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The enactment of the Affordable Care Act is important in improving universal healthcare because it provides people of low income the opportunity to access quality healthcare services just like the working class. However, in attempting to achieve this, the GDP growth rate is likely to reduce leading to high inflation rates. This is why the government must take adequate measures as spending in healthcare is increased to help deal with these negative outcomes that are likely to jeopardize the country’s economy. The United States of America has experienced increased healthcare costs for several years which has forced the government to pump a lot of money into the healthcare sector. This has indeed forced the government to increase taxes and also tighten laws to maximize revenue collection. However, persistent increases in healthcare spending are harmful to the country’s economy and if not addressed adequately will lead to neglect of other basic needs like security. This paper will discuss in detail the case at hand, the major players involved in it, and the outcome of the case.
Reaching the year 2014, 18% of US GDP had been spent on healthcare services. During this time the cost of healthcare services went high making it unaffordable to low-income individuals. The number of people who cannot afford the rising cost of healthcare is projected to increase in case remedial actions are not taken (Haeder). However, the enactment of the Affordable Care Act is seen as the main remedy for this problem. The US economists argue that lowering the cost of healthcare is, however, unsustainable for the country and if not implemented properly would lead to over-borrowing to raise funds for healthcare services. The increasing spending on healthcare is only sustainable if it results in an absolute decrease in per capita GDP.
The rising cost of healthcare has impacted the US economy in several ways. Healthcare expenditures have been higher than GDP growth over the years in the United States of America. This has indeed raised several concerns among the country’s economists who think it will adversely affect the country’s economy if not addressed in good time. The biggest concern is that overspending on healthcare is likely to adversely affect the country’s economic indicators such as employment, inflation, and per capita GDP (Haeder). For example, if the government is forced to increase taxes being charged on various businesses to raise money for the provision of health insurance and improve health services across the country, this is likely to force some businesses to close down thus leading to unemployment. Moreover, the increased spending on healthcare will force the government to increase borrowing to raise money for such services thus leading to the rapid rate of inflation.
To solve these problems, Congress has passed the Affordable Healthcare Act aiming at ensuring that the cost of healthcare becomes affordable for the lower income individuals. The private sector has been the most affected in terms of growing expenditures in healthcare. This is so because employer-sponsored healthcare is the majority in the US (Andersen). This sector attracts several employers because income and payroll taxes do not apply in this case. Therefore, an increase in healthcare spending will erode profits gained by these private individuals in the provision of healthcare services. Also, employers who are faced with increased healthcare premiums are likely to lay off some workers to maintain profits. However, rising healthcare spending might not adversely affect employers if their employees bear incidences of such rising costs (Haeder). In case, the employers are the ones that bear incidences of high healthcare costs then their profits will reduce thus forcing them to cut employment. In addition, an increase in health insurance premiums will result in a reduction of employees while at the same time leading to an increase in working hours. For example, the increase in health insurance premiums during the 1980s led to a 3% increase in working hours (Ory). This increase in working hours is because health insurance premiums are fixed cost thus compelling employers to increase working hours to compensate for the cost.
The rising cost of healthcare will also lead to high prices of basic commodities such as foodstuffs, clothing, housing, etc. As stated earlier, the government usually increases taxes on businesses and companies to raise money for the provision of healthcare services. This is harmful to the country’s economy because it leads to an increase in manufacturing costs which ultimately makes those firms increase the prices of basic products.
The major political parties involved are the Democratic and the Republican parties. An unexpected move by the Trump organization to strike down the Affordable Care Act pushed the divided fight over human services into the center of the 2020 battle on Tuesday, giving Democrats a potential political blessing on an issue that harmed Republicans seriously a year ago in midterm races (Andersen). In another court recording, the Justice Department contended that the ACA, otherwise called Obama care, ought to be tossed out completely, including arrangements securing a great many Americans with previous well-being conditions and enabling youthful grown-ups to remain on their folks’ social insurance plans. President Trump commended the move amid a lunch with Senate Republicans and proposed the GOP should grasp another congressional fight over medicinal services arrangement in front of the 2020 decisions.
Republican legislators offered varying reactions to the organization’s new court recording, however, none offered help for tossing out all of Obama care without a prepared substitution for its most well-known components. Some Republican congresspersons made light of the possibility that the 2010 human services law was quickly in danger and said they would work to ensure those with prior conditions would be secured regardless (Healthcare.gov). The destiny of Obamacare depended on the Supreme Court, which has introduced two moderate judges since it cast a ballot to maintain the milestone medicinal services law in 2012.
The elements of ACA have been generally judged as positive by Americans and these elements need to be retained. Particularly, replacement or reform legislation-whichever phrase is favored-need to continue with:
- Prohibition of insurance firms from charging higher premiums or denying coverage due to pre-existing circumstances.
- Prohibition of lifetime restraints or limits for healthcare costs.
- Prohibition of “rescission “coverage for reporting on the application of immaterial inaccuracies.
- Allowing parents to include their respective children on their respective policies till age twenty-six, requires simplified and standardized enrollment as well as paperwork for health insurance.
Nonetheless, the policymakers have to comprehend the prerequisites of such gains/benefits. Specifically, pure voluntary health insurance enrollment in the absence of discriminating against pre-existing circumstances/conditions might encourage the healthy ones to refute the contribution to a risk pool till they fall sick. This shall culminate in an insurance “death spiral” whereby the cost of premiums will increase since the healthy stop paying premiums (Healthcare.gov). They will then inspire additional healthy people to refute the enrollment and increase the premium even further. Consequently, the following recommendations or suggestions for ACA changes are selected to spread the benefits and costs in a market-focused, sustainable manner.
Kate M. Bundorf, an associate professor of health research and policy at the Stanford School of Medicine, has researched healthy policy and healthcare systems’ economics. She claims that the Affordable Care Act increased health insurance coverage dramatically and this worked. About 13 million fewer uninsured individuals in the year 2015 as compared to the 2013 statistics. Obama Care further surged health insurance government expenditure since most novel enrollees got subsidized coverage, via Medicaid or exchanges. She highlights the controversy existing about whether Obama Care did or would slow healthcare expenditure’s growth rate. Her take was that whereas a slowdown in per capita spending growth was observed around the ACA’s implementation period, it is never precise that a dramatic increase in health insurance coverage was propelled by ACA provision. Indeed the Affordable Care Act has significantly assisted with the decrease in the number of uninsured Americans without neatly 20 million more Americans receiving health coverage since the ACA passage back in the year 2010.
The Affordable Care Act was put in place to ensure that all Americans receive the same quality care and plans without any type of bias criteria. Also, it is helping people who could not afford plans by having the healthcare market placed which is fair and equal. Even though the plan may have its benefits and drawbacks it is still going in the right direction to help millions of people who need the insurance coverage without any block or limitations.
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