Beth S Desch

The Affordable Care Act:

An Unsustainable Solution to Healthcare Reform

Siena Heights University

Team B

Beth Desch

Zaundra Lipscomb

Heather Park-May

Laurence Weinreich

Tameka Wilson

August 21, 2016


The Affordable Care Act (ACA) signed into law in 2010 has changed the Medical Insurance landscape of this country. Although the program is designed to increase access, control the high cost of healthcare and produce quality based delivery it has resulted in negative side effects and has an unsustainable future. Our team will argue that the ACA increases medical costs for both employers and employees. It also has had a negative effect on access due to shortages of physicians and nurses as a result of higher usages, early healthcare provider retirements and increased numbers of patients with coverage wanting medical services. The quality of U.S. Healthcare will suffer from fewer workers, large fines and penalties for not meeting quality standards and reimbursements cuts.

Financial Aspects of the Affordable Care Act

On March 23 2010 the ACA became law. Now we look at who pays for this law. According to the Wall Street Journal, who pays for ObamaCare, 2010, Donald Berwick, former Administrator of the Centers for Medicare and Medicaid Services (CMS) is quoted as saying “any health-care funding plan that is just, equitable, civilized and humane must-must redistribute wealth from the richer among us to the poorer and less fortunate”. The transfer of wealth in 2016 will move $104 billion from the top half to the bottom half of the country. “Much of ObamaCare’s redistribution will merely move income to the lower middle class from the upper middle class (p. 1)”. This is not making the rich pay their fair share, this is again, hurting middle class American’s.

The Wall Street Journal in “Who Pays for ObamaCare,2010” printed-

At least at the start, American’s in the 50th through 80th income percentiles- or those earning between $99,000 to $158,000- are nearly beneficiaries too, if not for the taxes on insurers, drug makers and other businesses that will be passed on to everyone as higher health costs. This group will eventually get soaked even more- probably through a value-added tax- once ObamaCare’s costs explode. But at the beginning the biggest losers are the upper middle class, especially the top 10% of income earners, mainly because a 3.8% Medicare “payroll” tax surcharge will now apply to investment income. ObamaCare, in short, is almost certainly the largest wealth transfer in American history.

A 2.3% fee will be leveled on medical devices, starting 1 January 2013, as written about by Cortese-Danile & Gornik-Tomaszewski, 2014, who also found that:

The 2.3% tax is imposed on medical devices such as CAT scan machines, stents, defibrillators, and other devices sold to hospitals and other health care providers. Regardless of where the item is manufactured, the tax is imposed on sales made in the U.S. One study indicates that the tax could result in job losses in excess of 43,000 and that manufacturers will be more likely to close plants in the U.S. and replace them with overseas operations (p.7).

According to Herring & Lentz, 2012, high cost insurance plans will be taxed at 40% starting 1 Jan 2018. This is known as the “Cadillac Tax”. This tax is not favored by unions who have used such plans to recruit and keep valued members. This tax will be sent to the U.S. Treasury by the employers but “the private health plans are almost certain to indirectly pass along the costs of paying the excise tax to employers as relatively higher premiums (p. 322)”.

Herring & Lentz, 2012 has found that few will be affected by the Cadillac Tax at first. But by 2025, one-half will be affected and by 2029, this increases to three-quarters. What was once supposed to bend the curve and reduce the budget deficit will have no effect because of the number of people who will be affected will have to be fixed. Thus softening the effect, it would have had on the ACA.

Access to Healthcare Aspects of the Affordable Care Act

In 2008, 83% of Americans younger than 65 years were covered by insurance, compared to the Healthy People 2010 target of 100%. Access to comprehensive, quality health care services is important for the achievement of health equity and for increasing the quality of a healthy life for everyone (). One of health reform's major objectives has been to provide insurance and access to primary care for all Americans (Fields, J MD, Teutsch, S, MD, and Koh, H, MD, 2012). Access to health care has been the focus of national health policy in recent years and made possible by the Patient Protection and Affordable Care Act. The Affordable Care Act of 2010, which mandates individuals obtain health care coverage or risk financial penalties. Although many people today have access to healthcare, barriers still exist. Some of those barriers include lack of availability and high cost ().

When thinking of cost of healthcare and affordability, one thing that comes to mind is deductibles. A deductible is the amount of money the insured must pay out of pocket before the insurer pays.

There are health insurance plans that have very high deductibles. These plans are called high deductible health plans. Gailbraith, A. et al. (2015), states a high deductible health plan is a plan with a deductible from $1,000 for an individual and $2,000 for a family, to $6,350 for an individual to $12,700 for a family. According to Frank, W., Gabrath, A., Kleinman, P. (2007), high deductible health plans have been promoted as a means of reducing overutilization, but could also be related to worse outcomes if a patient defers necessary care to avoid the out of pocket cost of the deductible. It is important for people with high deductible plans to know that not all services apply to the deductible. Previous studies have shown that of patients surveyed with a high deductible plan, 52% were aware that they had a deductible. Of this 52%, 35% knew what the amount of the deductible was, and only 5% was aware of the services that applied to the deductible. Studies also showed that patients with poor knowledge of their high deductible plans were more likely to avoid healthcare services that were exempt from the deductible (Reed et al. 2009). This alarming information indicates how little patients understand their high deductible plans, and the services that apply to the deductible, and services that are exempt from the deductible.

Preventive services such as physical exams, vaccinations, and lab pathology services as mandated by the Affordable Care Act are covered in full and do not apply to the deductible.

