While the Affordable Care Act is extensively known for its expansion in coverage, it also identifies the need to include ways to reduce the increase in health care costs. One of the major ways that this act will impact Medicare is reducing the costs incurred in health care. One of the ways that the ACA is doing this is by reducing the provider payment updates and Medicare Advantage payments (Kinney, 2012). Before the implementation of ACA, payments to Medicare Advantage were approximately 14% more than the costs incurred by individuals under the initial Medicare program. The ACA lowered the payments made to Medicare Advantage over a period of six years. By 2016, costs in the Medicare Advantage were just 2% above the traditional Medicare plan.
Prior to ACA, the health care system was controlled by fee-for-service payment method. This method in most cases penalized health care facilities and organizations and professionals in this field who came up with means to offer care in a more efficient manner. The system failed to appreciate those who improve the quality of health care they provide. The ACA has changed and continue to change the health care system in a number of major ways. This law changes the costs paid to many that offer Medicare services and Medicare Advantage plans (Haider et al. , 2018). This is aimed at ensuring that the Medicare plans and services are in line with the actual and real costs of giving health care (Haider et. al , 2018). Consequently, spending on health care is most likely to go down even further than expected. For example, according to the financial projections by the Congressional Budget Office, it is projected that Medicare will spend about $160 billion less in the year 2019 alone as a result of the Affordable Care Act.
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References
Kinney, E. D. (n.d.). The Impact of the Affordable Care Act on the Medicare Program. The Affordable Care Act and Medicare in Comparative Context, 305-321. doi:10.1017/cbo9781316275245.013
Kinney, E. D. (2012). Affordable Care Act Changes in the Medicare Program: More of the Same but Better. SSRN Electronic Journal . doi:10.2139/ssrn.2170574
Haider, M., Siddiqi, K., Demir, I., & Khan, M. (2018). Impact of Affordable Care Act on Medicare Disproportionate Share Hospital (DSH) Payments. Value in Health, 21 . doi:10.1016/j.jval.2018.04.950
