Cost Containment - Medicare

Introduction

On March 23, 2010, the Patient Protection and Affordable Care Act (hereafter referred to as Affordable Care Act-ACA) was signed into law by President Obama. This comprehensive health reform law will bring about significant changes in the health system. This overview focuses on one of the main components of the law—cost containment.

Overview of the Policy Change

With respect to prices, the law requires states to review premium rate requests by insurers to identify excessive or unreasonable premium increases. Starting in 2011, insurers will also be required to spend a certain portion of premium dollars on patient care, as opposed ...