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Reduced Cost-Sharing

A fancy set of words for "government subsidies".

With Section 1402 of the Affordable Care Act,
here's what's scheduled to occur with our tax dollars
to help millions of Americans pay
for health insurance company bills:

The IRS will communicate income data to HHS.
Subsidy money will flow directly to health insurance companies.


Reduced Costs for Some   vs.   Reduced Costs for All

REDUCED FOR SOME. The Affordable Care Act’s Section 1402 is titled “Reduced Cost-Sharing …”. Section 1402 defines that the federal government will directly pay health insurance companies for part of the out-of-pocket health care costs of those Americans whose income is defined as too low to pay for the full cost. The eligibility for and amount of such payments depends on a combination of household income and family size.

REDUCED FOR ALL. Single-payer health care, improved Medicare for All, will be such an efficient way to pay for health care that Americans will simply get health care when they show their health care card.


Reduced Costs for Some:
Affordable Care Act of 2010 Section 1402

Reduced Costs for All:
Improved Medicare for All
  1. Many Americans get new benefits. Many Americans benefit from the law due to regulations placed on health insurance companies. Those regulations must be enforced by our increased taxes by paying for more government regulators to enforce the law.
  2. We pay rising costs to health insurance companies. Health insurance companies raise the costs for all of us due to the burden places on them by the regulations.
  3. The IRS shares our data. The IRS communicates incomes and our family size to the HHS.
  4. HHS determines of eligibility. Using the IRS data, the HHS determines our eligibility for having the federal government pay for part of our costs.
  5. HHS receives customer relationship data. The HHS will be notified which of us are customers among each of the 1300+ health insurance companies.
  6. HHS shares our eligibility data. HHS shares our eligibility information with the health insurance companies, so that the companies know the limits of how much the federal government specifies as our responsibility for paying the costs.
  7. Insurance companies limit our cost-sharing. The health insurance company charges us only what the federal government says we should pay.
  8. Insurance companies share the amount we did not pay. The health insurance company notify HHS of what was not paid.
  9. HHS pays the remaining costs. HHS makes periodic and timely (prompt) payments to the health insurance companies, which pay the health care providers, such as physicians and hospitals.
  10. We pay the rising taxes.

HHS = Health and Human Services, the federal government department with primary responsibility for the Affordable Care Act of 2010. “Secretary”, meaning Secretary of HHS, occurs over 3,260 times in the law.

  1. All Americans get medically-necessary care. All Americans are eligible automatically. We will show our card and get care. There will be no cost at the time and place where health care is provided. Some people might call it "pre-paid health care", pre-paid by all citizens who can afford to contribute into our one health care fund.
  2. We will fund an efficient health care for all system where bills are paid by our “single-payer”. One of the multiple funding sources will be the payroll tax, which is already in place and for which we already pay 1.45% of our earned income. That will go up by a few percent, a far lower cost than the current system. Due to very high efficiency we will have no major medical bills.
  3. The single-payer will pay the health care providers, such as physicians and hospitals.

  4. Out-of-pocket costs will be low, so there will be no need for Section 1402 of the Affordable Health Care Act, and there will be no need for the associated long list of activities, including the sharing of our personal information to more parts of the government and to health insurance companies.

The IRS will not need to share our income and family size with Health and Human Services (HHS).

HHS will not make any payments to health insurance companies.

    See Additional Information for more about this positive change that we need to make happen within the United States.







More about the Affordable Care Act and Improved Medicare for All



Affordable Care Act Complexity as a Small Image
Click here for larger image.

For a printable version
click here (pdf).




Improved Medicare for All Simplicity
(click for larger image)

For a printable version
click here (pdf).


Total Impact of Affordable Care Act of 2010.


    The U.S. total costs will increase:
    over $300 billion more over 10 years

Total Impact of Medicare for All.

    The U.S. total costs will decrease:
    over $400 billion less per year over 10 years: $4 trillion.









Excerpts of Section 1402
Affordable Care Act of 2010

The law as written (in quotes) for reduction in cost sharing via the Affordable Care Act of 2010 As as written at Section 1402: pages 113 through 115.
Explanations are in italics.

(a)(1) “… Secretary shall notify the issuer …”

The Health and Human Services department (the “Secretary”) learns our incomes and family sizes from the IRS, determines our eligibility for federal government support and informs the health insurance companies the eligibility status of all its customers.

(a)(2) “… the issuer shall reduce the cost-sharing”

The health insurance company only charges its policy-holders what the government specifies.

(c)(1) and (c)(2):

*These parts of Section 1402 define the percentages that Americans are to pay, based on their amount of household income and their family size.

(c)(3): “METHODS FOR REDUCING COST-SHARING … An issuer of a qualified health plan making reductions under this subsection shall notify the Secretary of such reductions and the Secretary shall make periodic and timely payments to the issuer equal to the value of the reductions.”

Bolding was added.


Additional Information

Voice of Experience

Learn what the Republican Attorney General of Louisiana thinks of subsidy money flowing directly to health insurance companies.

Source for Section 1402:

ACA Section 1402 includes explanations and comments.

Section 1402 within the complete law. Pages 113 through 115 in the consolidated document of the law: 907 page document (pdf): “Ppaca&Hcera; Public Laws 111-148&111-152: Consolidated Print”.
      If you have any difficulty accessing a pdf file, please go here.

Details by income and size of family. See ACA Section 1402

Out-of-pocket: health insurance premiums, co-payments, deductibles, and coinsurance are examples of out-of-pocket costs.

Complexity of the Affordable Care Act of 2010; that web page provides the source location for the flow chart of the Affordable Care Act of 2010.

Costs: unbelievably high health insurance costs. What happened when regulations were added in the state of New York.

Improved Efficiency is a feature of Improved Medicare for All due to the elimination of unnecessary administrative costs among three types of bureaucracy related to health care in the United States.

Testimonials of Americans living and working in many other free-market countries know that there will be no major medical bills.

See Wendell Potter for more about the expectations that the Affordable Care Act of 2010 will be improved by the U.S. Congress to make it even better for the benefit of the health insurance companies.

The information at this web page is just one part of the burdens of the Affordable Care Act of 2010, which needs to be replaced with the maximum efficiency and benefits of Improved Medicare for All.



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