Economic Impact of Affordable Care Act

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“Economic Impact of the Affordable Care Act”

The current healthcare system over burdens the economy and is far too costly in comparison to the health benefits it delivers. The United States spends about 50 percent more on healthcare than any other developed country (as a fraction of our total national economy) and we get less for it on what matters. The human capital required to obtain these services leaves many Americans doing without or not receiving the medical treatment required. The Affordable Care Act may be the most controversial legislation in the modern era. It is marketed as healthcare expansion to about thirty million more Americans. The ACA is also designed to do away with some of the unfair elements of the current system. Health insurers currently are able to deny people coverage for “pre-existing conditions” which makes out of pocket costs out of reach for most Americans. As with any piece of federal lawmaking, the ACA was the product of political compromise among parties and interests. (Turner) However, the ACA should help to improve the GDP in the long run. In the short term period, the increase in economic security for American families will also mean an increase in consumer spending. Many uninsured consumers are forced to set aside money in low interest liquid accounts to make sure they have enough to cover unexpected medical costs. With the security provided by health insurance, they can free that money up for consumption that is much more valuable to them. When the federal government expanded Medicaid in the 1990s, the newly insured significantly increased their spending on consumer goods. (Brodwin) More purchases of consumer goods will provide short-run stimulation to the economy and more hiring. Opponents of the act have countered this theory saying it will freeze hiring in some industries. Some employers may resist hiring new workers, at least partly to avoid the high costs of the law's mandated health coverage. The health law...
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