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The Cost of the Affordable Care Act

Healthcare policies aim to promote public health and quality of care through cost-effective measures that impact various aspects of clinical practice. The integral part of any healthcare policy is adequate financing supported by cost-containment or cost-control strategies. The following paper will discuss the cost of the Affordable Care Act, analyze the proposed initiatives and current cost-containment strategies, as well as the impact of healthcare financing on health outcomes and the nursing practice.

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The ACA is funded through a combination of government spending cuts and revenue from taxation. The Congressional Budget’s Office estimates that the cuts in Medicare and the Medicare Advantage payment rates might save about $700 billion by 2025 (Egstark, 2016). The policy also involves tax penalties for uninsured individuals and businesses without insurance coverage for their employees. The measure is expected to raise $43 billion from individuals and $167 billion from employers by 2025 (Egstark, 2016). In 2019, the annual cost of continuing the policy was about $1.1 trillion, including $644 billion spent on Medicare and $427 billion on Medicaid and the Children’s Health Insurance Program expenses (TPC, 2020). However, the annual cost of the policy changes depending on the amount of healthcare financing defined by Congress, as well the number of people insured using the ACA coverage options.

Cost-effectiveness and cost-control efforts are essential for the effective functioning of healthcare systems. The organizational change in the nurse/patient proportion from 8:1 to 4:1 proposed by Michael Rothberg is a cost-effective measure, leading to decreased hospital costs and mortality reduction (Mason et al., 2021). Additionally, preventive measures are viewed by policymakers as cost-effective mechanisms for controlling expenses, resource allocation, and positive health outcomes (van der Vliet, 2020). Evidence-based preventive healthcare programs are often introduced by legislators to reduce the burden of non-communicable diseases, such as cancer, diabetes, or mental illness), on the budgets of governments and healthcare systems.

The ACA is one of the most prominent healthcare regulations implemented to expand insurance coverage, improve the quality of care, and contain costs. Cost-containment strategies aim to address the increase in healthcare costs by reducing healthcare budgets or salaries, especially at the time of the fiscal crisis (Stadhouders et al., 2018). However, the ACA legislators selected a different approach, which helped to successfully prevent the increase in healthcare costs during the period of the economic downturn. Its value-improvement strategies might explain the effectiveness of the ACA cost-containment initiative based on the identification of cost-reduction opportunities. The Cadillac tax, for instance, applies to employers purchasing high-cost insurance plans for their workers (Orszag, 2016). Moreover, the policy mandates minimum benefits and value for insurance plans. Thus, the initiative encourages employers and individuals to focus on value and contribute to reducing the cost of healthcare in the US.

The example of the ACA cost-containment measures might be used to demonstrate that healthcare financing has a significant impact on nursing practice and health outcomes. Firstly, its pay-for-value approach requires healthcare facilities to rely heavily on the nurses’ proficiency, patient-focused care, and communication to support physicians in the delivery of quality care (Mason et al., 2021). Secondly, the financial transformation from pay-for-volume to pay-for-value encourages interprofessional collaboration and interdisciplinary teams working towards the quality of care and the desired health outcomes of individual patients instead of focusing on multiple admissions. Healthcare cost-effectiveness efforts might help nurses to contribute to the decrease in costs via improved decision-making, adaptation to the constant financing changes, and reducing hospital readmissions and emergency room visits. Finally, cost-control strategies might negatively impact the nursing practice and health outcomes if they involve workforce reduction or restructuring and decrease the number of nurses or work hours, affecting the efficiency of healthcare services.


Egstark (2016). How is Obamacare paid for? Money. Web.

Mason, D. J., Dickinson, E. L., Perez, A., & McLemore, M. R. (Eds.). (2021). Policy & politics in nursing and health care (8th ed.). Elsevier.

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Orszag, P. R. (2016). US health care reform: Cost containment and improvement in quality. JAMA, 316(5), 493–495. Web.

Stadhouders, N., Kruse, F., Tanke, M., Koolman, X., & Jeurissen, P. (2018). Effective healthcare cost-containment policies: A systematic review. Health Policy, 123, 71–79. Web.

TPC (2020). How much does the federal government spend on health care? Tax Policy Center. Web.

van der Vliet, N., Suijkerbuijk, A. W. M., Blaeij, A. T., Wit, G. A., Gils, P. F., Staatsen, B. A. M., Maas, R., & Polder, J. J. (2020). Ranking preventive interventions from different policy domains: What are the most cost-effective ways to improve public health? Int. J. Environ. Res. Public Health, 17(6), 1–24. Web.

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