The Affordable Care Act Part IX: Follow the Money

[TexasTowelie]

By Dr. Brian Carr
President, Behavioral Health Associates, Lubbock, Texas, 1991-Present
Chairman, City of Lubbock Board of Health, 2013
Submitted on September 13, 2013 - 8:06am

The primary cost of the ACA falls into two areas. The first is the expansion of Medicaid while the second is the creation and regulation of the Health Insurance Exchanges. Taken together, these two planks constitute 84 percent of the cost of the ACA (or about 900 billion dollars) with the exchanges costing 465 billion and the expansion of Medicaid costing another 434 billion.

Where does the money for the ACA come from?

In order to pay for the ACA funding comes from Medicare spending cuts, followed by an assortment of new taxes and fees imposed across the board, particularly among those higher-income earning citizens.

New fees on pharmaceutical and health insurance industries will generate about 9 percent of the ACA revenue over the next decade. While these industries will bear a financial cost of the ACA there are significant off-sets by increased participation and premiums collected. Because of the addition of 30 million to their rolls the health insurance carriers financial gains will more than offset the 107 billion they have agreed to pay the government.

65 billion will come from fines imposed on Americans who do not get health insurance or employers who do not offer coverage to their employees. This will pay about 5 percent of the ACA cost over the next decade.

Taxes on Cadillac health plans will generate 32 billion or about 3 percent of the ACA funding during its two years of operation in 2019 and 2020

Steps to Take as January 2014 Approaches

*Check your eligibility for services by going to the health exchange web site. For states like Texas (where our governor has refused to cooperate with the federal government in rolling out the exchanges) the health exchange will be maintained by the federal government. This exchange is already set up and you should review it here.

If you are in one of the 40 or more states that will expand their Medicaid enrollment in 2014 then you might be able to sign up for the program at that time. Under the new law if you earn less than 133 percent of the federal poverty level (that’s $29,327 for a family of four in 2010) you will be able to enroll.

*If you presently have insurance coverage (and 84 percent of Americans do) you won’t have to pay any penalty because you comply with the law.

*If you are among the much smaller group of Americans who don’t have health insurance (16 percent of the population, including illegal aliens), you could still be eligible for Medicaid or subsidized coverage through your state’s insurance exchange.

*Get Approved Preventative tests without being charged co-pays. Go to http://epss.ahrq.gov to see whether the preventive test you need is recommended. If it is, your insurance plan must pay for it without charging you a co-pay.

*If you presently are enrolled in one of the Medicare Advantage programs you may need to begin to consider alternatives.

*If your income is at least $200,000 annually ($250,000 if for a couple) then you should consult with your accountant as to how best prepare for the shift in taxes that will occur under the new law.

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http://lubbockonline.com/interact/blog-post/dr-brian-carr/2013-09-13/affordable-care-act-part-viii-follow-money

Cross-posted in Good Reads forum.

[font color=green]This is actually the ninth installment provided by Dr. Carr although the headline in the Lubbock Avalanche-Journal shows Part VIII. [/font]