AFFORDABLE CARE ACT POLICY ANALYSIS 2

Affordable Care Act Policy Analysis

Patient Protection and Affordable Care Act, often called Affordable Care Act (ACA) is a
statute passed under the administration of President Barack Obama. Signed into law in 2010, the
major proposals of the Act came into force in 2014 (Frean, Gruber, & Sommers, 2017). The Act,
which sought to increase access to healthcare insurance and reduce healthcare costs in the USA,
represents one of the most significant overhaul of the American healthcare system in more than
half a century.
Rationale for Affordable Care Act
The Act seeks to improve the quality of healthcare for Americans while simultaneously
reducing its cost in the form of reduced insurance premiums. Healthcare insurance premiums can
only be reduced when a large of Americans have health insurance. Having a large pool reduces
risk to insurance companies and, therefore, allows them to lower insurance premiums (Dye,
2017). Secondly, it seeks to improve the quality of healthcare by providing financial incentives
to health providers. It is hoped that healthcare providers will strive to improve the quality of care
that they provide to patients when there are financial benefits for such efforts.
Effects of Affordable Care Act on healthcare industry
The Affordable Care Act has had a major impact on the healthcare industry. Just five
years after its inception, over sixteen million additional Americans had obtained coverage for
health insurance (Frean et al., 2017). Most of these were previously uninsured young people as
well as the working poor who could not afford insurance premiums. The Act has, therefore,
managed to achieve one of its key objectives – reducing the number of uninsured people in the
USA.

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The Act has also increased health insurance coverage to include people with pre-existing
conditions. Previously, insurance companies could not provide coverage to Americans with pre-
existing conditions, such as cancer (Dye, 2017). Additionally, prescription drugs have become
more affordable especially for senior citizens that often have to deal with various chronic
illnesses (Frean et al., 2017). This reduction in the cost of such drugs is due to the Act increasing
the number of generic and prescription drugs that insurance companies cover.
While the Act has impacted the healthcare industry in many positive ways, it has also had
some negative impacts. For instance, because of coverage of people with pre-existing conditions
that are expensive to treat such as cancer, insurance premiums of many Americans have risen
significantly (Frean et al., 2017). The federal government has also had to raise taxes to cover for
increased costs of implementing Affordable Care Act. For instance, the Act seeks to increase the
number of people covered under government-funded Medicaid (Frean et al., 2017). More
enrollment in Medicaid has resulted in the government needing more money to spend on
healthcare. The government has also needed more money to fund insurance premium subsidies
for the working poor. Healthcare workers have also complained about the increased workload
required to meet many of the Act’s quality improvement measures.
How the effectiveness of the policy can be improved
The Affordable Care Act has enabled many Americans who were previously uninsured to
obtain health insurance. However, the Act can still be improved so that it better addresses the
healthcare needs of Americans. One way of improving it is through expanding premium
subsidies. By increasing such subsidies, the number of enrolments is likely to significantly
increase. Higher levels of enrolments are bound to reduce insurance premiums. The Act can also

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be improved by having more education, outreach programs, and enrolment assistance. Such
programs and activities will increase levels of enrolment.
How national policy objectives affect local behaviors and political viewpoints
National policy objectives and the methods national governments adopt to achieve these
objectives largely reflect the political views of the party in power (Dye, 2017). At the local level,
the amount of buy-in for the national policy is also largely determined by the general political
views of the local population. If a national policy is considered to be liberal, buy-in is likely to be
low in areas that are mainly conservative and vice versa.
How to measure policy improvements after implementing recommended changes
If the improvements recommended in this paper are made, they are likely to have a
positive impact on the nation’s health system. This impact can be measured by reviewing the
numbers of Americans enrolled in the program as well as the average cost of healthcare
insurance. Generally, the recommendations are likely to increase number of people enrolled for
healthcare insurance while reducing the cost of health premiums.
The level of oversight the national government should provide for the policy to succeed
For Affordable Care Act to succeed, national government should increase its involvement
in the Act’s implementation. For instance, it should closely monitor healthcare providers to make
sure that they are not overcharging for the services that they provide. It should also monitor
insurance companies to make sure that they are not denying coverage to any American who
requests to have one. Through such oversight, the government will ensure that the Act achieves
its objectives.

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References

Dye, T. (2017). Understanding Public Policy, 15 th Edition. Pearson
Frean, M., Gruber, J., & Sommers, B. D. (2017). Premium subsidies, the mandate, and Medicaid
expansion: Coverage effects of the Affordable Care Act. Journal of Health
Economics, 53, 72-86.