Issue Regarding the Affordable Care Act

The Patient Protection and Affordable Care Act (PPACA) or the Affordable Care Act (ACA) are the official names for the Obamacare Act (U.S. Department of Health and Human Services). Former President Barack Obama signed the act into law in order to improve the healthcare system. The ACA aspired to ensure that more Americans had access to high-quality, affordable health insurance, lowering Consumers’ health-care costs (U.S. Department of Health and Human Services). The act increased the quality, cost, and availability of commercial and public health insurance through the use of subsidies, insurance exchanges, regulations, and consumer protections. However, under the reign of the current president of America, the Better Care Reconciliation Act (BCRA) and the American Healthcare Act (AHCA) have been proposed to replace the ACA. The BCRA is the Senate version of the proposed bill whereas the AHCA is the house version (BBC News).

Proposed Amendments

The two proposals have been amended by both houses continually. However, the two acts differ in their stipulations as both houses keep changing them to ensure that they are enacted into laws. The ACA stipulates that big businesses should provide full-time insurance to their workers. However, both the BCRA and the AHCA propose that the big companies should not be mandated to provide insurance for their employees or a pay a fee (Mascaro).

The ACA act also recommended that all individuals who can afford a health cover plan should pay a fee for every month they fail to maintain it. The BCRA provides that persons should not be mandated to maintain their coverage. However, if any individual should get coverage that lasts more than sixty-three days, they should wait for six months after application to enroll again for the courage (Mascaro). The AHCA on the other hand also supports that individuals should not be mandated to pay a fee, but they should be charged a 30% charge for every twelve-month gap they incur in their coverage.

The ACA allowed for all essential health benefits to be covered without any annual or lifetime limits. The BCRA and the AHCA suggest that states can hold waivers on significant health benefits and reinstate annual and lifetime limits. Cost assistance in the ACA was allowed to the individuals making between 100-400 % of the poverty level, and they could access premium tax credits based on their income (U.S. Department of Health and Human Services). Those individuals making between 100-250% of the poverty level could only get out-of-pocket assistance. The AHCA, however, stipulates that tax credits should only be allowed for those making up to 600% of the poverty level. BCRA, on the other hand, provides out of pocket assistance on a monthly basis up to 2019 whereas tax credits are offered for individuals making up to 350% of the poverty level (Desolla).

The proposals have also affected the Medicaid funding. Under the ACA, Medicaid was available for all adults in the United States and the government was responsible for 90% of all the costs incurred. The AHCA proposes the funding of the Medicaid and any grants will be considered in later amendments. The BCRA suggests phasing out of the Medicaid program offered by ACA progressively over the years (Desolla). On taxes, the ACA used to tax those who profit most from healthcare. The BCRA suggests taxes should be cut from the industry whereas the AHCA proposes a 3.8% tax on high earners and most cuts from the health care industry.

The ACA provided that individuals with pre-existing conditions could not be charged more than without those. However, the older citizens would pay up to three times more than the young people. The premium pays for individuals with a similar age do not differ under this act. The BCRA suggests that older Americans can be charged up to five times more than the younger ones. It also stipulates that premium costs for a similar plan for individuals of the same age cannot differ. Although the AHCA also maintains that older people can be charged up to five times more than the younger ones, the senate feels that premium costs for similar plans for the same age can differ (Desolla).

The two proposals will change Medicare in the United States. The ACA reduced bankruptcy in hospitals and millions of citizens who could not access affordable coverage were enjoying it for the first time. However, most of the hospitals were full, and most of the people therein were struggling with costs. Both proposals given by the senate and the house will bring premium costs down for some individuals and a tax break for the wealthy such as high earners and large business owners (BBC News). However, the number of poor citizens who need to access healthcare will reduce significantly.

The Opinion of Americans

The AHCA which was suggested by the house was disliked by most of the Americans including some of the people who voted for it. Americans hoped that the Senate would come up with a more popular bill. However, most Americans feel that both proposals are only concerned about shifting money to the wealthy Americans as they force the poor people to pay more money for healthcare. As such, the Americans do not view the bills as devoted to improving health care.

