The Affordable Health Care Act, colloquially known as Obamacare, was signed into law on March 23, 2010, legislation that encompassed more than 2,500 pages and destined to be the biggest change in healthcare in more than 150 years.
Many of the Act’s finer points haven’t been finalized or even written.
For instance, the office of Health and Human Services has not created a full set of rules and regulations to ensure the workings of the initiative.
Obamacare marks a milestone in the evolution of healthcare, but to fully appreciate the changes generated by the Act, it’s important to understand the history of healthcare insurance in the U.S.
Other countries typically utilize some form of socialized medicine, while the U.S. combines several methods that includes government subsidized programs, employer-based coverage, and direct sales.
Insurance During World War II
Prior to World War II, health insurance was a commodity that individuals purchased for themselves and was viewed much like the traditional rainy day fund – it was something to be used in an emergency.
As millions of men went to war from 1939-1945, the federal government placed a freeze on wages to prevent inflation. To acquire and retain workers, employers began offering healthcare to workers.
The practice gained widespread popularity with employees as manufacturing processes of the time became more dangerous and the potential for injuries increased. It was a non-taxed benefit that made it doubly attractive.
Policies were much less inclusive than those enjoyed by today’s workers and were primarily used for hospitalization needs.
Inequities For The Self-Insured
Those who had to purchase their own insurance received none of the tax breaks or discounts on premiums available to those who obtained insurance through large employer pools. Obamacare helps narrow that gap with insurance offered through the Marketplace for the approximately 9 percent of the population that purchase their own healthcare.
The self-insured can obtain coverage at rates estimated to be comparable to employer-based policies.
Medicaid And Medicare
To address the needs of the disabled, elderly and poor, the federal government instituted Medicare and Medicaid. Obamacare increases Medicaid income eligibility requirements.
The change allows more people to enter the system, but those living in states that already have generous income requirements may no longer be eligible and will have to purchase coverage through the Marketplace.
Obamacare provides government subsidies to help individuals pay for Marketplace insurance.
Healthcare Through The Years
Healthcare has been an issue in the U.S. since 1854, when it was first proposed for the benefit of the indigent and insane.
The effort to overhaul healthcare in the U.S. gained prominence again in 1933 under President Franklin D. Roosevelt, who managed to enact healthcare as part of Social Security, but not for all citizens.
President Lyndon B. Johnson oversaw the passage of Medicare and Medicaid in 1964, but it took almost 17 years for all states to participate.
President Jimmy Carter and President Bill Clinton proposed sweeping changes in 1977 and 1994, respectively, but both plans failed and were met with significant resistance by the medical community and pharmaceutical companies.
President Obama vowed to fix what he perceived to be a broken healthcare system and in 2010, the Affordable Health Care Act became the law of the land.
It expanded Medicaid coverage, established the Marketplace where the uninsured can buy policies, and established a core of benefits that every policy must offer.
