Economic Principles and the Affordable Care Act (ACA)
Affordable Care Act was a bill made back in the year 2009 by the United States House of Representatives under the leadership of the then president of the United States of America, his Excellency, Barack Obama. It is sometimes referred to as Obamacare. The bill never became law as was initially drafted. An alternative bill called the Patient Protection and Affordable Care Act was passed on December 24, the same year. Finally, the Health Care and Education Reconciliation Act was made in the year 2010. The original goals for the Affordable Care Act were; bring down the overall cost of health care as it related to the GDP, provide health care services for the entire population, offer a full prescription drug benefit for the elderly, and expand the scope of health care services. The progress of the ACA has been so much since it was initiated a decade or so ago. The history is long, the journey through their achievements, strengths, and weaknesses. Health care is a vast field in any economy, which means that a lot of attention is inclined towards it. In our case, heated debates have been coming up on the role, successes failures, and future of the APA. The discussions have even heated overshadowed by the Covid- 19 pandemics.
In my report, I will be choosing whether to take corrective action to restore the failed system or to repair the system. This will be based on the health care economic principles that I will use to evaluate the progress.
Production is the provision of something for consideration inspection or use. ACA is a health act in which the main objective was to extend health insurance coverage to millions of uninsured Americans. Medical insurance is one of the most crucial covers that a person should consider having. Many governments nowadays have put up measures to ensure that every person has a health/ medical cover (Gaffney & McCormick, 2017). Some challenges are experienced with the process of contracting the insurance companies. A widespread problem faced is the cost of health insurance. The economy comprises the middle and low class who even strive to access some basic needs. Health insurance is a premium paid for monthly for the entire life, which becomes an excellent pinch for the average citizen. Some insurance companies mistreat customers by denying coverage to maximize their profitability. The ACA act came in to help with some of these issues. The law expanded Medicaid eligibility, created health insurance exchanges, ensured that children remain under their parents cover until the age of 26, and prevented insurance companies from denying coverage or overcharging.
With all this done, there is still a gap in the society that needs to be filled. More people are still struggling with hospital bills, and yet they are insured (Gaffney & McCormick, 2017). Most insurance companies in the economy are more into a money-making, forgetting their primary duty- medical insurance. The health field has been a perfect target for this mistreatment because everyone has to get medical attention. Covers are not offered efficiently. When the bills get high to some points, the companies drop the responsibility to their customers. The Affordable Care Act should be strengthened with strict measures for any company that does not offer maximum expectations. The rules should then be executed aggressively to act as a lesson to the rest of the companies.
Resources are the inputs that are used to create things or help in the provision of services. The level and effort of the resources’ contribution are crucial in accessing the progress of any organization in the economy. Economic resources, specifically, can be divided into human resources, non-human resources, and financial resources (Callison & Sicilian, 2018). The Affordable Care Act was formerly made back in the year 2010. So much has changed since then. The prevailing covid- 19, for instance, was an unexpected happening. The health field is not easily predictable, and that is why the act should be added on measures to be taken during such occurrences.
The act should have the government or the central bank coming in with financial resources either as free aids or even subsidized loans to the insurance companies. Insurance companies are hard hit when a disease breakout happens. The average cost of treatment of a covid- 19 treatment goes up to $1300. This is a clear indicator of how expensive treatments can be. Another problem is where clients are not insured against such occurrences (Callison & Sicilian, 2018). The weight lands heavily on the patients who may not even have the resources for treatment. The act should include a measure where the government should ensure people in case of such occurrences. In the case of incidents like disease outbreaks, there is so much going on in the insurance firms. This means that the workforce becomes more than the labor force. Thus, to reduce wastage of time, the bill should implement a way where assistants like financial analysts or better technology could be added to the firms to increase efficiency and output.
Scarcity may refer to the limited availability of a commodity that may be in demand in the market or the individual’s lack of resources to buy products. The definitions are a bit different, but ‘the lack’ is common in both cases. Most people from lower and middle-class families lack the required money to sign in for health insurance. Affordable Care Act makes smaller income families qualify for health insurance plans through premium tax credits and cost-sharing reductions (Callison & Sicilian, 2018). The best thing about this policy is that the qualified clients are exposed to a wide variety of health services for a meager fee. The services include breastfeeding, ambulatory patient services, emergency services, family planning, hospitalization, and laboratory services. They move the extra mile and offer more human services like preventive and wellness services and rehabilitative and rehabilitative services. An issue that comes up is the scarcity of insurance firms in some regions in the United States. When the firms are few, the level of competition is also relatively low. The low game brings about low-quality services. This is because they lack more pressure to work their best, which is best brought by competition. The Affordable Care Act should also consider entrepreneurs who wish to invest in the insurance field. The act should have directives for the government to offer the entrepreneurs loans directly or through funding agencies and programs, which would assist them. Another way is by creating a favorable environment like giving subsidies/incentives and tax waivers.
