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Custom Obama Care: Analysis of the Plan essay paper
Obama Care aims to guarantee that all U.S. residents who would otherwise not be able to access good and quality healthcare through their employers to have access to Health Care. This means that the residents’ health care accessibility does not lie in the hand of the insurance companies. This cares offers the American Employers with more than 50employees the choice of either providing insurance for the employees that meets the standards set in Obama Care or risk paying a penalty (Tate, 2012). The employers who have employees who are less than 50 may qualify for tax breaks, tax credits and other assistance for giving insurance services to the employees. The plan will be funded through increased taxations and shifting of cost burdens to the high-income earners and the government.
Cost Implications on the Various Segments.
Obama care makes it mandatory for all Americans to have insurance either through a federal assisted program or through a private provider. In one does not have the insurance by the year 2014, then he must pay a tax equivalent to 1% of his or her income by 2014 and 2.5% by 2014. Obama care funding will majorly depend on taxes levied on individual income but the payments are inversely proportional to the income of the families. Under this care, only a certain class of people will pay higher taxes. These people are the high-income earners. If someone makes annual income of $200,000 per annum or more than $250,000 as a married couple then higher taxes will be levied to fund Obama care. This group of people will pay a tax equivalent of 2.35% instead of the current 1.45%. These top earners will also experience an increase in the taxes on their investment income (Neilson, 2009). Now, there are no taxes on investment income for Medicare but through Obama Care, investors will pay a tax of 3.8%, which will go into funding the plan. However, investment income below the $200,000 per person or $250,000 for a married couple will not be subject to this tax.
The third way through which the plan will be funded will be through a tax called Cadillac health insurance plans, which is specific to those whose insurance plans are more than $10,200 for an individual and more than $27,500 for a family. The reasoning behind this tax concept is to encourage employees and their employers to choose insurance plans that have a low cost and thus encouraging people to consume the healthcare they require rather than therapies and procedures under high-cost plans but with little medical benefits. The last way of funding the plan is through penalizing people without health insurance plans by the year 2014. This will be a tax of to 1% of his or her income by 2014 and 2.5% by 2016.
Pros of the Plan
The Obama care will be advantageous to the health care industry, with the non-partisan Congressional Budget Office citing reduction in healthcare costs and making healthcare accessible to more than 32million American who cannot access insurance at the moment as the main advantage. The federal government will assist the people who cannot be able to afford health insurance by paying the states to add them to the Medicaid since such people are below 133% of the poverty level of about $29,000 per family of four. The people who do not qualify for the Medicaid will benefit from tax credits if their incomes are below $88,000 for a family of four. Under the care, insurance companies cannot reject kids and any other person coverage due to pre-existing conditions. In an event that a person is denied coverage due to the conditions, then they can appeal. In addition, parents can pay for their children’s premiums up to the age of 26years, which is however, beneficial to the insurance companies since they will charge higher premiums for this group of healthy individuals without higher costs (Tate, 2012).
The Medicaid will see the people who already have existing health insurance to keep them and business will offer tax-free benefits and in return attract good workers. Most importantly, Obama Care will reduce the budget deficit by $ 143 billion over the period of the next 10years. This is because of the increased taxes and the shifting of cost burdens.
Cons and Unintended Consequences
While the advantages of the Obama care seem too attractive, there are still some disadvantages that face the entire plan. First, the increased coverage may result in raising the health care costs since most people will receive testing and preventative care who, unfortunately, finally finds out that they did not have that serious illness. The additional testing and screening will eventually increase the net medical testing. The other disadvantage is the fact there will be additional taxes for the people will not have purchased health insurance by the year 2014 (Neilson, 2009). However, most of the people affected under this group are the poor who may opt to pay the taxes rather than pay higher insurance premiums. Moreover, the plan will result to increased taxation for the higher income people and investment income making it unattractive to many people. Of notable significance is the fact many people may end up losing their medical care as provide by the employers since they may opt to pay the penalties rather than paying the insurance premiums. The insurance companies, on the other hand, will be subjected to a 40% tax excise on the annual premiums exceeding $10,200 and $27,500 for individuals and families respectively, referred to as the Cadillac health plans.
Medical device importers and manufacturers will pay an additional excise tax of 2.3%. Indoor tanning services currently attract a 10% excise tax, and this will have an impact of discouraging such businesses from hiring new staffs. Lastly, the plan may lead to more than 30 million people who buy private health insurance getting other plans since the current insurance companies do not meet the standards of Obama Care (Neilson, 2009).
Potential Response from Various Segments
The care also has some unintended consequences that are likely to affect the insured and the uninsured people in the society. Currently, there are over 60% Americans who receive health insurance care from their employers, 16% are under Medicaid, 6% purchase private insurance while 19% are uninsured. After the implementation of Obama Care, one third of the population will go to Medicaid, 41% will be uninsured while 28% will fall under government health exchanges. This means that more people will have to purchase private health insurances. Majority of the medical care providers also feel that the pan will result to a negative impact on patient care while others feel that it will result in a negative relationship between them and their patients (Scott, 2012).
I have been advocating for health care reform for a very long time so that the uninsured people can have access to medical care despite their levels of income. However, the Obama Care does not seem to solve this problem. This is because, from the analysis above, the number of uninsured is likely to go up and they will be required to purchase their own healthcare insurance. Worse still, this is mandatory under this new program and people will be penalized for not have an insurance plan by the year 2014. Moreover, this care will result in increased taxation on the high-income people, investment income, insurance companies and medical devices importers and manufacturers. In the end, these costs will be passed to the consumers or result in reduction in the recruitment of staffs. This will result into high unemployment levels. For this reason, I do not think that the plan was a prudent plan.
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