Health Insurance, a Legal Matter

Robin Wood

Doctor Johns

ENG 201

21 Jun 2017

Health Insurance, A Legal Matter

Health insurance has become a legal matter for citizens of the United States. You must insure your health or be taxed for not complying with the law. Since health insurance is a form of protection that provides a form of financial security, the federal government has deemed it appropriate that US citizens should be required to protect themselves. As of January 1, 2014, Americans were required to show proof of health coverage or be penalized on their annual tax return. This requirement falls under the Affordable Care Act (ACA) also known as Obama Care. This mandate forces American individuals to purchase a product (health insurance) so that they remain law-abiding citizens. The legality of the Affordable Care Act mandate has drawn the attention of the Supreme Court on multiple occasions. The Supreme Court has the task of determining if the US Government’s role under the Affordable Care Act is legal and that it does not violate the American Constitution. Allison Brennan, MPP, senior advocacy advisor of MGMA Government Affairs, indicated that Supreme Court had ruled in favor of the mandate under the Congress’s power to tax (8).

The Affordable Care Act was initiated to ensure that low-income families and families slightly above poverty level can maintain health insurance. In its (health insurance) earlier existence, very few Americans had health insurance. Paying for sickness, disease, or injury fell to the patient and their family. The poor and less fortunate did not fare well with the inability to afford care, therefore they would suffer and die. The wealthier individuals could pay for and obtain care and medicines to help them overcome. However, the working middle class was left to their own resources. In the mid-sixties, a group of teachers in Texas decided to do something about their health care dilemma. They negotiated a flat rate for health care so that their families could have affordable care. Their actions help to draw big insurance companies into providing care through employers. During this same time, the federal government viewed the growing health care problem in a similar manner as the Texas teachers. The governments method to improve health care for low-income families was to introduce Medicare for the retired and Medicaid for the poverty-stricken families.  

President Lyndon B Johnson set out to address health coverage for the poor and low-income families by implementing the first US healthcare programs.  In his State of the Union address on January 4, 1965 he implied that America could not be great nation by education alone, but that "Greatness requires not only an educated people but a healthy people” (11). The healthcare programs, Medicare and Medicaid, are government ran health care programs that pay some or all medical expenses for individuals who qualify for the services.  Medicare, the insurance for the retired elderly, (sixty-five years and up) is provided and ran by the Federal government. Medicaid, created by the federal government but administrated at the state level provides medical coverage for low-income citizens living in the United States. Each state sets the requirements for eligibility and those requirements differ across states. In addition to Medicare and Medicaid, employers began offering insurance as benefit for its workers.

Work place health benefits provide coverage for America’s working middle class. This benefit (work place health insurance) first became popular in the nineteen forties and fifties during a time when the federal government had mandated a wage freeze for everyone. Unable by law to attract workers with money, employers chose to incorporate health benefit packages as a substitution for wages. The promotion of health care as a benefit in the job market is continued today but the costs of the benefits are stifling for both the employer and employee. Article by Thomas O’Rourke, writer for the American Journal of Health Education, concluded the overall focus of the Affordable Care Act was to focus on issues such as access and cost (1). To offset some of the costs for health care, the US government has claimed that if everyone pitched in, including the healthy people, then the cost of health insurance coverage would go down.  

Federal government (Obama Administration) has now taken a stance to require that those not considered low-income, elderly (sixty-five or older), or otherwise covered through corporate insurance to protect themselves. That mandate requires that all people, healthy or not must be covered under an insurance plan. The government has agreed to subsidize the cost for individuals who meet certain requirements based on their income level. Failure to protect oneself will result in a tax fine. Anja Rudiger, who has been director of programs at the National Economic and Social Rights Initiative (NESRI), stated it well in her article regarding Obama Care, “it is time for constructive new initiatives that steer the current energy around health care reform toward the goal of guaranteeing the right to health care for all”  (1). Many debates and much discussion has been rendered as result of this new requirement. Is it good? Is it bad? Just depends on who is asked.

One of the intents of the Affordable Care Act was to create a pool of people that could help support the health care costs. Participation by these individuals (the healthy) reduces premiums because they would require minimal services. “A fair number of young, healthy workers choose not to purchase insurance, believing they do not need it. Advocates of universal coverage want to lure that group into the insurance pool because they tend to use fewer medical services and help keep premiums down” (Connolly 1). To entice the healthy, many insurance companies are offering what is called catastrophic coverage. This coverage comes with low premiums and high out of pocket costs if utilized. The effects of this type coverage can be devastating to an individual if there becomes a need to utilize it. This false sense of security has led to many high and outrageous doctor bills for those who are just trying to do the right thing and be compliant to the law. This was just one of the several immediate issues identified for the Affordable Care Act.

When the ACA went into effect in 2010, Americans had until January 2014 to comply with this law. Upon opening, the market placement centers had immediate issues. The centers were not reliable and their websites were failing. The system crashed the first day of open enroll due to system overload. It was announced that the failure was due to under estimation of the number of individuals applying for subsidiary help. There were also regulations within the new law that caused existing insurance plans to not be compliant and dropped by the carriers. The Obama administration had declared that individuals would be able to keep their current insurance. However, that became a false statement due to new requirements making existing health insurance policy out of compliance, resulting in cancellation of policies. Senator Ted Cruse spent twenty-one hours in a speech before the Senate opposing the new law. In his speech he stated “We have learned that promise did not, in fact, meet reality because the reality is millions of Americans are at risk of losing their health insurance” (4). Negative criticism has resulted in the health care program implemented by the Obama administration to be scrutinized and the program has struggled with maintaining costs and higher premiums.