More than 45 million Americans are uninsured. Even those that do have health insurance often face financial and other barriers when getting healthcare. The Affordable Care Act (ACA) removes most of these financial barriers (Kocher, Emanuel, & DeParle, 2010). The ACA guarantees access to healthcare and creates new incentives to change clinical practice, but some might be surprised to learn that the financial price tag attached goes beyond healthcare costs and taxes which all Americans will pay for costs associated with the ACA are passed (Unknown, 2012). Differences in How Organizations are Impacted
No matter if a corporation is for profit or not for profit the new Affordable Care Act (ACA) will have a significant impact. From the employers’ perspective, the ACA has provisions that mandated the expansion of dependent coverage and removed the lifetime dollar limits on overall benefits in 2010. All employers, either profit or not for profit, are subject to this play or pay requirement in the ACA that begins in 2014 and business’ that have 50 or more employees will no longer be able to develop health benefits coverage for their employees that keep their costs down (Wojcik, 2013).
Employers have to start looking at the health insurance plans they offer to see if the plans stand the test in order to avoid penalties. Under the ACA, the plans offered by employers have to be comprehensive and affordable. Additionally, the plan defines full time employee for the purpose of this provision and the determinations based on how often, how long and how consistently the employee works 30 hours or more. The method includes a look back measurement period of three months to one year and average the hours to determine if the employer has to provide health insurance coverage (Wojcik, 2013).
January 1, 2011, the ACA imposed an annual fee on prescription drug companies. Additionally, January 1, 2014, the same fees will be imposed on insurance companies based on their market share which in most cases, both, passed on to consumers. This is the impact to consumer’s plus the added Medicare tax of 0. 9% on wages and a 3. 8% tax on investment income that is not adjusted for inflation which will affect more and more consumers each year (Kasprak, 2013).
The Perspectives and Responsibilities of the Financial Management Staff At the local level, the responsibilities of the financial management staff will be determining the amount of capital needed for the information technology tools for the organization to be functional under the new ACA. The removal of the administrative overhead and claims processing streamlined decreasing the need for staff to fill out forms for insurance companies.
Additionally, the provider can electronically verify how much the insurance company will pay and what the patients out of pocket expense will be for treatments and services (Kocher et al. 2010). At the national level, the financial perspectives are for the ACA to cost over $800 billion over the next decade and $500 billion in tax cuts elsewhere, and $400 billion in new taxes (Kasprak, n. d. ). The ACA contains tax provisions to pay for the plan that went into effect with the filing of 2012 income taxes and implementation of more over the next several years (Internal Revenue Service, 2013). More than 45 million Americans are uninsured, and experience increased morbidity and mortality, and the ACA guarantees access to health care for all Americans (Kocher et al. , 2010).
However, American’s are not getting this healthcare coverage at no costs. The insurance companies and prescription drug manufacturers are being charged an annual fee in which the costs will most likely be passed on to American businesses and citizens. These costs are almost $12 billion that will increase to $18. 5 billion by 2018 (Manchikanti, Caraway, Parr, Fellows, & Hirsch, 2011). Other costs are the January 1, 2013, increase in the Medicare tax rates by 0. 9% for a single wage earners with incomes over $200,000 or married over $250,000 which are part of the new taxes enacted to help support the ACA (Manchikanti et al. 2011).
However, the economic and jobs stimulus tax cuts enacted in 2010 expired at the end of 2012, and all wage earners Medicare tax rates increased from 4. 2% to 6. 2% to help pay for the ACA (Miller, 2012). Basic Rules and Regulations the Financial Manager Must Address While the United States has some of the best doctors and healthcare facilities in the world we fail at being efficient and effective. Currently there are too many unplanned readmissions, medication errors and hospital acquired infections.
The United States health system does not effectively provide preventive medicine for individuals with chronic diseases, and this portion of health care consumers account for the majority of health care costs (Kocher et al. , 2010). The basic rules and regulations the financial manager must address are the steps of the ACA in controlling costs as private insurers must demonstrate through the financial accounting process that 80% or more of the premiums received from individual and small group markets is devoted to clinical services and activities to improve health care quality.
Additionally, 85% of premiums received from large group markets must be spent on medical care and quality improvement (Jacobs, 2011). The economic resources received in the way of premiums paid will go into economic obligations for the mandated rebates to the insured customers when the mandated 80 to 85% is not utilized as mandated. Conclusion Despite these mandates in the ACA, there will still be around 21 million uninsured Americans by 2019. The estimated $2. 7 trillion expense for full implementation will add $352 billion to the national debt.
The ACA will increase taxes by more than $669 billion and put the burden on American businesses. Therefore, American businesses with 50 or more employees will need to review their income statements or statement of operations summary of their revenues and expenses extremely closely to determine if the new increases in costs for providing mandated health insurance coverage is worth the price of continuing to do business in the United States. Sadly growth of the American economy will be decreased as a result. The costs of the ACA might be so expensive that American will not be able to afford the ACA (Manchikanti et al. , 2011).
January 9, 2018
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