The Patient Protection and Affordable Care Act was signed into law in 2010. This paper summarizes three provisions of the ACA and analyzes the financial implications these provisions might have on the healthcare industry and U.S. economy. The three provisions are: the expansion of Public Programs, tax changes related to health insurance or financing health reform, and changes to private insurance.
Expansion of Public Programs
Under the Affordable Care Act the provision of “Expansion of Public Programs” exists to make changes to Medicaid and CHIP. The goal is to, “Expand Medicaid to all non-Medicare eligible individuals under age 65 (children, pregnant women, parents, and adults without dependent children)” (Summary) that meet a certain income requirement. Newly eligible adults, through this provision will receive a benefits package that will equate to the essential health benefits. Due to Supreme Court ruling, it is optional for states to decide to expand Medicaid. For financing this expansion, states would receive 100% federal funding from 2014-2016. This amount would regress down to 90% by 2020. Additionally, fee-for-service Medicaid payments will increase to 100% Medicare payment rates in 2013 and 2014. With this provision, states are required to maintain income eligibility levels with regards to Children’s Health Insurance Program (CHIP) until 2019. Starting 2015, there will be a 23 percentage point increase that states receive for the CHIP match rate. Those who cannot enroll in CHIP because of enrollment caps can receive tax credits. This provision will have a significant positive financial impact on the healthcare industry and U.S. economy as a whole. According to Glied & Ma (2013), “expansion in coverage (...
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...are Act, in general it will improve the healthcare industry.
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