Affordable Care Act's Attempt to Cut Costs

As of the 1st of October, the government has been essentially shut down. Congress is deadlocked, debating the benefits of the Affordable Care Act (ACA) implemented by President Obama. The plan itself has many aspects that are hoped to help the American citizens save money on health care, or afford health care in the first place. There is some confusion as to what the ACA’s cost cutting programs are, so here are a few:

  1. It is now encouraged for hospitals and other care providers to join  href=”” target=”blank”>Accountable Care Organizations (ACOs), which is designed to help patients stay out of the hospital and receive all the care they need, while still cutting out extraneous costs and placing more financial responsibility on the health care provider.
  2. The ACA also requires health insurers who spend less than 80% of the premiums from customers to reimburse many of those patients. According to CNBC, insurers of large companies must spend at least 85% of those premiums that they get on refunds or benefits to their patients.
  3. Independent Payment Advisory board, which is designed to recommend reductions in Medicare spending. This will happen when Medicare per capita exceeds the costs of specific targets, such as overall medical supplies. The reductions the board makes will stay in place unless Congress can come up with a different one that saves the same amount of money.
  4. Lastly, the ACA also implemented preventive care for customers that is hoped to save money over the long term. The idea suggests that those who have and use preventive care are less likely to bear chronic or long-term disease later in life.

     Health care spending accounts for nearly one-fifth of the American economy, and it is a cost that needs to go down. The ACA offers some options, and maybe those options will end up making all the difference.