However, there are four hundred families in the United States that have been identified as the wealthiest ones. The proposals given by the senate and the house will save these households an approximate of $7 million every year that they would pay as taxes (BBC News). The taxes had been implemented by the ACA to ensure that the disabled, the elderly on Medicaid insurance, pregnant women and children in special education would access health care at reduced costs. Therefore, individuals from these families feel that the proposed bills should be enacted because they will reduce the taxes that they pay to the government.

The former President of the United States also stated that he felt that the bill was not ideal in its current state. Barrack Obama used his Facebook to address the issue and said that in the event those people campaigning for the replacement of the bill should get sick, old or start their families, that bill will harm them. He encouraged the senators to take time before passing the bill by considering the real issues that are at stake. Barrack Obama advised the legislators to avoid getting into a confrontation where the Republicans just replace laws that had been passed by democrats. Therefore, just like most Americans, Barrack Obama is not happy about the bill proposed.

The governors of different states have also reacted to the bill. Governors from thirty-one states accepted the expansion of the ACA as it allowed more than eleven million people to be added to the rank of the insured. The governor of Nevada, Brian Sandoval stated that the bill proposed by the Senate would reduce coverage and as such it would negatively impact the future budgets of their states (Hartmann). Another Republican governor from Ohio, John Kasich said that the bill proposed by the Senate was not fit as it did not give the individuals dealing with mental illness, drug addiction and other chronic health problems a place to run to (Hartmann).

Medical groups such as the American Hospital Association and Academy of Pediatrics did not support the bill (Hartmann). The groups felt that the bill proposed by the Senate was not beneficial to them and to the people who rely on their services. They believed that the bill would destroy the progress they had made especially in ensuring health coverage for the poor and the children.

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The Debate in Congress

The House of Representatives has already passed their proposed bill. The senate has been embarking on making some changes to the bill suggested by the House of Representatives as most of the Americans were dissatisfied with it. However, the Senate is still in a stalemate about the proposed amendments do not appear to provide the required care to Americans. The congress is also undecided about the bill as most of them view it as a way to undo the legacy that Barrack Obama had made in the United States (Hartmann).

At the beginning of June 2017, Rand Paul, Ted Cruz, Ron Johnson and Mike Lee who are some of the most conservative Republican senators stated that they were not going to vote for the bill as it was (Hartmann). The four senators felt that the bill had not yet reduced the benefits and subsidies of the poor as much as they wanted. They declared that they were not going to vote for a bill that appeared to have more benefits for the poor as opposed to the initial one. As such, the congress is still reviewing the bill especially the senate.

Economic Impact of the Replacement of the Affordable Care Act

The replacement of the ACA will have an economic impact on the United States both in the long run and the short term. The government of the US mainly runs on a capitalist economic system where individuals own the capital. The production of goods and services is also dependent on the forces of supply and demand in the market (Miliband 12). As such, the economy is a free market where the government does not interfere with the factors of production.

Short Term Impact

Budget Deficit

The ACA aimed at providing medical care to the poor Americans by increasing benefits and subsidies. If the legislation proposed by the Congress is passed and the grants and benefits offered to these population decrease, it would reduce the deficit of the federal government. The government was incurring huge costs through reduced premiums on insurance programs and reduction of taxes paid. As such, the deficit in the budget of the country will reduce by an approximate of $40 billion annually between 2017 and 2018 (Leaf).

A government that operates with a reduced fiscal deficit has a high likelihood of growth (Bertrand 72). The economy reaches its maximum potential because the government does not depend on borrowing either from the public of foreign countries to meet the needs of its people. Moreover, a reduction in the budget deficits means that interest rates are pushed lower, and as such, the citizens opt to invest their money as opposed to spending it. The level of unemployment in the US is likely to reduce as more people open up industries, business ventures and other investments.

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Lowered Standards of Living

If the bill is enacted, an approximate of fourteen million Americans will lose their health insurance by 2018. In 2026, about 24 million Americans will have lost their health insurance (Leaf). These are poor citizens, the elderly, and children in special education and other populations who cannot afford quality healthcare without assistance from the government. The prices for premium insurance covers will increase, the subsidies and benefits will decrease. If the citizens of the country do not access basic facilities such as healthcare, then the standards of living of the people will fall.

