Basic overview of health care reform (3 articles):The Health Care Reform is making a huge economic impact as it has very important insinuations when it comes to the US economy. Hence it is important to understand what is going on with this topic. In “Health care reform stands: How it impacts your coverage” by Parija Kavilanz, it states that the Supreme Court supported the health care reform meaning that it is obligatory for people to purchase coverage by 2014 and if not they will have to be fined.
Hence by 2014, this will affect uninsured persons because they will have to purchase coverage by either doing it personally, by their employer's offered health plans or by a health insurance exchange. If they decide not to purchase coverage then a tax penalty would apply, for example when 2014 arrives, if an individual has not purchased coverage than the penalty fee will be $285 per family or 1% of their revenue (they will have to pay the higher one). By 2016, the penalty fee will increase drastically to $2,085 per family or 2. 5% of their revenue, paying the higher one.
In the intervening time, the people that are insured will still benefit from the significant things that are offered by the law. This includes things such as full coverage for preventive care and for grownup dependents of up to 26 year of age. However, this is possible because of the personal greater expenditure. Today in the US, greater than 50% of everyone (about 160 million people) acquire their health insurance straight from the company they work for and with this law in place by 2014, employers with greater than 50 full-time workers will be obligated to offer health insurance and if not they will have to pay fines.
For the remaining people, 50 million of them don’t have coverage and the other millions purchase coverage personally through a private insurance or obtain coverage from the government though plans like Medicaid or Medicare. In “How health reform may help ... or hurt,” by Jeanne Sahadi, it explains how this reform in health care can have huge impacts. Citizens in the US are being informed that this health reform is a correct objective and that it will help the economy. Obama had stated that this reform does not pertain to the problems when discussing the fiscal future but that it is part of resolving issues.
However, the issuer is that the US health care expenditures are way more than other established countries and yet the cost and what get out of it does not match up. Temporarily, many citizens don’t have enough money for coverage or their coverage that they do have does not cover sufficiently their medical charges. In Washington discussions are often raised to talk about the possible outcomes and options for this issue. In the past 40 years, the cost for health care expenditures has gone up quicker than inflation and incomes.
Currently, the US’s government, companies and people, devote greater than 16% of its GDP on health care, which according to Kaiser Foundation is about $7,421 per individual. Furthermore, the US’s high debt is also because of the growing health care costs, which increases federal expenditure on Medicare and Medicaid. However, if the health reform does work, as time goes by it would cover its own cost as well as decrease health spending without conceding quality and deliver inexpensive, accessible care for everyone.
Lastly, they have to think about if the health reform fails. All these “what ifs” are essential because one key point of why complete health reform has been an indecisive process is that it is very hard to uncover how to do it well. In “What the Supreme Court ruled on health care 'tax'” by Josh Levs, it discussed how the Supreme Court finds that consequences that the law puts on individuals that do not purchase health insurance amount as a constitutional tax protection while Obama claimed that the fees should be reflected as a penalty.
Meanwhile, the high court did not agree with Obamas view point. The court said that the law does not require other penalties for negation to purchase health coverage and hence there will be about 4 million individuals per year that will rather have the IRS fee instead of purchasing coverage. Furthermore, the court highlighted that it was not upon if this command was the right thing to do but because the Constitution allows this type of tax, hence it is not the courts part to prohibit it.
In summation, it is important to understand the health care reform as discussed in these articles, as it has a huge impact on the country. Health Care Reform's Effect on Business (http://www. accountingtoday. com/news/): This article explains the opinions that very influential accountants have towards the health care reform and its effect on the economy as it’s becoming a very important topic in the elections as well as to every day businesses that have considered this issue and because of it have hindered business decisions. One of these influencers is Mark Albrecht, CEO of XCM Solutions.
He explained that every business will now have to see if it is convenient to keep providing health coverage for their employees or to pay the fine while the employees buy their coverage from a private insurance company. He believes that since the fines are not that high, that there can be many companies that will prefer not offering health insurance, which is the opposite of the objective of the health care reform law. Hence, insurers have a lot of work ahead of themselves because of the fact that customarily they do not sell coverages to individuals and being that health insurance exchanges are a new notion.
