ACA and Healthcare Spending
The one key area in the Affordable Care Act (ACA) requiring revision is on the affordability of ACA premiums. Different people are subjected to different tax credits. Specifically, in its current status, the ACA provides for higher premium tax credits for people of lower income than those with higher incomes. The tax credits are not available for people whose incomes fall above 400% of the poverty index (Office of the Assistant Secretary for Planning and Evaluation, 2017). This means that for the people with higher incomes, the premiums paid are relatively higher. The current tax credits are calculated based on the family income. The facility is only available for persons whose incomes range between 100 to 400% of poverty who do not qualify for the coverage by the employers (Internal Revenue Service, 2017). The tax credit also varies depending on one’s location with the people located in the rural areas receiving higher tax credits (Kaiser Family Foundation, 2017). From a personal perspective, the provision for premium tax credits should be revised.
One of the anchoring goals of the ACA is to increase the affordability and accessibility of health care for each person in the country. One approach to attaining this is through making the availability of the tax credit uniform across the board irrespective of a person’s income. Specifically, the tax credit should be a percentage of the total premium. This will ensure that everyone who is insured receives the credit. Additionally, there should be a capping of the tax credit payable based on one’s income. According to Liu and Eibner (2017), increasing the tax credit eligibility will ensure that many people take up insurance covers especially middle-income individuals aged 50 to 60. This increase in insurance coverage is implicated in increased access to care, one of the tenets of the ACA. Such is because the middle-income earners who were previously left out would be motivated to take up insurance covers under the ACA. Additionally, the tax credits should not vary based on one’s location in the country.
In implementing these changes, the government will be obligated to make changes to the ACA so that the new tax credit reforms to operationalize the new tax reforms. The proposed changes to the tax credits will be instrumental in the realization of the goals of the ACA. According to the Center for Medicare and Medicaid Services (2017), one of the major barriers to accessibility of care in the United States is the high cost of insurance premiums. For instance, many people not eligible for the premium tax credits may opt not to take up insurance covers. Based on this premise, it is indisputable that the expansion of the eligibility for the premium tax credits will lead to many people accessing health care due to increased insurance coverage. Kaiser Family Foundation (2017) reiterates that the qualification threshold for tax credits is another impeding factor in the subscription for insurance coverage. This is implicated in some people avoiding coverage altogether. Such contradicts the goals and inspirations of the ACA. Therefore, the expansion of the premium tax credits is essential in enhancing in the realization of the goals of ACA.
1. Center for Medicare and Medicaid Services. (2017). High Costs, Lack of Affordability Most Common Factors that Lead Consumers to Cancel Health Insurance Coverage. Cms.gov. Retrieved 23 September 2017, from https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2017-Press-releases-items/2017-06-12.html
2. Internal Revenue Service. (2017). Questions and Answers on the Premium Tax Credit | Internal Revenue Service. Irs.gov. Retrieved 23 September 2017, from https://www.irs.gov/affordable-care-act/individuals-and-families/questions-and-answers-on-the-premium-tax-credit
3. Kaiser Family Foundation. (2017). Explaining Health Care Reform: Questions About Health Insurance Subsidies. The Henry J. Kaiser Family Foundation. Retrieved 23 September 2017, from http://www.kff.org/health-reform/issue-brief/explaining-health-care-reform-questions-about-health/
4. Kaiser Family Foundation. (2017). How Affordable Care Act Repeal and Replace Plans Might Shift Health Insurance Tax Credits. The Henry J. Kaiser Family Foundation. Retrieved 23 September 2017, from http://www.kff.org/health-reform/issue-brief/how-affordable-care-act-repeal-and-replace-plans-might-shift-health-insurance-tax-credits/
5. Liu, J., & Eibner, C. (2017). Extending Marketplace Tax Credits Would Make Coverage More Affordable for Middle-Income Adults. Commonwealthfund.org. Retrieved 23 September 2017, from http://www.commonwealthfund.org/publications/issue-briefs/2017/jul/marketplace-tax-credit-extension
6. OFFICE OF THE ASSISTANT SECRETARY FOR PLANNING AND EVALUATION. (2017). Premium Tax Credits. ASPE. Retrieved 23 September 2017, from https://aspe.hhs.gov/report/health-plan-choice-and-premiums-2015-health-insurance-marketplace/premium-tax-credits