Long Term Economic Impact

Increase in the Gap Between the Rich and the Poor

The United States is a capitalist society. If the bill is enacted, it is going to enlarge the gap between the wealthy and the poor citizens of the country. First, the taxes that were paid by high-income earners under the ACA will be cut off. Secondly, the large business owners who were required to pay medical coverage for their employees, will not be mandated by the government to provide them (Hartmann). Thirdly, the ACA ensured that persons with individual coverage received tax credits had enhanced consumer protections and a transparent marketplace where they could access the coverage.

The proposals in the bill said to be amended by the Senate, however, has reduced the financial assistance that low and middle-income individuals used to receive (Desolla). It has also raised premiums for the elderly and people with pre-existing conditions. The deductibles offered by the government and the cost sharing that was provided in the ACA will be eliminated. As such, these individuals will have more of their medical expenses from their pockets. As such, the money they could use to save or invest is reduced as they are only low and middle-income earners who can only afford the basic needs (Miliband 52). Therefore, the gap between the rich and the poor will keep increasing in the long run.

Slow Economic Growth Rate

The economy of any country thrives on the industries there in (Bertrand 69). The repeal of the ACA will affect many industries in the United States mainly the healthcare and the insurance sectors. When the ACA was initially implemented, the health care industry lost billions of money in subsidies and insurance mandates. The act brought about a shift in the healthcare sector which meant that the hospitals had to give up their old systems of health care provision. As such, a lot of money was lost during the shifting of the systems. The hospitals have just begun adjusting to the new way of doing things under the ACA when the repeal comes along. As such, the money in the sector may be taken away in another wave of a shift. The disruptions in this segment of the economy influence the rate of investments, the revenue earned by the hospitals and as such, the returns into the economy regarding government fees and taxes (Miliband 73).

The insurance companies are also another part of the economy that will be disrupted by the bill (Leaf). The ACA had changed the coverage of insurance programs especially with the introduction of the individual mandate to have medical coverage. The reduction in related medical costs led more people to seek additional insurance covers as they could now afford them. More citizens began accessing life insurance, property insurance, and even education insurance covers. However, if the bill is enacted, the number of clients seeking insurance services is likely to reduce as they will spend more of their funds in accessing health care (Bertrand 93). The disruptions in the industries that contribute to the economic growth of the country will reduce the rate at which the economy thrives.

Conclusion

The government of the United States should focus on policies that promote the economic development of the country both in the long term and short run. The policies should ensure that the economy thrives on improving the standards of living for its citizens and lower the cost of living. The government should also protect the industrial sectors that ensure the prosperity of its country by providing stability, the spread of risks and control of costs. The amendment of the Affordable Care Act will have a higher rate of adverse effect on the economy because it will adversely affect millions of Americans.

Works Cited

BBC News. Why is Obamacare so Controversial? 13 July 2017. Web. 2 August 2017.

Bertrand, Richard. Theories and Effects of Economic Growth. New York: Nova Science Publishers, 2011. Web.

Congressional Budget Office. Budgetary and Economic Effects of Repealing the Affordable Care Act. 19 June 2015. Web. 2 August 2017.

Desolla, Linda. The Difference Between Obamacare and Trumpcare. 12 June 2017. Web. 2 August 2017.

Gardner, Gail. Obamacare vs. Trumpcare: What’s The Best Solution for Small Businesses? 23 March 2017. Web. 2 August 2017.

Hartmann, Margaret. Senate’s Trumpcare Bill Still Disliked by Pretty Much Everyone. 23 June 2017. Web. 2 August 2017.

Leaf, Clifton. Trump care’s Biggest Uncertainty: It’s Economic Impact. 14 March 2017. Web. 2 August 2017.

Mascaro, Lisa. GOP’s Plan B for Obamacare- Repeal Fist, Replace First. 30 June 2017. Web. 2 August 2017.

Miliband, Ralph. The State in Capitalist Society. Delhi: AAKAR Publications, 2011. Web.

U.S. Department of Health and Human Services. About the Affordable Care Act. 3 June 2017. Web. 2 July 2017.