Evaluation of the Affordable Care Act, Medicaid, and Medicare

Medicare, one of the social security programs offered by the United States and created in 1965, offers health insurance to those 65 and older. Young disabled people and those with end-stage renal illness are also covered by the medical plan. Due to the fact that Medicare is a federal government project, those who fall into these categories can enroll in it regardless of their income position (Bauchner, 2015). Hospital Insurance is widely accessible since it is paid for by special payroll taxes paid by people across the US. Under this Medicare plan, there are no ongoing premium payments required. All medical expenses related to outpatient, physician, and home healthcare fees are covered by the Supplemental Medical Insurance. Similarly, Medicare Advantage gives users an opportunity to create a custom plan that suits their medical needs. Lastly, the Prescription Drug Coverage is run by companies approved by Medicare to finance the cost of prescription drugs. However, individuals must be covered by the first two components of Medicare (Klosko, 2017).

Medicare increases the healthcare coverage for US citizens. Currently, the program covers 57 million people and accounted for 15% of the federal budget in 2016. According to the 2016 statistics, the taxpayers incurred $675 billion to fund Medicare. In the last decade, Medicare access has increased by almost 50% since the cost to taxpayers was $375 billion in 2006 (Guy, 2017). Based on the above statistics, it is clear that Medicare increases the demand for healthcare because people have coverage irrespective of their income status.

The cost of healthcare in the US accounts to $3.4 trillion according to 2017 data (Guy, 2017). However, Medicare reduces the medical costs for consumers, but it does not lower the cost of healthcare in the country. Insurers are now insisting on contracts that have better incentives by reducing costs but improving on quality. Similarly, the deductibles on consumers have reduced since ACA was instituted. Nevertheless, the increase in number of people with health insurance has increased the burden of healthcare on the society as the federal government shifts the tax burden to consumers (Bauchner, 2015).

Market forces determine the prices of healthcare even though a reduction of Medicare prices would lead to the decrease in healthcare supply. Medicare is insensitive to the effects of demand and supply, and hence, it does not hurt the ability to attain market equilibrium. Medicare increases the demand for healthcare by increasing the number of people using health and medical insurance. As a result, Medicare would be sustainable in the long-run if the program adopts a pricing schedule that represents a perfectly competitive market (Miller, 2013).

Medicaid

The Medicaid Program is an initiative by both the federal and state government for the provision of low-cost health care coverage to Americans. In other words, Medicaid is run by state governments using federal guidelines and funding. With this note, Medicaid varies across states. Each state runs different options that affect the program eligibility. The program covers pregnant women, families and children, low-income households, the disabled and the elderly (Bauchner, 2015). Medicaid funds the healthcare costs of individuals by directly paying the healthcare providers through a fee-for-fee agreement or a HMO (health maintenance organization).

Medicaid increases the healthcare coverage for US citizens especially the elderly, disabled and low-income families. However, recent research stipulates that 60% of the poor in the US are not covered by the program. Therefore, the federal and state governments should implement better policies that cater for the poor who are not enrolled in the program. According to the CMS (Centre for Medicare and Medicaid Services), the taxpayers paid $553 billion in 2016. The federal government funded 67%, and 37% came from, states (Klosko, 2017).

The expansion of Medicaid has increased healthcare coverage in the US. It is the most significant source of healthcare funding for low-income families and the handicapped and covers 74 million people (Klosko, 2017). Low-income families no longer feel the economic burden of medical expenses. Medicaid has lowered the cost of healthcare for consumers while raising the overall cost of health services in the society. The expansion of Medicaid led to an increase in federal spending on healthcare. The ripple effect was an increase in taxes for consumers (Bauchner, 2015).

Medicaid has increased both the demand and supply of healthcare in the United States. Consumers no longer incur out of pocket expenses because they are insured. Healthcare facilities have also increased capacity and reach to the majority of citizens. Therefore, Medicaid is sustainable in the present and the long run (Klosko, 2017).

The Affordable Care Act (ACA)

The ACA was established in 2010 to provide Americans with affordable and quality health insurance as well as reducing healthcare expenditure in America. The Act features rights and protections, new benefits, spending, funding, tax breaks, job creation, education and the rules for insurance companies (Selker & Wasser, 2014).

The ACA has improved health coverage by reducing surplus payments made to private insurance companies that facilitate Medicare Advantage. The Act has lowered loopholes for siphoning money from consumers (Bauchner, 2015). According to the CMS, ACA saved $68 billion in 2016 that could otherwise ended up in the hands of private insurers. Since the inception of ACA, 11 million Americans that were previously uninsured are currently under health coverage.

The ACA was estimated to cost taxpayers $940 billion for ten years in 2010. In 2012, further projections implied that it would cost $1.76 trillion for the same period (Selker & Wasser, 2014). In 2016, the Act was estimated to cost taxpayers a whooping $110 billion due to rising costs and an expanded medical coverage. The program lowers the cost of healthcare to consumers because it protects them fraud, and equates the cost of medical aid to the quality of health service provision. On the contrary, studies indicate that ACA has increased the cost of healthcare in terms of added tax incentives for all Americans. Taxation is the primary revenue stream for the federal and state government (Guy, 2017).

ACA increased both the healthcare demand and supply in the US economy. 22 million more people enrolled for health insurance according to RAND after the implementation of the legislation (Selker & Wasser, 2014). On the other hand, the existing medical facilities have increased capacity, infrastructure, education, and services to meet the demand. The Affordable Care Act allows for market forces to reach equilibrium because it matches quality with the cost. Nevertheless, the Affordable Care Act is not sustainable in the long run because it has added more debts than savings. ACA has contributed to the increase of national debts that accounted to $590 billion in 2016 (Guy, 2017). It has also led to the increased cost of healthcare for all Americans. Americans incur the tax burden charged by the federal government to fund healthcare accessibility and services.

References

Bauchner, H. (2015). Medicare and Medicaid, the Affordable Care Act, and US Health

Policy. JAMA, 314(4), 353. http://dx.doi.org/10.1001/jama.2015.8587

Guy, M. (2017). Eleanor D. Kinney, The Affordable Care Act and Medicare in Comparative

Context. Medical Law Review, 25(4), 684-691. http://dx.doi.org/10.1093/medlaw/fwx005

Klosko, G. (2017). Medicare and Medicaid. Oxford Scholarship Online.

doi:10.1093/acprof:oso/9780199973415.003.0008

Miller, D. A. (2013). Medicare. Detroit: Greenhaven Press.

Selker, H., & Wasser, J. (2014). The Affordable Care Act as a National Experiment. New

York, NY: Springer New York.