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Changes in the Health Care Market

Risks to Market-Based Competition in Health Care

The Patient Protection and Affordable Act (PPACA) places substantial new restrictions and mandates on health care providers, insurers, and consumers.

For the first time in U.S. history, Americans will be required by law to obtain health insurance. In addition, thousands of employers will be required to provide specific levels of health insurance to employees or face annual tax fines of thousands of dollars per employee.

The health care law also places a litany of new requirements on health care plans, including limitations on coverage of certain types of treatment and care. Restrictions on the health care industry also endanger student health plans and other specialized forms of insurance.

The disruption to the health care marketplace has already taken a toll—even before major provisions of PPACA have been implemented. For instance, the National Federation of Independent Business (NFIB) found that 12 percent of employer health plans had been eliminated or slated for elimination within a year after the health care reform law was passed.

Many physician groups are raising concerns about restrictions on their practices. The Association of American Physicians and Surgeons, which strongly criticized the health care reform law, says new mandates will allow non-physicians to perform certain procedures that could compromise care.

These are merely the early impacts and concerns. It is still too early to predict how widespread the law’s impacts on our economic recovery, individual health care choices, and overall quality of care may be. As states move forward with implementing the law, we will likely see even more disruptions to the health care market as more employers discontinue providing coverage altogether, forcing employees to procure coverage on their own; as some providers are driven out of the market due to government-imposed limits on competition; and as more Americans feel the impact of increased costs on their pocketbooks and family budgets.

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