Obamacare: Labor and Ethical Implications

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Introduction

It is important to note that the Affordable Care Act, or Obamacare of 2010, can be categorized as one of the most monumental healthcare reforms, which comprehensively altered the system of healthcare delivery and accessibility in the United States. Although the aims and objectives of such a complex plan were primarily based on ethical and moral incentives to provide a higher degree of access to the American people, its labor law and employment ethics remain questionable.

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It is evident that reforming an entire sector, even with good intentions, will bring both improvements and drawbacks. The given analysis will primarily focus on the employment and labor ethics of the Affordable Care Act, where the central argument is that Obamacare created a dangerous precedent in the labor market by incentivizing part-time employment and reducing coverage for the majority while increasing the number of insured.

General Overview

In order to conduct a well-structured and systematic analysis of the Affordable Care Act and its implications on labor laws, markets, and incentives, it is critical to have an in-depth understanding of the core elements of the reform. It should be stated that Obamacare mainly has three key objectives, which are healthcare cost reduction, quality of care improvement, and increasing the number of insured people (Manchikanti et al., 2017). In other words, the act aims to make healthcare more accessible, cheaper, and better. The first aspect of Obamacare can be considered the most prominent achievement of the reform since over 20 million people became insured after the implementation of the law (Manchikanti et al., 2017). Therefore, it is true that more people have become insured due to Medicaid expansion.

Moreover, the Affordable Care Act aimed to reduce healthcare costs by containing them within certain constraints. The proponents of the act claimed that the reform enactment led to a decrease in the costs of healthcare due to containment. In addition, the reform was also designed to improve healthcare quality by establishing a wide range of government institutions, commissions, boards, and agencies in order to increase the size and impact of the regulatory bodies (Manchikanti et al., 2017). In other words, the primary approach was based on quality control through more precise monitoring and control.

The reform established marginal differences in insurance rates for homogeneous groups of the population, which significantly reduced the cost of insurance for those who have high risks of developing the disease or its presence. Insurance companies are deprived of the opportunity to refuse insurance and set prohibitively high insurance rates; that is, a transition to compulsory risk-free insurance is provided. The changes also affected the volume of medical care, where part of the population preferred insurance plans that cover the provision of care only as a result of acute circumstances. The cost of this insurance was small, but it did not cover primary health care and significantly reduced the opportunities for citizens to participate in preventive measures. The reform stipulates that the insurance plan must necessarily include minimum assistance (Manchikanti et al., 2017).

These are medical measures for the prevention of diseases, early diagnosis of diseases, inpatient treatment, drug provision on an outpatient basis, and long-term care services in nursing hospitals. That is, the government sets the basic health insurance package. At the same time, the government also sets limits on “copayments” for medical care for the insured.

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Points of Conflict

Obamacare’s constitutionality issue was complex and controversial. In the first stage, the main confrontations unfolded around the provision of an individual mandate. Opponents of health care reform accused Congress of abuse of power and an attempt at freedom. In the second phase, the main target of Obamacare’s opponents was tax credits provided through exchanges established by the federal government.

However, the majority of the justices of the US Supreme Court accepted the arguments of the supporters of the bill and recognized the provisions on the individual mandate and the purchase of health insurance through state exchanges for federal subsidies in accordance with the US Constitution (Manchikanti et al., 2017). All of this ensures the continued existence of the Patient Protection and Affordable Health Care Act and legally strengthens the main provisions of the reform. However, the victory of the supporters was incomplete as the judges rejected a number of points related to the provision of medical care to the disabled and the poor.

Labor Market

Although the Affordable Care Act benefitted those who lacked health insurance by detaching employment from healthcare coverage, there are several ramifications associated with the reform. A study conducted on the topic suggests that “the ACA could cause a shift towards part-time work in the future as the mandate takes effect” (Mathur et al., 2016, p. 222). The logic behind it is that the Affordable Care Act mandates mostly apply to full-time employment, where workers working over a specific number of hours must be given healthcare insurance. Therefore, there were expectations and prognoses that employers would try to shift the employment structure from full-time to part-time, which means that insurance would no longer be provided by the organization (Mathur et al., 2016).

The evidence substantiates the given prognosis, where employers did shift work hours. It is stated that “employers with greater exposure to the PPACA (“Obamacare”) reduce enrollments in their health insurance plans to a larger extent after the law was enacted. Employers achieve this reduction in enrollment by shifting employment composition from full-time to part-time employees” (Almeida et al., 2021, p. 1). In other words, the Affordable Care Act has major implications on labor dynamics with a wide range of ethical implications.

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Shortcomings of the Reform

As it was stated previously, the three objectives of the Affordable Care Act evidently brought major changes to the United States healthcare system. In the case of the first objective of increasing the number of insured, the increase was mainly achieved by Medicaid expansion. However, it should also be noted that approximately 6 million individuals lost their insurance, and more people experienced a reduction in coverage (Manchikanti et al., 2017). It is stated that “as a result, exchange enrollment has been a disappointment and the percentage of workers obtaining their health benefits from their employer has decreased steadily” (Manchikanti et al., 2017, p. 111). In other words, the majority, especially the ones reliant on employer-provided coverage, experienced a substantial loss from the reform.

