Medical Costs in the United States - Research Paper Example

Healthcare costs are on the rise and there seems to be no way for these costs to stop without reform measures. The Problem with Healthcare Spending One problem with healthcare spending is that it is growing faster than the economy and everyone is affected by this change. Whether people use private insurance, Medicare or Medicaid, they will be affected in some way as healthcare costs continue to grow. (Myerson, Nelson, Simpson, and Topoleski (2007). This has put healthcare as a much talked about issue and it is both a social issue and an economic one.

According to Healthcare Problems.org, in 2007 about 50 million Americans went without health insurance and about 25 million were considered underinsured. Between 2001 and 2005 health insurance premiums increased by 30% but people’s income only rose about three percent. Today, healthcare expenditures have increased to $2 trillion a year. Over the past four years, the number of people who are now underinsured has reached 60% which means that 25 million people are struggling to pay their healthcare bills (“Healthcare Statistics, “ 2011).

The highest rate of underinsured (31%) is in those Americans who make less than $20,000 a year. After doing an informal survey of people I know, many Americans agree that there should be some type of healthcare reform, but most people are not sure how this reform would take place and who would fund it. Employer Based Insurance When people look for a job one of the benefits they look for is health insurance. Many people feel that if the employer offers insurance they will be able to afford to have insurance.

Unfortunately, employer supplied healthcare is also suffering because of the rising costs of healthcare. According to a report by Singhal, Stueland, and Ungerman (2011) the Affordable Healthcare Act has created more cost problems for employers and many have limited this benefit for their employees or stopped providing it all together. According to their report, by 2014, employers will have to make drastic changes in the way they do healthcare. One of these drastic changes is that about 30% of employers will “probably” stop offering insurance to their employees after 2014 because of the expense.

Singhal, Stueland and Ungerman (20010 surveyed employers and predict that if employers stop offering insurance, they may increase their revenues by at least 30%; this makes this option very attractive to employers who are struggling to provide healthcare. Singhal, Stueland, and Ungerman (2011) also state that because of the way that reform is stated, employers are able to limit their social obligation to their employees to offer insurance. The way in which the reform act is written, states that all employees must have some type of insurance, but they do not stipulate that employers have to provide it.

The Act states that if the employer does not offer insurance, the individual can apply for “income-indexed premium and out-of-pocket cost-sharing subsidies” (Singhal, Stueland, and Ungerman, 2011, p.2). The law specifically states that employers with 50 or more employees must offer health insurance to all full time employees or face a fine of $2,000. They also must provide reasonable coverage to all their employees on a similar level. In other words,