IRS for whole year when you file your taxes
o Penalty that started low but went up to $700
o Cheaper to take the penalty than pay premiums though
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