In the case of the second goal, one should be aware that there is a difference between a person being insured and the coverage linked with the insurance. A majority of the middle-class and working Americans underwent a significant coverage reduction since there was and still is an increase in out-of-pocket expenses (Manchikanti et al., 2017). In other words, all insured individuals became eligible to obtain essential healthcare services, but the coverage for many became limited to the minimum, where previously covered services became eliminated. In addition, cost containment-related improvements do not factor in the reduction in coverage, increase in prices of the drugs as well as out-of-pocket cost increases.

In regards to the third objective, the quality improvement approach of focusing solely on governance and control resulted in a highly strict standardization with no room for independent practices. Medical facilities experienced employment-related challenges due to the high costs of running such organizations (Manchikanti et al., 2017). It is stated that “despite a focus on preventive services in the management of chronic disease, only 3% of health care expenditures have been spent on preventive services while the costs of managing chronic disease continue to escalate” (Manchikanti et al., 2017, p. 111). Therefore, the shortage of healthcare professionals due to higher operational costs is not a favorable contributor to the desired quality improvements.

Personnel Laws and Ethics

It is important to note that incentives created by the Affordable Care Act operate in both employee and employer dimensions of the labor dynamics. In the case of the former, the core ethical principles of fair wages and non-discrimination in a workplace are either partly or fully violated by the reform since healthcare benefits of a job or position is a major part of the compensational bonus received by an employee.

Therefore, it is safe to state that by detaching insurance from employment and making the current agreements less appealing or devalued, the majority of workers reliant on employer-provided insurance suffered a certain degree of losses in this regard. In other words, the Affordable Care Act creates a dangerous precedent of violating worker rights since the previously valuable benefits associated with their positions became almost obsolete.

Moreover, the employment frameworks were also shifted by the Affordable Care Act since evidence supports the fact that part-time workers became more attractive financially than full-time ones. It also creates a dangerous precedent for the majority of American workers, who can no longer sustainably hold on to their jobs full-time, where employers either cannot afford or simply find it more financially feasible to shift the workforce to a part-time framework.

Therefore, there are also ethical implications of these changes, where companies and employers are incentivized to avoid using healthcare benefits as one of the main points of appeal for the workers since the latter can get essential services without employment. Thus, it is no longer useful for employers to try to lure talent to their organizations through health insurance packages, which is why the costs of these healthcare plans are no longer justified. In other words, the Affordable Care Act reduced worker conditions and compensation by devaluing these incentives.

The issue is complicated further by the fact that the patient’s freedom of choice of doctors, an insurance medical organization, and different volumes of insurance coverage in various insurance companies lead to the disintegration of the process of providing medical care to patients. The state practically does not interfere with the free market for financing health care through the system and does not regulate the market for the provision of medical services and drugs by price, which ultimately leads to an uncontrolled increase in health care costs. The prohibitively rising costs of health care payments are forcing insurance companies to raise rates for voluntary health insurance.

At the same time, employers must pay for these inflated rates, reduce the level of coverage of the insurance plan for their employees, or reduce the wages of employees. Providers of health care, providing health care to those who cannot pay for it, are forced to raise tariffs for their services. That is, there is a cross-coverage of the costs of medical services to the uninsured from the funds of the insured. The lack of uniform standards of treatment at all stages and levels of medical care, as well as payment for an incomplete case of treatment but for medical services, leads to unnecessary and repeated appointments and, in general, complicates the effective organization of the process of providing medical care to patients.

Conclusion

In conclusion, the Affordable Care Act aimed to achieve enhancements and improvements in three key domains, which are quality of care, cost of care, and the number of individuals insured. The reform did increase the number of insured individuals, but the effect was more profound on the working and middle class, who primarily relied on employment-related healthcare insurance. Firstly, the Affordable Care Act increased insurance by decreasing the coverage for the majority.

Secondly, the reform affected the labor market and labor dynamics by incentivizing employers to shift their workforce from full-time to part-time. Thirdly, the value of healthcare insurance from employment became devalued, which meant that employers’ expenditures on health insurance plans became no longer justified. Therefore, the implications or shortcomings of the Affordable Care Act are manifested in decline in proper working conditions, a decrease in compensation due to lower coverage, and affected fair wages elements of labor ethics. In the case of the latter, even unaltered plans provided by the employers were no longer as valuable since there was a sharp increase in out-of-pocket costs.

References

Almeida, H., Huang, R., Liu, P., & Xuan, Y. (2021). How does health insurance affect firm employment and performance? Evidence from Obamacare. S&P Global Market Intelligence Research Paper Series, 1, 1-53. Web.

Manchikanti, L., Helm, S., Benyamin, R. M., & Hirsch, J. A. (2017). A critical analysis of Obamacare: Affordable Care or insurance for many and coverage for few? Pain Physician, 20(1), 111-138. Web.

Mathur, A., Slavov, S. N., & Strain, M. R. (2016). Has the Affordable Care Act increased part-time employment? Applied Economics Letters, 23(3), 222–225. Web.

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DemoEssays. (2022) 'Obamacare: Labor and Ethical Implications'. 25 October.

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DemoEssays. 2022. "Obamacare: Labor and Ethical Implications." October 25, 2022. https://demoessays.com/obamacare-labor-and-ethical-implications/.

1. DemoEssays. "Obamacare: Labor and Ethical Implications." October 25, 2022. https://demoessays.com/obamacare-labor-and-ethical-implications/.


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DemoEssays. "Obamacare: Labor and Ethical Implications." October 25, 2022. https://demoessays.com/obamacare-labor-and-ethical-implications/.