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The Development Of Sustainable Health Care System - Essay Example

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The development of sustainable health care system that provides optimum coverage is an issue that faces many nations and one which no solution has perfectly addressed…
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The Development Of Sustainable Health Care System
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The development of sustainable health care system that provides optimum coverage is an issue that faces many nations and one which no solution has perfectly addressed. In the US, the 2010 Affordable Care Act had both positive and negative ramifications for those seeking healthcare as well as businesses and healthcare providers. One of the prominent points of the act was the institution of a tax credit for small businesses and tax-exempt organizations by providing insurance to workers, particularly at targeting low to mid level wage employees. By observing what the act is and what it contains, the impact of this tax credit on businesses and employees, and the response of healthcare providers, one can establish that this aspect of the act has been a step in the right direction; however, the evaluating effectiveness of the overall 2010 Affordable Care Act involves must more thorough analysis. The essence of this aspect is that small businesses and non-profit employers that traditionally may not have been able to afford to offer health care to their employees, will be encouraged to offer health insurance by refundable tax credits. The goal of the act, according to Representative Ryan's "Roadmap" is to “establish a universal health insurance coverage program through refundable tax credits,” thereby encouraging health coverage without added to the alarmingly fast growing federal debt (Capretta 1). According to the U.S. Internal Revenue service, the act will refund 35% of small businesses with 25 or fewer full-time employees paying wages less than $50,000 per year per employee and 25% non-profit employer’s insurance premiums, with percentage refunds moving to 50% and 35%, respectively, by 2014. The formula is based on FTE, not number of employees strictly, so many larger employees may actually also benefit from the bill as part of their general business credit (IRS IR-2010-38). general business credit starting with the 2010 income tax return they file in 2011. For tax-exempt employers, the IRS will provide further information on how to claim the credit. Small businesses and non-profits are benefited by increased opportunities to provide healthcare, which helps the employee and may play a part in a benefits package that increases a small business’s ability to retain employees. This is especially important as the small business’s account for an increasing portion of the gross nation product, producing over $13 trillion dollars in recent quarter in the U.S (SBA 1). Unfortunately, the reality of the dramatic changes—and ongoing controversy in healthcare reform—is that many small businesses are uncertain, reluctant to sign into long-term contracts for healthcare when the system may change. American Express Open Small Business Monitor’s twice a year survey showed a drop in the amount of small businesses that were offering health insurance to employees, dropping from 66% in March of 2009 to 45% in September 2010 (Shane 1). In addition, health insurance premiums for business which were expected to drop rose 4.3% in 2010, dramatically higher than the 2.5% percent increase experts predicted the month before the act passed (Shane 1). This portion of the act has minimal effect on the healthcare providers, though some may show increased insured low-wage patients, resulting in lower payments as insurance commonly pays lower amounts than government sponsored healthcare. As noted in a review, “The issue of how to best compensate health care professionals is relevant,” as the quality of funding, including physician and healthcare worker wages, play a role in quality healthcare and encouraging students to enter the field (Sloan and Kasper vii-viii). This part of the act can be considered successful because it minimally impacts healthcare providers. While the employer tax credit may have been a step in the right direction for healthcare reform, continued uncertainty has made the reality of the 2010 Affordable Care Act rather dismal in its promise to encourage small businesses to provide healthcare. In order for these measures to have a positive impact, building public confidence in healthcare reform may be the first step. Works Cited Sloan, Frank and Kasper, Hirschel. Incentives and Choice in Health Care. Boston, MA: MIT Press. Accessed 13 Sept. 2007. Web. 28 April 2011. ‹http://mitpress.mit.edu/catalog/item/default.asp?ttype=2&tid=11508› Capretta, James. “Why the Obama Health Plan Is Not Entitlement Reform”. Ethics and Public Policy Center. Accessed Online 25 April 2011. IRS. “New for 2010: Tax Credit Helps Small Employers Provide Health Insurance Coverage”. Internal Revenue Service. Accessed 25 April 2011. SBA. “Quarterly Indications: Second Quarter 2010”. SBA Office of Advocacy. Accessed 25 April 2011 Shane, Scott. "Small Business Isn't Celebrating Health-Care Reform." BusinessWeek. 25 April 2011 Read More
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