ObamaCare; The Great Debate

Posted on the 8th July 2015 by Sumeeta, Communications Coordinator

Aca

“My view is that health care reform should be guided by a simple principle: Fix what's broken and build on what works. And that's what we intend to do." – President Barack Obama

What is ObamaCare?
ObamaCare is formally known as Patient Protection and Affordable Care Act (PPACA) or Affordable Care Act (ACA) for short; the brainchild of the President of the United States in 2010. It aims to give a higher number of Americans the access to affordable, quality health insurance and also to reduce the growth in US health care spending via consumer protections, regulations, subsidies, taxes and other reforms.

From the forefront, although ObamaCare has been seen to be a great idea by many, it has not escaped the ridicule of many. The question to ponder upon would be, why would there even be conflicting views to a healthcare reform that could possibly generate a positive externality for the people of the United States?

It would be important to first understand the reforms that have been proposed by this initiative prior to looking at the opposing views by many prominent figures.

So..what exactly are some of these new reforms?

  • Letting young adults stay on their parents’ plan until 26
  • Stopping insurance companies from denying you coverage or charging you more based on health status
  • Stopping insurance companies from dropping you when you are sick or if you make an honest mistake on your application
  • Preventing gender discrimination
  • Expanding coverage to tens of millions by subsidizing health insurance costs through the Health Insurance Marketplaces (HealthCare.Gov and the state-run Marketplaces)
  • Expanding Medicaid to millions in states that chose to expand the program
  • Providing tax breaks to small businesses
  • Requiring large businesses to insure employees
  • Requiring all insurers to cover people with pre-existing conditions

The reforms, though very comprehensive, at a first glance, may appear to certain social groups as a huge benefit, while on the other extreme, another group may view the same as a huge cost to the society. They seem to be more complex than they appear, and as with most policies and reforms enforced by the government, ObamaCare too, has its own pros and cons. However, the more fundamental question is whether these pros outweigh the cons, or vice versa.

What are some of the benefits of ObamaCare?

New Healthcare Benefits
Some of the benefits do include the approval of the FDA to more generic drugs, which in return would drive down prices and break down monopoly power, which possibly exists. Besides, it also thwarts discrimination against domestic violence abuse victims, disabled people. It also focuses on protection against gender discrimination.

Quality over Quantity
The new Affordable Act mainly comprises of a system that focuses on quality instead of quantity. The focus on Quality in its literal meaning translates to getting excellent patient care that improves the health of the patient overall and further, progresses the quality of life mirroring the medical standards of the nation. This is the result of the competitive and fully regulated environment that has been created by the system.

Medicaid Expansion
Low-income American citizens would find ObamaCare very beneficial in states that expanded the Medicaid eligibility. This expansion will cover over 15 million previously uninsured low-income individuals and families below the 138% FLP mark. However, if states do opt out of ObamaCare, this leaves 5.7 million people out of coverage. Some propose that, opting out of ObamaCare may seem to be politically driven rather than by budgetary issues.

“And fifth, we will champion small businesses, America’s engine of job growth. That means reducing taxes on business, not raising them. It means simplifying and modernizing the regulations that hurt small business the most. And it means that we must rein in the skyrocketing cost of healthcare by repealing and replacing Obamacare.”- Mitt Romney

What are the drawbacks of this Act?

ObamaCare Cost
The biggest conundrum of this Act would be the management of the cost of the programme, which is projected to cost $1.36 trillion over the next ten years. Source of funding would mainly comprise both the taxpayers and the States. However, it is important to note that the end result of this huge spending is a $200 billion reduction of the deficit over the next decade. To top this the States are not self funding ObamaCare related programmes entirely as they are almost fully financially supported (90 - 100%). Studies done by some States, and to name some, Nevada and Michigan, have shown savings of billions via ObamaCare.

Taxes
One of the implications of ObamaCare is directed towards the top 2% of the American businesses and individuals where they bear a higher burden of tax. To gain these extra funds to support and help insure the huge increase by millions, the only source would be by the introduction of new taxes, which are directed mainly towards high income earners healthcare industry and huge conglomerates. The taxes that may affect the society and businesses would be the individual mandate and employer mandate.

Religious Beliefs
One of the most controversial issues in the women’s health services is the use of contraception. This has been brought forward in the political scene despite the exception built into the law regarding the provision of these services based on religious grounds.

WES Looking Ahead
Based on the pros and cons listed, ObamaCare should be dealt with carefully as this may bring about huge cost to the society if not handled well. Government should ensure the feasibility and sustainability of the programme in order to reap full benefits. Affordable Care Act is still at its infant stage; hence, time is the only factor that would determine the future of America in the healthcare industry.

By Sumeeta Ganesan, WES 2016 Communications Coordinator

Reference : http://obamacarefacts.com/obamacare-facts/

Comments

Add a comment

Copyright © Warwick Economics Summit 2018.
Designed and Developed by Gareth Cork & Alasdair Thomason.
Terms and Conditions | Privacy Policy