High deductible health plans are increasing in prevalence with group and individual coverage. Rising cost of insurance puts high deductible plans in demand, this is mainly because the higher the deductible the lower the monthly premium.

The main takeaways when considering high deductible plans is that although these plans provide affordable premiums, they also can be a barrier to healthcare for families or individuals who can’t afford the care, which puts most back where they started; underinsured and without access to needed healthcare.

Quality Aspect of Affordable Care Act

Workplace conditions affect the quality of care that patients receive. As the number of insured individuals increases, the demand for health care continues to increase. This increased demand causes increased workloads, burnout, fatigue, and stress for staff which certainly affects working conditions. These conditions lead to a number of RN’s finding other work in the field or leaving health care altogether and worsens the health care staffing shortage. Shifting from volume to value, in addition to reimbursement cuts from CMS, is causing more strain in the health care industry. The Affordable Care Act is essentially worsening that strain with additional penalties and cuts for hospitals.

The number of nurses we have to care for patients directly affects the quality of care. They leave for a number of reasons. A significant number of nurses are aging and nearing the point of retirement. “The National Council of State Boards of Nursing reports 55% of the RN workforce is age 50 or older; the Health Resources and Services Administration projects that 1 million nurses are eligible for retirement in 10-15 years.” (Snavely, 2016, p. 98). Nursing schools aren’t able to produce enough nurses to meet the demand. Programs aren’t able to accept students for a number of reasons. “According to the AACN, U.S. nursing schools turned away nearly 80,000 qualified applicants to baccalaureate and graduate programs in 2012 "due to an insufficient number of faculty, clinical sites, classroom space, clinical preceptors, and budget constraints" (Snavely, 2016, p. 99). Furthermore, an increased number of nurses will move out of the hospital setting and into the community as the passage of the Affordable Care Act has set the stage for the emergence of population health care changes the focus of health care to wellness and prevention. This trend will lead to an even greater RN shortage in the hospital setting.

Registered nurses leaving the field doesn’t always lead to finding a replacement since hospitals are looking to work lean and reduce waste to make up for decreased reimbursements and stiff penalties related to quality. Nursing staff often skip breaks, stay late, and work overtime. “…regardless of how hard nurses worked, they were unable to handle their workloads. Staff frustration, unhappiness and low morale translate into lower care standards. Overworked, stressed or burned-out healthcare professionals are more likely to deliver poor quality care. Care delivered by stressed and overworked health professionals in a fast-paced environment is unlikely to be patient centered, timely or safe).” (Humphries et al., 2014, p. 302). Research conducted by Aiken et al. (2002) found that for every additional patient a nurse is responsible for, the mortality rate increased by 7%). In 2002, the Joint Commission found nurse staffing levels to be a factor in 24% of sentinel events, while only 66% of nurses found their units to be properly staffed (Kavanaugh et al, 2012). Having overworked, stressed and burned out health care professionals providing care to patients has a clear and measurable effect on missed core measures, re-admissions, and quality standards which means financial penalties for organizations, and poor outcomes for patients.

The inability to meet staffing demands is a vicious cycle. The ACA is essentially forcing the industry to do more - provide higher quality care - with fewer resources. There currently aren’t enough nurses to meet the demand. Those left are forced to work longer hours, in unsafe conditions causing them stress, fatigue, and burn out, leading nurses to choose other fields of study. This means fewer nurses and fewer nursing educators - which means there will continue to be a nursing shortage.

The passage of the ACA will not only affect nursing and other ancillary departments; it will also affect providers. “According to a new national study from CompHealth, 36 percent of all physicians, and 45 percent of private practice physicians, are more inclined to leave the medical profession because of the passage of the Affordable Care Act. The study also found that 51 percent of physicians surveyed view the ACA unfavorably and 30 percent view it favorably. Physicians in private practice settings are most pessimistic about the ACA, with 61 percent saying they view the law negatively.” ("CompHealth Study Finds One-Third of Physicians Consider Quitting Profession After Passage of Affordable Care Act (ACA) | Business Wire," 2016). In addition to this, “The American Association of Medical Colleges projected a physician shortage of up to 159,000 by 2025 prior to passage of Universal Health Care and has projected an additional 25% after millions are added to the ranks of insured. USA Today reports the shortage will worsen as 79 million baby boomers reach retirement age and demand more medical care.” (Obama healthcare legislation exacerbates impending physician shortage: Innovative teleradiology technology compensates for physician shortage, 2010).

There are other ways the ACA is affecting staffing negatively. Employers are reducing the number of hours their employees work so that they aren’t required to provide health care coverage for those employees which further increases staffing shortages with the limited hours they will be working. The reduction in health care coverage and other benefits negatively affect retention and recruitment, again which further adds to the staffing shortage.

The health care workforce had its’ challenges trying to meet the demands of patient workloads prior to the Affordable Care Act. Lower reimbursements, fewer workers, and hefty fines and penalties for not meeting quality standards all point to a rather dismal future for health care in the U.S.


Healthcare reform is necessary if we hope to improve the state of the U.S healthcare system, and the overall health of the American citizens. The Affordable Care Act was intended to do this, but it creates added barriers to access to healthcare, and added financial burden for the middle class, while also adding regulatory and financial burdens to U.S. hospital systems. The Affordable Care Act is financially and strategically unsustainable as it does little to address the physician and nursing shortage, while at the same time adding millions of insured consumers.


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