Question 1

Mechanisms for Healthcare Reimbursement

Healthcare reimbursement is the payment to the healthcare provider for services rendered

to an individual. There are quite several different types of healthcare reimbursement

mechanisms. Each mechanism has its characteristics, and several things have to do with cost

controls, provider incentives, or the delivery of care by patients. Three primary types include fee-

for-service, bundled payments, and value-based reimbursement.

Fee-for-Service (FFS)

Fee-for-service is a traditional reimbursement model under which each service provided

to patients receives remuneration. As explained by Tulchinsky et al. (2023), payment is made

according to the quantity and type of service, including consultations, procedures, and tests; this

encourages many services to be provided because healthcare providers are paid more with such

incentives. However, Wang et al. (2021) argue that while this may foster the overuse of

healthcare services, driving up healthcare costs in the process, it does not necessarily translate

into better outcomes for the patient. For instance, FFS can tend to create unwarranted tests and

procedures, leading to higher healthcare expenditures.

Bundled Payments

Bundled payments—sometimes called episode-based payments—are usually defined as a

single payment covering all services provided for a particular treatment or condition over time.

For example, Yee et al. (2020) describe it in terms of paying for services across the continuum of

care and multiple providers and settings of care to coordinate the patient's care; additionally, it

may promote cost efficiency. For instance, in the case of knee replacement, bundled payment
includes pre-surgical visits, surgery, post-surgery care, and rehab. It also encourages providers to

provide appropriate care and minimize unnecessary services since they can enjoy the benefits of

savings if the overall cost of care falls below the set bundled payment (Yee et al., 2020). On the

flip side, the load on the provider is costs that exceed the bundled payment amount.

Value-Based Reimbursement

Value-based reimbursement models focus on the quality and results of care, not the

volume of services. In such a model, providers get paid by their ability or capacity to provide

good quality care, which will lead to better patient health outcomes (de Silva Etges et al., 2023).

Pay-for-performance and shared savings programs are significant components of value-based

reimbursement. Pay-for-performance rewards the providers based on meeting specific quality

standards, like lowered hospital readmission rates or better chronic disease management (de

Silva Etges et al., 2023). One of the prominent forms of these shared savings programs is that of

the ACOs, which further develop financial incentives for lowering the cost of healthcare services

while maintaining or improving its quality level. This model enables a view toward a continuum

of patient care by focusing on prevention, cost-effective management of chronic illnesses, and

patient satisfaction.

Question 2

Impact of the Affordable Care Act on Individual Medical Coverage

The individual medical coverage environment was shaken to its core in the United States

with the passage of the Affordable Care Act in 2010. This achievement, comprised a few main

provisions: increasing insurance coverage, lowering healthcare costs, and enhancing quality care.

Expansion of Coverage
 One of the primary goals of ACA was to help provide millions of uninsured Americans

with insurance. It has done so by creating health insurance marketplaces, on which people can

buy insurance plans, often subsidized by the government, so that premiums become more

affordable (Ercia, 2021). The ACA mandated that insurance companies had to sell policies to

everyone who applied at the same price, no matter their health status, and it stopped the practice

of charging higher premiums for such health conditions (Lambrew, 2018). Combined with

stopping the practices of denying patients with chronic or past health problems altogether or

quoting such patients exorbitant premiums, this section opened up access to health insurance for

this patient pool.

Essential Health Benefits

The ACA mandated that all health insurance products in both individual and small group

markets catered for a minimum essential health benefits package. Such benefits touched on

preventive services, mental health and substance use disorder services, prescription drugs, and

maternity and newborn care, among others (Abraham et al., 2019). The uniformity of the benefits

package across the various health insurance plans under the ACA guaranteed access to adequate

coverage, encouraged preventive care, and lowered out-of-pocket spending for all the care that

members deemed necessary.

Young Adult Coverage

The other most significant change brought about by the ACA was to enable young people

to be insured under their parent's policies until they reach 26 years of age. Under this policy, the

mandate was to lower the number of uninsured young adults—a class that has traditionally

experienced very high uninsured rates (Do & Peele, 2021). The ACA gave the needed support
for young adults who are currently in the process of schooling toward the job market by allowing

the extension of dependent coverage.

Medicaid Expansion

The ACA also expanded Medicaid eligibility to reach many more low-income people.

While the Supreme Court later held that States could opt out of their Medicaid expansion, many

did so, greatly expanding coverage among low-income populations (Kominski et al., 2017). As a

result, such expansion increased access to all health services for tens of millions of previously

uninsured persons, improving the relevant health outcomes and financial stability.

In sum, the ACA made significant changes in personal medical coverage for widespread

access, comprehensive benefits, and reduced disparities in gaining health care. Such reforms

have had effects that cut across time as ongoing policy debates shape its future course.
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