Funding the Rising Cost of the US Health Care - Assignment Example

Funding the Rising Cost of U.S Health Care Introduction The main purpose of the assignment is to critically analyze different ways of financing in the current healthcare sector of the US and accordingly, evaluate its impact on each individual receiving different healthcare services. Subsequently, comparing of two major areas of the US economy influenced by the newly developed Affordable Health Care Act (ACA) is discussed. An in-depth understanding through analyzing the pros and cons of using private insurance and new affordable health insurance system are also considered in the discussion along with the costs associated with implementing ACA and its impact on different demographic groups. Brief Overview of the Current Rising Healthcare Cost in the US and Its Impact The healthcare delivery system of the US has been voluntarily involved in response to the considerations regarding the accessibility, quality, along with cost of the health insurance services (Jones & Bartlett Publishers LLC, 2008). However, the continuous rising of healthcare costs has long been witnessed by the demographic groups can be regarded as a phenomenal concern of the country. Accessibility to the healthcare services has long been recognized as a key issue in the US healthcare system. Both the government and non-government insurance agencies are recognized to focus on developing their offerings in order to accomplish a significant growth for their institutions. The consolidation amidst the health insurance service providers in the nation, have been raising issues associated with accessibility due to their unabatedly increasing price and availability of quality based service facilities (Kaiser Family Foundation, 2014). The following figure details about the overall health insurance coverage of the total US population. Fig: Health Insurance Coverage of the Total Population Source: (Kaiser Family Foundation, 2014) With regard to the above statistics, it is affirmed that the healthcare sector of the US has been undergoing an unsustainable condition due to the rising cost of healthcare services provided by both public and private health insurance institutions (U.S. National Library of Medicine, 2013; Shi, 2012). Medicare services provided by the institutions are likely to involve higher pricing strategies that often raise major issues for the population with minimum or considerably less income level. The Census Bureau in the year 2011 reported that more than 36% of US households living below poverty line were not insured. With reference to the total spending on healthcare and its insurance beneficiaries, the US spends approximately USD 2 trillion every year that can be apparently identified to be higher than other countries of the world (Wilper et al., 2009). Compare and Contrast of the Economic Areas Affected by the New Healthcare Act According to the recent statistics of the US healthcare sector, the rising costs associated with each healthcare service has been affecting various economic factors are discussed hereunder. Annual Household Spending The development of ACA has influenced radically the annual household expenses of the middle-class families. In relation to the recent day context, the healthcare expenses are identified to have major expanding share regarding the annual household budgets of the range of middle-class Americans. The new care insurance system underneath ACA has raised significant burden on the middle-class Americans. In this regard, it has been identified that around 19% of the total populations under the age of 65 in the US, experience high burden regarding their healthcare spending (Komisar, 2013). Employment Market US labor market can be regarded as one of the major affecting economic areas due to the emergence of ACA. The sluggish growth in healthcare spending across the different states has been attributed to bring significant downturn on the US financial condition. In this regard, the provisions had affected the financial performance of the employers radically. Moreover, the increasing amount of annual tax regarding the healthcare insurance services provided by the employers to their employees has also been observed to lower the actual financial outcomes. In addition, significant amount of penalty payment due to the increasing number of uninsured employees has also become a major financial burden for the employers in the US (Lowry & Gravelle, 2014). Pros and Cons of using Private Insurance versus using New Affordable Health Insurance System Private Health Insurance In the context of benefit, ease accessibility along with continuity of appropriate care as well as support is regarded as a major advantage of private insurance system. Moreover, the availability of adequate insurance plans in accordance with the changing demographic conditions is also considered as a major benefit that can be gained from the private health insurance services (Bovbjerg et al., 2011). On the other hand, the lack of coverage regarding each conditions of the health insurance system is one of the major disadvantages of private health insurance system. Furthermore, lack of coverage regarding treatment or appointment procedures have also been identified as a major concern that can be derived from a private insurance system (Rosenbaum, 2011). New Affordable Health Insurance System The provision underneath ACA comprises specific revised rules for the insurance companies as well as the healthcare organizations of the nation to overcome the challenges of the health care industry of the country. In this process, the provisions of ACA ensure in developing adequate coverage for the US people as a whole. In this regard, coverage of individuals disregarding their required healthcare services and appointments is considered as a major set of benefits of ACA (Rosenbaum, 2011). However, the health insurance system under ACA also negatively affects the full time employment of individuals. Nevertheless, the reformation of the healthcare act is highly focused on covering individuals, rather to reduce the fiercely increasing cost of the healthcare services. Therefore, major threat on the economic factors is a major set of disadvantages of ACA (Gruber, 2011). Analyzing Costs Associated with Implementing ACA and Its Impact on Access to Healthcare Services In order to effectively deal with the possible challenges that might be derived from ACA provisions, it is essential for healthcare institutions to build effective cost plan in accordance with the policy, guidelines and principles. In this regard, ACA provisions regarding healthcare costs can be an effective strategy for the modern healthcare organizations. Strategic focus on conducting experimental activities to identify the cost effects regarding the alternative payment approaches can be a major strategy for the organization to minimize possible threats. In this context, emphasizing continuous focus on value-based purchasing and providing bundle of payment options to the service purchasers can be a major practice for the modern healthcare organizations to avert the risk from the newly developed care policies (Rosenbaum, 2011). Conclusion In the healthcare sector of the US, individuals are likely to pay for different types of healthcare services, excluding the insured population who are covered with tax-free benefits from their existing employment. The elderly populations are further observed as highly depended on the Federal Medicare system, while individuals with low-income groups, women, children and disabled are likely to receive healthcare services by the Medicaid system. In this regard, emphasizing strategic focus on experimental activities and continuing expansion of Medicare facilities can enable a privately held organization to avert the possible challenges from the newly developed ACA health insurance guidelines. References Bovbjerg, R. R., Ormond, B. A., & Waidmann, T. A. (2011). What Directions for Public health under the Affordable Care Act? Retrieved from http://www.urban.org/UploadedPDF/412441-Directions-for-Public-Health-Under-the-Affordable-Care-Act.pdf Gruber, J. (2011). The impacts of the affordable care act: how reasonable are the projections? National Bureau of Economic Research, 1-26. Jones & Bartlett Publishers LLC. (2008). Major characteristics of U.S. health care delivery. Retrieved from http://www.jblearning.com/samples/0763763802/63800_ch01_final.pdf Kaiser Family Foundation. (2014). Health insurance coverage of the total population. Retrieved from http://kff.org/other/state-indicator/total-population/ Komisar, H. (2013). The effects of rising health care costs on middle-class economic security. Retrieved from http://www.aarp.org/content/dam/aarp/research/public_policy_institute/security/2013/impact-of-rising-healthcare-costs-AARP-ppi-sec.pdf Lowry, S., & Gravelle, J. G. (2014). The affordable care act and small business: economic issues. Congressional Research Service, 1-23. Rosenbaum, S. (2011). The Patient Protection and Affordable Care Act: Implications for public health policy and practice. Public Health Rep. 126(1), 130-135. Wilper, A. P., Woolhandler, S., Lasser, K. E., McCormick, D., Bor, D. H., & Himmelstein, D. U. (2009). Health insurance and mortality in US adults. American Journal of Public Health 99(12), 1-7. U.S. National Library of Medicine. (2013). The U.S. health care financing system. Retrieved from http://www.nlm.nih.gov/nichsr/edu/healthecon/02_he_01.html Read More