Opportunity cost is the cost of a foregone option less than the return on your chosen option. America ranked last in terms of health care among the industrialized nations before implementing the Affordable Care Act in 2010. A large population of 61% of the Americans remained uninsured because of the high cost of insurance. The U.S. spends the most in terms of medical services through it ranks 24th among 30 developed countries. Affordable Care Act has made a significant effort in the American health care system to provide both accessible and affordable health insurance to all Americans. Statistics show that the uninsured rate of American adults has dropped from 18 percent to 11.9 percent, which is a significant improvement (Campbell & Shore-Sheppard, 2020). For the implementation of the Affordable Care Act, so many resources have been put into place, especially the financial resources. Subsidization of insurance firms all over the country must cost billions of money annually. Time invested in the implementation of the act since it was made back in 2010 has been so much. All these resources might have been used with other projects which would realize profits and over a short period of time. The ACA has also done so much, in consideration of the number of lives that have been saved and in the effort to reduce the dependency ratio (Campbell & Shore-Sheppard, 2020). More taxes would have been collected and the subsidies would both have been used to run other errands. The resources have been lost in an effort to improve the America health standards which is one of the best progresses of the ACA.
A market is one of a composition of systems, institutions, procedures, social relations or infrastructures whereby parties engage in exchange. The first part of the Affordable Care Act enacted on March 23, 2010 and later amended by the Health Care and Education Reconciliation Act on March 30, 2010. Rising costs has become a problem of concern with the release of the Affordable Care Act (Skinner & Volpp, 2017). With the declaration that even the people with pre-existing conditions, would still get an insurance cover, insurance companies raised their premiums on those who held policies before the establishment of the law. This proves to be an advantage on one side but then it is not fair to raise the premiums on those who already had premiums. Affordable Care Act was made to help those who never had an insurance policy only so there should an initiative that should be included so as to consider the citizen who already had a cover. The initiative can be a subsidy so as to cut off the extra charge that was added onto the premiums of the pre-existing members. Furthermore a large number of (above 30 million) who had insurance plans before the implementation of the ACA lost them because they had not met the standards that were later introduced (Skinner & Volpp, 2017). This caused those citizens to re insure the policies over again which cost more, because of the presence of more services which they never needed. As much as the Affordable Care Act is trying to help people insure, they should not get in between the business of those who already have insurance covers. This puts across a risk to both the citizens and the insurance companies. The citizens might opt not to have an insurance cover which comes along with major consequences in the case of occurrence of an illness. The insurance firms on the other hand will be losing when such big numbers of people lose their insurance covers.
Efficiency implies an economic state in which every resource is optimally allocated to serve each individual or entity in best way while minimizing waste while equity refers to the concept or idea of fairness in economics, particularly in regard to taxation or welfare economics. Affordable Care Act has tried to be efficient in their service delivery but you still find them giving the public a period of two to three months for coverage during “the open enrollment” periods. Application for the ACA is a tough process (Fording & Patton, 2020). The requirements are so much which need to be proven by so much documentation for the approval. The same case applies to their websites. The websites had so many problems at first. The application becomes more complicated to the extent where they decide to drop of some measures. Health groups on the other hand offer their own guides to make enrolment easier which brings confusement. The ACA should invest in software engineers and developers to make fully functional websites that are easier to verify and log in. Some of the areas of the economy are highly taxed to provide enough funds to accommodate this program (Fording & Patton, 2020). The taxation is mostly in the health field and also the wealth tax. People who are rich are highly taxed for the accommodation as more money must be found for driving and budgeting the program. The tax rate should be reduced so as to balance the economy. The act should also tax on the medical field only and if enough funds are not realized, then the stakes on the premiums may be raised a little bit higher for balance and equity.
It has been a struggle for the Affordable Care Act to reach all the objectives. The journey has been long and rough, trying to lift the United States from the last position in terms of health care to a better position it is in currently. The overall cost of health care has been greatly brought down. Many families are now able to offer a decent health care to their families at a very affordable price. They have tried towards providing the elderly with a full prescription drug benefit. The goal is yet to be successfully met but they at least try to reduce the prescription drug prices for the seniors and closes the coverage gap known as the “donut hole” where the beneficiaries who fall under here get a discount on drugs (Callison & Sicilian, 2018). ACA have expanded the entire scope of health care services. The health care have increased the number of staff and working hours so as to cope with the increasing demand of services brought by the ACA. It has provided affordable health care to more than 20 million people with stronger Medicaid programs without discriminating the LGBT Americans. To my opinion the system only needs to be repaired. It has offered more to the Americans and a big positive difference has been realized. If some recommended changes are applied, then it is enough to make united states the best health provider in the world.
References
Campbell, A. L., & Shore-Sheppard, L. (2020). The Social, Political, and Economic Effects of the Affordable Care Act: Introduction to the Issue. RSF: The Russell Sage Foundation Journal of the Social Sciences, 6(2), 1-40.
Fording, R. C., & Patton, D. (2020). The Affordable Care Act and the Diffusion of Policy Feedback: The Case of Medicaid Work Requirements. RSF: The Russell Sage Foundation Journal of the Social Sciences, 6(2), 131-153.
Skinner, J. S., & Volpp, K. G. (2017). Replacing the Affordable Care Act: lessons from behavioral economics. Jama, 317(19), 1951-1952.
Callison, K., & Sicilian, P. (2018). Economic freedom and the affordable care act: Medicaid expansions and labor mobility by race and ethnicity. Public Finance Review, 46(2), 301-324.
Gaffney, A., & McCormick, D. (2017). The Affordable Care Act: implications for health-care equity. The Lancet, 389(10077), 1442-1452.