Enhancing Healthcare Efficiency and Outcomes- Key Provisions of the Affordable Care Act

Enhancing Healthcare Efficiency and Outcomes- Key Provisions of the Affordable Care Act

The Affordable Care Act

President Obama started the Affordable Care Act in 2010 to improve the healthcare system. The Patient Protection and Affordable Care Act, referred to as ObamaCare, is the official name of the legislation. The Act was created to make it easier for all Americans to obtain and keep their health insurance. The Act significantly emphasized Americans who work full-time and are young adults (under 26). The Affordable Care Act also established new rights, protections, benefits, and regulations for “insurance companies, taxes, tax incentives, funding, spending, the creation of committees, education, new job development, and more,” in addition to seeking to provide health insurance to all Americans (Affordable Care Act Summary, 2014).

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The Affordable Care Act states in Title I, “Quality, Affordably-Priced Health Care for All Americans,” how it will assist people in obtaining free or inexpensive health insurance. For instance, the Act permits people to continue on their parent’s health insurance plan until age 26 (previously, it was until 19). This allows people to delay paying for their health insurance for an additional seven years, saving them money. You cannot be dropped from your policy unless you commit fraud. The Affordable Care Act also attempted to lower the cost of health care by “eliminating lifetime and unreasonable annual limits on benefits, prohibiting rescissions of health insurance policies, capping insurance company’s non-medical and administrative expenses, and by facilitating administrative simplification to lower health system costs” (Affordable Care Act Summary, 2014). The rationale behind these measures is that if insurance companies are spending less money, they can lower the cost of premiums for their clients.

Additionally, starting in January of this year (2015), employers had to provide insurance to their full-time employees. Due to the size of this expense, many businesses can deduct it from their taxes. Although offering health insurance to all employees may seem like a significant disadvantage for businesses due to the high cost, it is slightly advantageous because the company’s taxable income will be further decreased by adding another expense that may be deducted from taxes. Small enterprises with 50 or fewer employees are also qualified to apply for tax credits worth up to 50% of their employee premiums (Affordable Care Act Summary, 2014). Small firms can only deduct the sums not covered by the tax credits because they can eliminate up to half the cost of providing health insurance to employees. For instance, if a business receives tax credits that cover 46% of its premium costs, it can only deduct the remaining 54% of those expenditures.

The Affordable Care Act offers tax incentives to individuals, corporations, and businesses. The Act’s Title II describes how people can get a tax benefit. The Act states in this section that it will save “the taxpayer money by decreasing the cost of prescription drugs and payments to subsidize care for Americans who are not insured” (U.S. Department of Health and Human Services, 2015). The expansion of tax credits, as outlined in Title III, is expected to improve the healthcare system. This upgrade states, “Taxpayer monies are saved by keeping people healthier before enrolling in Medicare, lowering Medicare’s need to pay hospitals to care for uninsured patients” (Affordable Care Act Summary, 2014). Keeping people healthy does not necessarily decrease the number of sick or injured patients that Medicare pays the hospital to treat; thus, this improvement appears to be more of a theory than a reality. Much of the Act is similar to the last statement because it emphasizes preventative healthcare. However, preventative healthcare cannot guarantee that fewer people will contract a disease or require medical treatment, so in practice, there are no guaranteed tax breaks for individuals, even if it does prevent some illnesses.

The Affordable Care Act impacts tax returns for people and tax savings. For instance, the new law raises the threshold for medical expense deductions to 10% of adjusted gross income (up from 7.5%) if you itemize your returns (TaxAct, 2013). Additionally, there will be “an additional 0.9 percent Medicare tax on wages and compensation over $200,000” for people in higher tax brackets (TaxAct, 2013). It will be possible to offer Medicare for people with low AGI without making them pay the total cost by restricting this tax to those with an adjusted gross income above a specific level.

The Affordable Care Act has many benefits, such as universal healthcare and cheaper healthcare expenses, but there are also several drawbacks for those covered by the program. One significant drawback is for part-time workers who are having financial difficulties. Although the Act mandates that everyone have health insurance, their employer cannot offer medical insurance for a part-time employee. This puts many people in a difficult situation because not having insurance is against the law. Still, it is also a significant expenditure many people find difficult to afford. The fact that none of the tax breaks are guaranteed is another drawback. The system’s foundation is preventative healthcare, which should theoretically stop many diseases and illnesses. There will still be a high demand for medical treatment, translating into a high cost for the treatment, which Medicare will have to pay the hospitals for. Although this system may avoid some diseases, it cannot prevent them. In essence, this means that the people and families won’t get any tax breaks if the preventative treatment doesn’t function as intended.

The Affordable Care Act likely benefits companies and businesses the most because it gives them a sizable expense that they may deduct to lower their taxable revenue. Consider a corporation with 500 workers that contribute $100 toward the insurance premium for each worker. The business might then deduct $50,000 when it files its taxes. Imagine how much a firm with thousands of employees could write off if this example were only a small to medium-sized business. Companies benefit greatly from more significant write-offs because they can reduce their taxable income until it is as close to zero.

Although the Affordable Care Act has specific benefits and is meant to aid Americans, it also has numerous drawbacks and many unclear benefits, which prevent people from fully benefiting from tax breaks and decreased prices. The Affordable Care Act might be more effective and beneficial for many Americans if some of these issues could be resolved.

Other Related Post: Advanced health assessment of patients and populations

References

Affordable Care Act Summary. (2014). Retrieved September 16, 2015. TaxAct. (2013). Impact of the Affordable Care Act on your income taxes. Retrieved September 16, 2015.

U.S. Department of Health and Human Services. (2015). The Affordable Care Act: About the Law. Retrieved September 16, 2015.

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In 2010, the Affordable Care Act opened up the 45-year-old Medicare program to the most significant changes since its inception. Discuss the components of the Affordable Care Act that you think will positively improve healthcare outcomes and decrease costs.

The discussion must address the topic.

Rationale must be provided

400 words in your initial post by Wednesday 11:59 pm

Minimum of two scholarly references in APA format within the last five years published