Affordable Care Act (ACA), New Taxes | Donald Saelinger

Will ACA succeed? Will It Result In Renewed Recession?

The Affordable Care Act is now the law of the land. Its implementation has begun and will continue for the next few years. The ACA also referred to as “Obamacare” has survived much turmoil, political wrangling, state’s lawsuits, and a Supreme Court decision about constitutionality. The issue of state sponsored Medicaid programs is still far from certain, as many states are reluctant to implement such programs due to cost. Clearly there number of positive elements to the affordable care act including health insurance coverage for the vast majority of Americans, inability of insurance companies to deny coverage for pre-existing conditions, and the ability to maintain children on parents policy until age 25.

From a healthcare provider perspective, there are several major unresolved issues and questions surrounding full implementation of the Affordable Care Act. The most important issue is the financing mechanism and who will pay for it. There continues to be much concern by citizens as well as politicians with regard to the increased taxes required to pay for full implementation of the Affordable Care Act. The tax issue is complicated by the so-called “fiscal Cliff”, a package of automatic spending cuts and tax hikes that are set to start next month unless the President and Congress are able to agree on a process to stop it. The president and congressional Democrats say they want to reduce spending on entitlements including Medicare and Medicaid if the Republicans will agree to increase taxes on the highest earners. If no deal is struck, the automatic spending cuts known as sequestration will kick in. Built into the sequestration process is an automatic 2% payment cut for Medicare providers. Hospitals would bear the largest share of this of these cuts. Aside from the sequestration, physician reimbursement from Medicare is on track for a 27% reduction starting January 1, 2013. The end result would be a striking 29 to 30% reduction reimbursement. Such reductions may result in a catastrophic physician access problem for American seniors...Read more