The Financial Impact
The financial impact for the cost sharing reductions for patients, service providers and health insurance companies cannot be under estimated. The cost reductions play a crucial role in ensuring healthcare affordability by lowering out of pocket limits, lowering of co-insurance and co-payments. The result is a more affordable healthcare plan for millions of American low income families and individuals. The deductibles, co-payments as well as out of pocket limits increase the healthcare access for most individuals.
Firstly the plan lowers the deductibles for the drugs and healthcare services. The financial impact is huge as the amount covered by Medicaid in such a case is reduced from $3,609 to $255. Thus a patient is able to save over $3,354 for low income earners who earn fall within the eligibility plan for the Medicaid program. In addition, for the out of pocket private insurance covered individuals the plan is able to save an individual between $5,580 and $6,000 since they could have paid a whole amount of $6,528. This shows that the private healthcare insurance providers are able to have more disposable incomes which can be used for other financial obligations. The out of pocket cost reductions, the insured has an increased access to healthcare and without this plan, the vulnerable people in society’s health would be in jeopardy and premium rates increase. The result is more American families accessing increased access to healthcare and also an increase in the amount of disposable incomes.
For the healthcare service providers, the failure to allow the discounts will have a direct burden on their financial health as the federal government would cease to reimburse the healthcare providers for the provision of the insurance subsidies. The effect would be an increase in the amount of premiums from the healthcare insurance providers in order to reduce the gap deficit. Therefore, in the business sense the subsidies provide an enabling environment for the healthcare stakeholders to play their respective roles and also maintain a stable exchange environment where the premiums charges are not overcharged.
The impact for the government will also mean that if the cost sharing reductions decrease will cause it to chuck out more finances in order to fill the financial gap left. The consumer sharing reductions are supposed to be implemented based on the premium plan available. For Medicaid the silver plan is available for the Medicaid eligible Americans. In case the premiums go up for the silver plan it will also mean that the government has to pay a larger amount as a result of the higher premiums. According to the Congressional budget office, the funding for the cost reduction subsidies is likely to reach $21 billion in 2020 as compared to only $6 billion last year.