Obamacare
Introduction
The health care system has faced numerous challenges during the past leadership regimes. Various attempts to implement strategies and policies that will enhance change in the sector have characterized the healthcare reform agenda. With president Barrack Obama taking over power from President Bush, society was optimistic that the US healthcare system would positively change. As per society’s expectations, the change was realized as president Obama signed numerous health care legislations into law (Nix, 2010). The newly enacted law originated from the senate health care bill—Patient Protection and Affordability Act—and a reconciliation bill, which played a key role to every citizen in the United States (Congressional Budget Office, 2010). Although health care legislation is always aimed at providing effective medical care across all sectors in the economy, Obamacare has been a disaster in the health care system.
Disastrous effects of Obama’s health care bill
Obamacare bill is expected to increase the federal expenditure, which will lead to a deficit in the federal government’s budgetary statement. Although the bill has been projected to reduce the cost of health care by $138billion, the financial obligations that it will have on GDP will be adverse (Foster, 2010). The assumptions articulated by the financial analysts are ill advised since the real expenditure is bound to increase the federal deficit over the next 20-years (Nix, 2010). Some of the expenditures, such as the Medicare payment rates, were omitted from the projected figures, thereby implying that the value provided would be lower than the actual expenditure. According to Nix (2010), the legislation formed was designed to increase expenditure in health care rather than addressing the core growth in amount of expenditure for the government. However, in reducing costs in the health care sector, the bill increased the health care’s expenditure by approximately $222 billion within the stipulated timeframe (Nix, 2010). Furthermore, Congressional Budget Office (CBO) has reported an increase in premiums for non-group market from 10% to 13% (Nix, 2010).
Consequently, Obamacare bill has minimized the extent of economic growth through the introduction of unnecessary taxes into the system. For instance, employers who are unable to pay insurance fee for their full-time employees will be fined $2000 by federal government, with an exemption only given for the first 30 employees (Nix, 2010). Such penalties are bound to discourage employers from hiring many employees, which will reduce the economic growth and development in the region. New tax will also be levied on investment projects thus discouraging investors from undertaking investment initiatives that will attract such taxes. The effect of this is a further slowing down of the economy (Nix, 2010).
The legislation has given the government a mandate to set rules and regulations that govern health care operations in the economy. Ideally, the central government has been mandated to set the prices that insurer will pay in the new medical bill (Fodeman, 2010). As such, it is quite detrimental to the health sector in that the new law defines a mandatory benefit package that every health plan in America must include in its system. This requirement will present challenges for the healthcare sector to realize equitable distribution of benefits and resources. By introducing competition between public health sector and private sector, the bill will also be detrimental in an environment where the private sector is expected to complement the inadequacies of the public sector (Capretta, 2010). The national health plan will be administered by the office of personnel management (OPM). OPM will make rules and regulation for the government-sponsored plans and thus will not be subject to the same rules and regulations set by the Department of Health and Human Services (DSS) (Capretta, 2010). Due to this variation in law, OPM will have unfair advantages that may arise from their plans in the insurance exchange.
Other setback with this plan is its impeding the realization of entitlement programs. Of the 32 million Americans estimated to have been insured by 2019, half of them will receive their coverage from Medicaid. Those people that depend on Medicaid normally receive unsatisfactory services, which do not meet the requirements of Americans. This includes difficulty in finding doctors to attend to them, low settlement rates and lack of emergency rooms for care. For instance, in Tennessee, the health outcomes declined leading to decrease in death rate as compared to the surrounding states (Nix, 2010).
On the other hand, reconciliation bill was also a mess in the health care sector. It has burdened the federal state’s budgetary activities. The federal government has to cover the extension of Medicaid reimbursement in all 50 states up to 2017, and decrease the matching rates from 100% to 93% (Congressional Budget Office, 2010). The reconciliation bill increases costs in various states due to change in Medicaid funding formulas. This leads to an increase in the cost of primary care providers in an attempt to meet the growing demands of Medicare. In the process of extension, there will be a provision of 100% funds by federal government (Fodeman, 2010). The provision not only solves the problem encountered by Medicaid beneficiaries but also dig the economy of state.
Although various disadvantages are attributed to the plan, the program has ensured that investors are able to invest in various projects. The lower cost of the medical care plan has facilitated an increase in the number of individuals who have been insured in the sector (Foster, 2010). In most of the developed economies, it is the work of the government to foresee the activities that are undertaken in the economy. This should be done, either through facilitating the funding process or enacting laws and regulations that govern the system. In addition, the taxation and payment of penalties is a normal arrangement in every developed economy (Capretta, 2010). Financing bulky budgetary activities requires the government to realize revenues from all forms of revenue collection, and health sector is no exception (Foster, 2010). Though it can be argued that the bill introduced has increased taxes paid by the Americans, meeting the enormous budgetary expenditure requires the public to increase their contribution to the government in the form of tax revenues. Achieving sustainable and reliable health care plan would come along with a cost. Therefore, Americans should appreciate the new bill that prompted efficient medical care in the society.
Conclusion
The health care sector has always experienced various policies and regulations that ensure purposeful transformation has been realized. Though most of the political leaders tried to enact policies that govern the health care sector, president Obama’s legislation on health care was famous. However, the bill has been disastrous in the health sector. Some of the detriments that have marred the success of the bill include increase in growth of the federal government deficit facilitated by the increase in expenditure. The bill enacted was aimed at realizing increase in expenditure of the health care sector, but the government was faced with an increase in overall expenditure in the economy. In addition, new taxes were enacted, government regulated the activities of the health care, and the state was burdened with the increased budgetary activities.
References
Capretta, J. (2010). Obamacare Will Break the Bank, Not Reduce the Deficit, The Foundry, Retrieved from <http://blog.heritage.org/2010/03/18/obamacare-will-break-the-bank-not-cut-the-deficit/>.
Congressional Budget Office (March, 2010), “H.R. 4872, Reconciliation Act of 2010,” Retrieved from <http://www.cbo.gov/ftpdocs/113xx/doc11355/hr4872.pdf>.
Fodeman, J. (2010), Bending the Curve’: What Really Drives Health Care Spending, Heritage Foundation Backgrounder No. 2369, retrieved from <http://www.heritage.org/Research/Reports/2010/02/Bending-the-Curve-What-Really-Drives-Health-Care-Spending>.
Foster, R. (2010). Estimated Financial Effects of the ‘Patient Protection and Affordable Care Act,’ as Passed by the Senate on December 24, 2009, retrieved from <http://www.cms.hhs.gov/ActuarialStudies/Downloads/S_PPACA_2010-01-08.pdf>.
Nix, K. (2010). Top 10 Disasters of Obamacare, The Heritage Foundation WebMemo No. 2848, retrieved from <http://www.heritage.org/research/reports/2010/03/top-10-disasters-of-obamacare>.
