Health care reform is a process that is used to discuss various changes, additions, or subtractions that involve government policies and medical care delivery. It may include the creation of new laws, policies, or regulations, or subtracting items from the current law, in addition to changing the structures of existing laws and regulations.
There are 6 primary key points addressed in the typical health care reform campaign.
- Increasing coverage through insurance programs/companies in the private or public sector.
- Expand the options available to consumer to create more choice.
- Improve access to medical specialists.
- Add to the quality of health care being received at the individual level.
- Provide more health care to the general population.
- Limit cost increases or promote a decrease in cost for services rendered.
The actual reforms which take place depend on the structure of how services are provided. In the United States, reforms involve how to address medical care in a free market system. In nations with nationalized health care, reforms tend to address patient access, the quality of care, and cost.
Here are the pros and cons of health care reform to consider.
List of Health Care Reform Pros
1. Reforms attempt to address deficiencies within the system.
The primary goal of health care reform is to address problems that have developed within the system. That may include a surge in the number of households that are uninsured or under-insured. It may include an effort to decrease the amount of wait time a patient must endure before they are eligible to go see a specialist. There may be cost drivers involved to limit certain expenses. Every system of health care is unique, which means the reform efforts which must take place must also be unique.
2. It can reduce health care costs when implemented.
Health care reform is often intended to help people with their out-of-pocket spending on their personal health needs. In many instances, these efforts tend to be successful in some way. During the first two years of the implementation of the Affordable Care Act, out-of-pocket spending on health care services dropped by 12%. Insurance premium spending rose by 12% at the same time. For those in low income brackets, being included in a Medicaid expansion created an overall savings of nearly 20%.
3. Health care reform can change what services are received.
When patients are able to receive preventative care, the overall spending on health care for a community (or country) decreases dramatically. For that reason, many reform efforts tend to target specific services that people need to maintain good health to prevent spikes in reactionary costs. That is why free preventative care was mandated by the Affordable Care Act, which included free wellness visits with no deductible or copay.
4. Reforms allow people to manage their expenses wisely.
From a nationalized healthcare perspective, there are efforts in place to limit financial responsibilities at the individual level while still trying to provide choices. That creates declines in overall spending as a portion of GDP. In 2016, the United States spent 17.2% of its GDP on health care costs. In the United Kingdom, where healthcare is universal, spending was 9.7% of the GDP. The difference is that in the U.S., the amount of voluntary healthcare spending is 4 times higher than it is in the U.K. because of the reforms passed after World War II.
5. It allows for continued access to the health care market.
One of the biggest issues in the old American system of health care was that insurers were allowed to implement lifetime benefit provisions. Many benefits were capped at a total of $2 million. That meant one serious disease would be enough to eliminate all future access to a health care policy from that provider. Through the processes of health care reform, those caps were eliminated. Similar caps in universal systems are also removed periodically, such as a cap on waiting time for new residents.
6. Reforms can change who is permitted care access under specific plans.
One of the most popular provisions of the Affordable Care Act was the ability to have children insured on a parent’s health care plan until the age of 26. In systems with universal coverage, reforms may shift where someone may receive services, how long they must wait to receive services, or what costs individuals may face under certain conditions. There may be private insurance provisions covered under certain reforms that are proposed as well.
7. It can remove benefit expirations.
In some systems of health care, benefits are only provided to patients over a specific time period. If no care is sought, then providers could decide to deny care coverage because of a lack of access. By using reforms, coverage can be provided permanently instead, even if an individual doesn’t access care, which improves patient access. This creates added compulsory costs within the system as it expands the pool of care being provided, while often reducing the voluntary costs which people pay.
8. It may improve medication access.
One of the biggest expenses patients face in modern health care is the cost of medication. Even in some nationalized systems of care, patients may face specific costs when certain medications are desired. By initiating reforms to current health care, the structure of the system can be altered to take advantage of the economies of scale. Larger purchases provide deeper discounts on products, which allows consumers to save more on the items they need to complete their treatment plans.
