Obamacare: What Will the Health Care Industry Look Like Five Years From Now - Essay Example

"Obamacare: What Will the Health Care Industry Look Like Five Years From Now?" is an exceptional example of a paper on care.
By 2080 the U.S. economy will spend 40% of its GDP on healthcare (CBO, 2010a). The Affordable care Act(ACA) imposes limits on discriminatory pricing of insurers, requiring every individual to purchase insurance and thereby giving subsidies to make insurance affordable for low-income families. The ACA based on the Massachusetts Health Care Reform Act plans to cover 32million uninsured Americans (Clemmitt, 2012).

ACA will lead to increased healthcare expenditure to 19% by 2019 from the present 17%.it is argued that if this rate is maintained then within 2080, the whole system of ACA will become unsustainable. But if we consider the Cadillac tax, an increasing proportion of health insurance plans will get taxed, and in order to avoid tax, people will opt for low-cost insurance options thus lowering the overall health expenditure.ACA will place a huge financial burden on Fed Government, projecting $940 billion in future spending and $1080 billion in revenue earning, leading to a deficit of $140 billion (2010-2019). This deficit is supposed to increase to $1 trillion in the next decade (Gruber, 2011).

ACA can lead to the problem of “free-riding”. If health insurance is being guaranteed to individuals irrespective of health status at an average price then some individuals will buy insurance only when they fall sick. In such conditions, the insurers will be charging higher prices from the rest of the population so as to fund the free riders. This adverse selection problem will lead to a higher price and a failed insurance market (Gruber, 2011).

This Act will encroach upon the liberty of common people by not letting them choose what policies to buy and what not (Clemmitt, 2012). But again this law is constitutional as one point of time everyone needs to enter the health care market. The rise in taxes for the middle class puts them at a loss. A family income over $250,000 will have to pay up to 2.35% Medicare Payroll tax with an additional 3.8% on interest and dividend income.

The CBO is estimating that number of hour’s works will decline by 2% from 2017 to 2024 which means a decline in full-time workers of about 2 million in 2017. A small business owner with over 50 full-time employees will be penalized if they do not insure the workers. Again they have to pay a tax of 0.09% tax for making a profit of over $250K. This rise in operating costs is directing the small business and franchise owners to cut employee’s hours as they are not able to afford the health insurance them or to pay the fine for not getting them insured. The CBO report of 2012 is projecting the fact that 3 to 5 million people will be provided insurance by their firms from 2019-2022 (Impact of ObamaCare on Jobs, 2014).

Some positive outcomes can be expected like new jobs in the health insurance market, health education and IRS will crop up. Small businesses will be able to provide health insurance to employees and thus will become an attractive place to work. There will be an expansion in National health care forces like doctors, nurses, etc.