America has one of the most inefficient and ineffective health care system in the world as a developed nation. On average, America continuously spends more on healthcare than any other nation. Most nations spend about 10%-11% of their GDP on healthcare while America spends a whopping 17. 1%. Although our expenditure is extremely high, the quality of health is not rising at the same rate. Compared to other developed nations were are lagging behind in terms of quality and pricing of healthcare for our citizens.
As the job of the Presidential Council of Economic Advisors, we should aim to ower prices for our citizens while keeping our healthcare industry thriving. While focusing on improving our healthcare system, we should also aim to expand its current policies. As an advisor appointed by previous president Barack Obama, I am in full support of keeping and expanding the Affordable Care Act. The ACA has shown tremendous benefits for our nation in terms of having more people insured. Before the ACA there was an estimated 41 million people who lacked coverage but with the ACA there is now only 28. million people who lack coverage.
Due to its affordably and accessibility, there is an estimated 20 illion people who have gain health insurance due to the ACA. Through demand, the prices of health services would decrease, but since more people are willing to pay for lowered prices, companies are still able to make a larger profit. The Affordable Care Act also keeps the free market alive because it does not make health care but helps regulate the industry. The ACA helps expand the public health insurance programs like Medicare and Medicaid while increasing the quality of private health insurances.
In summation, the Act is good for the patient’s interaction with the healthcare industry because it regulates the competitive market. The regulation includes an employer mandate which requires businesses to provide healthcare to its employees if they have 50 or more full time employees. While it regulates the private industry, the ACA also expands its coverage of government run programs like Medicaid. Which led to more people who are low-income to be covered by health care. Due to the success of the ACA it is only logical to continue expanded its influence to all states.
Although the ACA has helped many people, there has been parts of the Act that has been controversial such as its mandate and other misconceptions. There is an individual mandate which requires ll Americans to be covered by health insurance or pay a penalty tax. The individual mandate is in place to pull in a more healthier demographic into the healthcare pool. The healthier demographic will lower the prices for health services for sick people. Sick and elderly people tend to use the most money out of the private health companies so healthy people are needed to help make a profit for the companies.
Although healthy and young people generally do not want to use their own money to keep the less fortunate, they should keep in mind that one day they will become elderly or sick and will need affordable health are. The individual mandate is necessary to keep healthcare affordable for the unwell and should not be repealed out of the act. The other mandate put in from the act is the employee mandate. This mandate states that business are required to give their employees healthcare if they have 50 or more full-time employees.
This is generally applied to big businesses but it is difficult to account for the amount of employees. This is because the amount of hours for each employees sometimes fluctuate and businesses can cut hours or people to avoid this mandate. Due to the difficulty and ineffectiveness of this mandate, I am pen to changes of this mandate. A solution to this mandate is to make an incentive to employers to offer healthcare to their employees. There is a belief that premiums will rise tremendously under the ACA in the upcoming years. Although parts of the belief is true, the premiums will rise for less than a percent of Americans.
Because of the minute amount of people affected by this, I feel like that this is not a pressing issue that should be used against the ACA. Overall, the ACA does have its issues for some people but in general it is a major help for the American public. The Affordable Care Act can be expanded ore to provide more coverage and become more effective. A problem the ACA wants to attack is the coverage gap. The coverage gap is forcing Americans, especially the elderly and the sick, to make difficult decisions about their pharmaceutical drugs.
They either have to change to a lower priced drug or are forced to pay the full price during the gap. The ACA helps this problem by offering to pay a portion of of the drug during the coverage gap. My solution to this problem is to make the coverage gap period into a transitionary period. Instead of making the patient pay full price of the drug, they are to pay 5% percent of the amount and the companies will pay 25%. This way the companies still make a profit from the patient and the patient isn’t forced to pay thousands of dollars until they reach the next expense level.
I am also open to changing these percentage amounts. Another way that the ACA can be expanded is to increase transparency between hospitals and the patients. It is atrocious that 43 states earned an “F” on a transparency report. These hospitals are failing the American public and is leading to distrust between companies and the public. Because of this huge discrepancy, it is only natural that he government steps in and regulates these states. Making it mandatory to require all hospitals to reveal a certain amount of pricing information is a goal of mine.
Companies who create high-tech medical technologies might not want to invest in America due to the regulations. That shouldn’t be an issue because people can’t even use the technology because they can’t afford it. Expanding through closing the coverage gap and regulations is most beneficial for the American public. Since my expertise is in International economics, I would like to bring knowledge about other nation’s healthcare systems and their uccess. To clarify, I am not looking to have universal healthcare for America completely but to simply have more people covered by using examples from other countries.
An example of a nation with a more successful healthcare system is our neighbor, Canada. America and Canada used to have similar expenditure on healthcare at around 7. 5% of their GDP on health care up until 1971. Since then, America’s spending on healthcare has rose exponentially while the quality of healthcare does not compare to Canada’s. One of the main reason why Canada’s health care is succeeding and why America’s system is failing the he role of federal regulation. Unlike America, Canada’s government oversees their drug distribution and marketing.
Because of the federal regulation, Canada is able to control the prices to an appropriate level for their citizens unlike America. In America, drug prices can be placed on the market without the federal government’s interference. Added along with Pharmaceutical Benefit Managers (PBMS), the federal government has no way to control the prescription drugs’ prices. On the other hand, Canada has a judicial body to determine the prices of drugs called the The Patented Medicines Prices Review Board (PMPRB). The review board is able to determine the prices of drugs to a reasonable price for the citizen.
Because of this review board, prices are able to remain at an affordable price for their citizens. America should follow suit with their neighbors and create something similar. As the CEA, we are supposed to represent our citizen’s needs and the Affordable Care Act answers our citizen’s needs. Because of the act’s successful achievements, expanding its coverage should be the logical step forward. Limiting health care coverage by making it too expensive for citizen in the interests of the businesses will only hurt our nation further.