As for health care providers, the impacts to them of this reform will fluctuate since they will have to demonstrate that they are providing superior care and if not it is likely that they will get a compensation cut. For state governments, almost all of the weight of this reform implementation will be on the states. The states will be responsible for arranging the health insurance exchanges as well as management for the programs. Therefore, a lot of states are questioning the constitutionality of this reform as it interjects the states' rights.
As for the taxpayers, this new reform doesn’t have an established or authorized method to monitoring the increasing health care costs. Health care expenditures are anticipated to keep on growing and hence will become a worry for many citizens in the US and for businesses as well. With no regulatory system of this increase in health care costs, it will be very challenging for the federal government to reduce the deficit and diminish the national debt liability; hence there will still be a huge economic crisis. Why Reform Health Care (http://useconomy. about. com):
The U. S. devotes $2. 5 trillion to its health care system, which is the highest contribution within other developed nations. This is because the majority of the expense derives from the first and last days of a lifetime. A huge progress and a lot of research has been conducted in order to save premature infants and very ill seniors and this has been very expensive. Also there is an increase of malpractice lawsuits, as doctors sometimes rather prefer to conduct unnecessary expensive tests instead of getting sued later because they had not conducted the test.
Furthermore, it is very expensive in the US because there is less price competition than in other industries as people simply have a fixed charge (co-pay). Health care costs keep on increasing and hence there is a need for a reform. Other reasons for a reform is to increase the superiority of care and to cover the 25% of citizens that have minimum or no health coverage to refuge their medical expenditure as each year more than 101,000 Americans pass away for not having coverage. This threatens the economy as half of all bankruptcies are of medical expenses.
Furthermore, a reform would be needed to stop the financial expenditures of health care fraud. In 2010, when the Patient Protection and Affordable Care Act law came about, it gave coverage to individuals with present illnesses, kids, and individuals who had lost their jobs. It offered aid to small businesses, elders with high medicine expenditures, and capital to help the scarcity of doctors. The overheads of this was planned to be balanced by having greater payroll taxes, greater charges to medicine companies, and less expenses to infirmaries and clinics.
With this act, greater than 600,000 young individuals are now covered, as individuals of up to 26 years of age are insured under their parents' coverage, which benefits the insurance companies. Also a Kaiser survey found that greater than 46% of small businesses, compared to 2010, had health care benefits. With an increase in small business with coverage for their employees, there are less bankruptcies as well as improved credit scores and greater consumer demand which permit greater spending, hence stimulating economic growth. Opposing Views: Voices on Health-Care Reform:
Eric Ries, in “Why the New Health-Care Law May Encourage Entrepreneurship,” explains that as an entrepreneur, he was aware that if his company didn’t succeed , he could always attempt something else. Hence, he always thought the actual risk of financial loss would be from the probability of a severe sickness that wouldn’t be covered by his insurance. However, these fears were overcome because at the time he began as an entrepreneur, he was young, healthy, and with no family to provide. Most successful entrepreneurs are in their forty’s and need to provid their families to health insurance.
Hence, the Kauffman-RAND Institute for Entrepreneurship Public Policy conducted a study indicating that entrepreneurship increases as prospective entrepreneurs become capable of getting Medicare. He believes that for there to be greater entrepreneurship, there has to be policies that decrease the price of failure so that more individuals are capable to be “start-up founders” and that the Health care reform is part of the answer to make this happen. On the other hand, Rose Corona in “Why the Health Care Law May Be a Harmful Prescription for Entrepreneurs” emphasis that ObamaCare is a catastrophe for small businesses.
She believes that this tedious, unclear and costly law will not help the economy. As a small businesses owner that doesn’t provide insurance to her employees, she doesn’t see the fairness of proposing her 30 employees a coverage if it means her business would go bankrupt. Also, she believes that with this reform, small businesses will maintain their employee count below the 50 employee minimum prerequisite to remain excused from offering health insurance hence this will create less jobs and expansion of businesses.
So this will have small businesses considering to either increasing their prices to be able to offer health care to their workers or to reduce benefits to hence maintain competitive prices. Rosa clearly does not agree with this reform. Businesses Ponder Impact of Health-Care Reform: The Supreme Court has been dealing with opinions over the topic of obligating all Americans to buy health coverage because the reform states that in 2014 businesses with greater than or equal to 50 employees will have to offer health insurance or pay a fee of $2,000 per employee. About 96% of all U. S. Small Business have less than 50 employees.
