How the Affordable Care Act Will Cut Health Spending

Now that several provisions of the Affordable Care Act have gone into effect, how will the new health care law reduce spending? The law has created several ways to stem the growth of health care spending. And millions of Americans are now attempting to sign up for health insurance on the new marketplaces, but with some issues.  

Obamacare cost-cutting: CNBC explains (CNBC)

  • Many provisions of the Affordable Care Act, which have already gone into effect, aim to reduce the growth of health care spending – about one-fifth of the overall U.S. economy
  • The Affordable Care Act will still cost the federal government $1.36 trillion over the next decade, according to the Congressional Budget Office.
  • One of the cost-cutting tools include penalizing hospitals by reducing government Medicare reimbursements to them for having an excess number of patients who are released from the hospital, but then readmitted within a month for heart attacks, heart failure and pneumonia.
  • Another measure is requiring health insurers who spend less than 80 percent of the premiums they receive to reimburse come money to those customers.
  • Insurers of large companies have to spend at least 85 percent of premiums they receive or issue refunds.
  • The health care law also created Accountable Care Organizations, which encourages hospitals, primary care physicians and other medical providers to join forces and coordinate care for their patients. And if they meet certain quality targets, they get paid more by Medicare.
  • And the Affordable Care Act's provision that insurance policies cover preventative care for customers may also reduce overall long-term health costs. The idea is if people receive preventative care, they will be less likely to suffer from chronic health conditions that might cost much more.


Obamacare site goes live, with some glitches (The Washington Post)

  • Millions of Americans signed on to government Web sites to sign up for health care on online health exchanges, which created widespread computer problems.
  • The federal web marketplace that serves more than 30 states was backed up for most of Tuesday, with people receiving error messages and experiencing delays. The experiences were also spotty in states that operated their own marketplaces.
  • About 2.8 million people visited the federal health marketplace, with an additional 81,000 dialing in to the help center. Some people enrolled in coverage, but officials declined to say how many.
  • Several states revealed their own enrollment figures with Kentucky boasting of more than 1,000 enrollees. Connecticut processed 167 applications.
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