The Financial Impact of the Affordable Care Act (ACA) Analysis

This essay examines the financial impacts of the Affordable Care Act (ACA), focusing on Medicaid expansion. It discusses how increased Medicaid spending has improved healthcare affordability for low-income families and reduced uncompensated care costs for hospitals. However, it also notes financial losses for private insurance providers due to individuals switching to government policies and increased healthcare expenditures for those dependent on private insurance. The essay further explores how free preventive care, while beneficial, may lead to increased healthcare costs due to the treatment of previously suppressed symptoms. It concludes that while the ACA has improved accessibility and affordability, it has also presented challenges for private insurers and consumers with private insurance, potentially leading to public disinterest in the future. The analysis also considers the shift in hospital expenditures towards community health initiatives as mandated by the ACA, impacting healthcare delivery systems.

Running head: FINANCIAL IMPACT OF THE AFFORDABLE CARE ACT (ACA)
Projected Financial Impact of The Affordable Care Act (ACA)
Neda Rahimi, MHA Student
West Coast University
Course ID: 520 HA
01/27/2019

FINANCIAL IMPACT OF THE AFFORDABLE CARE ACT (ACA)
Projected Financial Impact of The Affordable Care Act (ACA)
The Affordable Care Act (ACA) was a revolutionary healthcare policy aimed to enhance the
accessibility and affordability of healthcare services (Mechanic &Olfson,2016). The following
paragraphs of the essay will examine the potential financial impacts of the ACA on Medicaid
expansion. As a result of the Medicaid expansion exerted by the ACA, the resultant Medicaid
spending led to increased healthcare service affordability for childless families as well as those
with incomes at the federal poverty level of 138% - leading to reduced healthcare expenditure by
such families. The increased financial feasibility also led to preventive care being free of cost for
numerous families; so leading to treatment of prolonged health symptoms at affordable rates
(Sommers et al., 2015).As researched by Frean, Gruber and Sommers (2017), the expansion of
Medicaid and associated spending also resulted in the reduction of uncompensated care costs on
hospitals such as charity care and debts where hospitals repeal the care expenditures or are
unable to procure payments despite billing. Hence, this estimated 40% reduction in
uncompensated care costs associated with ACA Medicaid spending resulted in greater profits for
hospitals. According to Sen and Deleire (2018), the ACA’s Medicaid expansion and spending
also resulted in financial losses for private insurance providers since most individuals switched
to governmental policies considering the noticeable tax benefits. Individuals dependent on
private insurances incurred increased healthcare expenditures since most private insurances
companies and employers repealed their insurance plans since theirs did not provide the 10
healthcare benefits available from the ACA’s policies.
According to Wherry and Miller (2016), the increased Medicaid expansion and spending
associated with the ACA resulted in free preventive care treatments which is projected to result
in increased healthcare costs and expenditures for consumers. This is due to the fact that
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FINANCIAL IMPACT OF THE AFFORDABLE CARE ACT (ACA)
accessible preventive care will now lead to more comprehensive and expensive healthcare
deliverance since health symptoms which had been suppressed for prolonged periods due to lack
of affordability, will now require high quality treatments due to possible disease aggravation. As
examined by Dranove, Gartwaite and Ody (2017), the increased hospital profits due to reduced
uncompensated care will now project changes in the deliverance of hospital healthcare services
since hospitals will now be required to redirect their expenditures towards conductance of public
health screening and community assessments a mandatory policy stated by the ACA, which will
result in federal penalties if not adhered to. The increased financial accessibility of healthcare
services for consumers due to Medicaid expansion and spending will not project changes in
terms of greater patient admissions to once expensive emergency and trauma care departments
resulting in deliverance of increased affordable and high quality trauma care services by
healthcare organizations (Joseph et al., 2016).
Conclusion
Thus, it can be concluded that, while the ACA Medicaid expansion and spending resulted
in increased affordability and accessibility, the resultant hospital profits will lead to changes in
healthcare deliverance systems in terms of community health and trauma care services.
Considering these financial impacts, it is expected that the ACA’s Medicaid expansion will result
in exemplary public health based changes due to the necessity of disseminating community
health services. However, the ACA’s Medicaid expansion detrimentally affected consumers
dependant on private and employer based insurances, as well as led to losses for private
insurance providers and rising healthcare costs, which may possibly be an area of public
disinterest in the future.
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FINANCIAL IMPACT OF THE AFFORDABLE CARE ACT (ACA)
References
Dranove, D., Gartwaite, C., &Ody, C. (2017). The Impact of the ACA Medicaid Expansion on
Hospitals' Uncompensated Care Burden and the Potential Effects of Repeal. Issue brief
(Commonwealth Fund), 12, 1-9.
Frean, M., Gruber, J., &Sommers, B. D. (2017). Premium subsidies, the mandate, and Medicaid
expansion: Coverage effects of the Affordable Care Act. Journal of Health
Economics, 53, 72-86.
Joseph, B., Haider, A. A., Azim, A., Kulvatunyou, N., Tang, A., O'keeffe, T., ... & Rhee, P.
(2016). The impact of patient protection and Affordable Care Act on trauma care: a step
in the right direction. Journal of Trauma and Acute Care Surgery, 81(3), 427-434.
Mechanic, D., &Olfson, M. (2016).The relevance of the Affordable Care Act for improving
mental health care. Annual Review of Clinical Psychology, 12, 515-542.
Sen, A. P., &DeLeire, T. (2018). How does expansion of public health insurance affect risk pools
and premiums in the market for private health insurance? Evidence from Medicaid and
the Affordable Care Act Marketplaces. Health economics, 27(12), 1877-1903.
Sommers, B. D., Gunja, M. Z., Finegold, K., &Musco, T. (2015). Changes in self-reported
insurance coverage, access to care, and health under the Affordable Care
Act. Jama, 314(4), 366-374.
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FINANCIAL IMPACT OF THE AFFORDABLE CARE ACT (ACA)
Wherry, L. R., & Miller, S. (2016). Early coverage, access, utilization, and health effects
associated with the Affordable Care Act Medicaid expansions: A quasi-experimental
study. Annals of Internal M edicine, 164(12), 795-803.
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