Many questions have risen such as are part-time or seasonal employees part of this reform, is it less costly to pay for health coverage or the fee and what is the minimum of coverage that has to be provided? David Keiter, the owner of Yellow Van Cleaning, a carpet cleaning business with currently 48 workers is putting off hiring more employees until he sees what happens to this reform and many businesses are going through the same. He says that prosperous small businesses are about performing in “better, faster and more efficiently” ways and that with “complicated regulations,” it is just “an obstacle” in the way of achieving this goal.
The Economic Effect of Health Care Reform on Small Business and their Employees:Small businesses in the US compromise a great part of the country’s economic world. However, small businesses are strictly underprivileged with the existing health care system. The Council of Economic Advisers conducted a study that showed that small businesses are very important to the economy and are a huge foundation of the US job evolution as they are the mainstream of business start-ups, hence very crucial when it comes to the topics of innovation and fiscal progress.
Also, it showed that the health care now does not function very well these small companies as well as their employees as there are hefty taxes enforced. The health care reform would help small businesses to buy health insurance through an insurance exchange which offers a huge amount of coverage options at a lower price and for small businesses that offer health coverage to their workers, they will get a tax credit to ease the excessively costs and therefore make them want to offer coverage.
This establishment of the insurance exchange will deliver improved and lower price alternatives for employees that currently do not receive insurance from their job. Moreover, health insurances will not be able to judge who to give insurance because of present illnesses. The reform can also help grow the entrepreneurial movement by potentially increase the amount of workers that would want to work for a small business and can decrease “job lock” of when employees are scared to quit their job because of terror of finding inexpensive health insurance.
Only the small business that cannot or will refuse to offer health insurance will endure a huge cost. Papa John's CEO Says Health Care Reform Law Will Increase Price of Pizza:Papa John's CEO John Schnatter stated that people should anticipate for pizza orders to be more expensive by 2014 because of the health care reform. The estimate for this reform per pizza is about an additional 11 to 14 cents. In a company meeting, he informed the company that its approach would be to impose the additional expense onto customers in order to keep the shareholders of the company at their best benefit.
They also commented about how this reform might have a undesirable influence as the company and its franchises might have to offer health insurance to their part-time employees which is something they don’t always do for certain part time workers. This also applies to other employers and a study by Mercer L. L. C. said that about 46 percent of hospitality businesses will experience greater health insurance costs by about 3 percent by 2014. Cogent statement:
After reading the articles summarized above and getting a better understanding of the health care reform, even though many of the articles oppose this reform, it might not be such a negative approach for the country but instead in the long run, I think that it will have a positive change. A lot of thought has been put in this reform and there are reasons of why it includes specific details. With the study conducted by the Council of Economic Adviser, we can have an idea of the economic influences that this health care reform will have on the US economy as a whole.
They approximated that by reducing the yearly increase in health care costs by 1. 5 percent, then this would give rise to the real GDP. Hence, with a decrease in the growing rate of health care expenditures, the revenue gains are slightly minor, but still significant. Also, decelerating the growing percentage of health care expenditures will avert the devastating increases that we see in the Federal budget deficit as well as decrease the unemployment levels. Furthermore, offering health insurance to those without coverage would increase the net financial welfare by approximately $100 billion per year.
The health care reform will possibly also rise employment and eliminate preventable obstacles to work mobility. In the article “Health Care Reform Bill Summary: A Look At What's in the Bill” on CBS News, it informed that the cost of this reform would be about $940 billion in ten years, but that the deficit would decrease by $143 billion in ten years after implementing it. This reform would offer health insurance to about 32 million people in the US, who presently do not have coverage. For the people with no insurance or for those who are self-employed, they will be capable of obtaining insurance by going to their state insurance exchanges.
There will also be subsidies accessible to people as well as their families if their revenue falls in the 133 percent through 400 percent of the Federal Poverty Level. For small businesses, distinct exchanges would be formed to buy insurance which will be in live in 2014. As for small businesses, with the present health care system of the country, they spend significantly more to offer coverage to their employees. Normally, small businesses spend about 18 percent extra on health insurance than bigger businesses. Hence,
