Reducing Healthcare Spending, Provisions of the Affordable Care Act (ObamaCare)

WP-health_costsOne of the main purposes of ObamaCare, also known by most people as the Affordable Care Act (ok not everyone knows), is reducing healthcare spending for Americans overall. Healthcare spending accounts for almost one-fifth of the overall US Economy. This is a massive number considering other countries spend significantly less and their quality of healthcare is not worse than America’s. In fact Business Insider ranked the US 37th in the world for overall healthcare system performance. YES, that means 36 countries have a better healthcare system than the US.

So what are we doing to fix this?

One of the ACA’s cost-cutting tools is financially penalizing hospitals by reducing government Medicare reimbursements to them if they have an excess number of patients who are released from the hospital and then readmitted within a month for heart attacks, heart failure and and pneumonia.

Another is requiring health insurers who spend less than 80 percent of the premiums they receive from customers on health benefits for them to reimburse some money to those customers. Insurers of large companies have to spend at least 85 percent of the premiums they receive on benefits or pay refunds.

In 2018, there will be a 40 percent excise tax slapped on health insurance plans whose premiums exceed $10,200 for individuals and $27,500 for families. This tax on so-called Cadillac plans is designed to tamp down overuse of medical care by people with those plans.

The law also encourages hospitals, primary care physicians and other medical providers to join forces in so-called Accountable Care Organizations, whose goal is to coordinate care for their patients and, if they meet certain quality targets such as keeping those people healthy and out of the hospital, get paid more by Medicare.

We think, as the government works on reducing healthcare spending, decreasing hospital stays and hospital readmission, and overall healthcare spending, the need for in-home healthcare services is going to grow. This is a good sign for aging seniors that have spent countless days in and out of the hospital for trivial tests and procedures. Hopefully, the government will push to allow our skilled nurses and home health aides to handle as much of the peripheral medical tasks as possible. 

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Source: CNBC