9. Reforms can change the access point for care received.
The Affordable Care Act shifted where people with low or no health insurance received care. Emergency care in the U.S. is mandated by law. You cannot be denied care at a hospital’s emergency room, even if you do not have the ability to pay for that care. Before U.S. reforms, many low-income households were forced to use the emergency room as their primary care provider, even for simple things, like an ear infection. After the reforms, more people could go to a traditional general practitioner because they had a formalized plan that could be followed. With better access points for care, fewer people tend to fall through the cracks in a health care system.
List of Health Care Reform Cons
1. It may create negative results instead of positive results.
When the Obama Administration first proposed their version of health care reform, and infamous promise was made. Americans were told, “If you like your doctor, you can keep your doctor. If you like your health care plan, you can keep your health care plan.” The reality of the reforms being made turned this into a promise that could not be kept. Insurance companies began to terminate policies. Doctors were not available on some coverages. At the end of the reforms, many were left feeling unsatisfied.
2. There is always a financial cost to pay for reforms.
Reforms are intended to save money for patients over a long time period. The problem with a reform is that there must be an upfront capital expenditure to get things moving in the right direction. There is no guarantee that the savings which are expected through a reform will materialize. For the Affordable Care Act, in 2016, the total cost of the program was $110 billion. Many consumers saw insurance premiums increase anyway, choices became more limited, and some chose to pay the fine instead of paying for a policy because it was cheaper.
3. Reforms tend to gut the existing systems that are in place.
For many people, the idea of health care reform is a choice between what they already know and can cope with or what they don’t know and how it will affect them. There is always a risk that reforms will create a system that is worse instead of better, despite the good intentions of everyone involved. The goal of a reform is to create more haves than have nots. The issue is that the winners and losers of this type of effort tend to be unpredictable.
4. Health care reforms tend to cost more at the individual level over time.
Although the Affordable Care Act did help many poor households and individuals with pre-existing conditions find care, the average cost per household for health care actually went up. The average premium increase for households in the United States after the reforms launched were $232 per year. The average out-of-pocket savings, per person, was just $74. For a family of 6, that meant health care spending rose almost $1,000 for them each year, according to information published by CNBC.
5. It changes the structure of how care is delivered.
One of the issues that always affects a health care reform effort is that it often changes how care is delivered. That may mean the loss of a company-sponsored health plan. It could include reduced hours for workers to shift where the costs of health care lie. It may even change provided networks to implement necessary changes, which may shift which consumers qualify for care in specific areas. Although the intent is to improve how services are delivered, the results sometimes create more problems than benefits.
7. Reforms create uncertainty.
Change is always difficult to endure. Even if the changes help a majority of people, the journey required to get to those benefits can sometimes be problematic. When there is uncertainty, especially in a health care marketplace, then there are changes to the cost structures that patients face. That creates a circumstance where, even in private pay situations, there may be only one option for service for a community.
8. It may create penalties to keep people in compliance.
Healthcare reforms must be paid for somehow. The Affordable Care Act created a system of penalties through taxation to ensure compliance with the system. Many systems of nationalized health care pay for services through a process of taxation as well, similar to the costs of Medicare being taken out of a paycheck in the U.S., though fuel or certain consumer goods may be taxed for care access as well. Health care systems only work when people comply with how they are designed, so there will always be a handful of people who get penalized because they are unable to comply in some way.
9. Health care reforms take a lot of time to implement.
The Affordable Care Act was planned in 2009, then had provisions that began to be implemented in 2010. Some of the original provisions were not scheduled to take effect until 2020. For a reform to be successful, there must be a period of observation included in the timing to ensure ideas turn out as envisioned. If not, then the laws, policies, or regulations must be adjusted to ensure the most people possible are able to benefit from the new system.
When dealing with health care reform pros and cons, it is important to remember that the Affordable Care Act, or “Obamacare,” is not the only process of reform to consider. Since the 1970s, many of the world’s developed nations have reformed their health care in numerous ways. The goal is to improve care access. The problem is that someone always comes out feeling like they are receiving less and paying more for their care.
Blog Post Author Credentials
Louise Gaille is the author of this post. She received her B.A. in Economics from the University of Washington. In addition to being a seasoned writer, Louise has almost a decade of experience in Banking and Finance. If you have any suggestions on how to make this post better, then go here to contact our team.