Case Study

Topics: Health insurance, Health economics, Health care Pages: 5 (1034 words) Published: February 8, 2015


Case Study: The Impacts of the Affordable Health Care Act: How reasonable are the Projections Roshni Padala
Ferris State University
Project 644 – Professor Steven Schuiling

Introduction:
ACA (Affordable Care Act) was signed by President Obama on March 23rd 2010 to reform the US medical system. ACA changes the non-group insurance markets in the US and each individual should have health insurance which helps significantly to develop the markets of the public insurance and support the private insurance coverages which leads to rise in the revenue from the new taxes and reorganizes the Medicare health insurance plan. According to Gurbers assumption of funding ACA is mainly based on the “Three legged Stool” approach followed to fix the Non employer insurance in the United states and which helps in the increasing the market of the health insurance in the country. The reforms included based on the three legged stool strategy to the non-group insurance market. First to prohibiting exclusions for the pre-existing conditions and charging different prices based on the health status. The second leg of the stool looks in to the individual authority to take the insurance policy. The third leg of the stool deals with the Subsidiary for the low income families to have the insurance plan. ACA finances through following sources for the above are

1) To improve the government Medicare plans for the seniors by reducing befits of the private Medicare Advantage programs which affects the 14% financing share. 2) Decreasing of the Medicare reimbursement through decrease in adjustments provided to the hospitals every year for the Medicare reimbursement due to this 33% of financing share has the impact. 3) Increase in the Medicare tax payroll by 0.9% and to the individual with more than $200,000 per year and families with $250,000. By this increase on the tax pay roll 21% of financing share will be changed. 4) Applying the excise taxes on the pharmaceutical companies, Medical devices manufactures and insurers to benefit the extended coverage of medical plan. This has share of 11% in the finance. 5) 3% consumer price index by 2018 is obtained from the Cadillac tax a nondeductible 40% excise tax on the insurance products which costs more than $10,200 for single person and $27,500 for family. 6) 21% of finance can be obtained from the late payments of the installments by individuals, employers and taxes on the high wage employees and helps in reducing the employer spending on insurance. Major risks:

The major risks which impacts the ACA funding are
1) Population Movement
2) Budget Implication
3) Health care costs
4) Premium Impacts
Population Movement:
According to the CBO estimates employee sponsored insurance has limited deterioration. There are instances in some firms with limited set of employees are not price sensitive about their decisions regarding the insurance offers to the employees. ACA does not provide any better plan to the 250% of the poverty line. Because of this Most employees didn’t get any better insurance deals outside the employer. According to the GMSIM, Synthetic firms which are similar to the actual firms get the data from the BLS (U.S. Bureau of labor Statistics) provides the earnings of the co-workers working in same type of firms in different locations in the country. By this synthetic firm we can compare the firms less than 100 employees to assess the low income of the workers. ESI enrollment became compulsory so that every uninsured individual should enroll. ACA free rider penalty to the firms with $2000-$3000 because if the employees get discounts on the health insurance exchange. ACA doesn’t provide any subsidies or insurance to the undocumented immigrants. Premium Impacts:

According to the CBO analysis on the ACA impact on the Health insurance premiums to the non-group and employer markets are like for non-group markets the comparison is with the state based...
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