Microeconomics Paper

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Health Insurance costs had increased tremendously during the Bush Administration (2000-2008). The premiums had been doubled, and risen faster than wages. Moreover, increased co-pay and deductibles threatened access to care. Many insurance plans were also limited, only allowing certain amount of doctor visits or hospital days. And over half of all personal bankruptcies were due to medical bills. A changed needed to be made. As a result of increased medical costs, about 45 million Americans including over 8 million children were uninsured, and millions more were on the brink of losing their coverage due to the rising costs. Even those individuals who were insured struggled to cope with the soaring medical costs. Due to the high costs, employers (mainly small businesses) also found it difficult to provide health coverage to their employees. Health care became more like disease care where ‘rush’ treatments were given in dire cases, rather than taking preventive measures such as cancer screening and immunization to protect against flu, pneumonia, or other illnesses.. These ‘rush’ treatments will hypothetically cost the government an immense amount of money in the long run. For this reason, Barack Obama proposed a plan that will provide affordable and accessible health care for all-‘the universal health care plan,’ in an attempt to also turn the economic crisis around. According to Obama, you can’t fix the economy without fixing health care. However, the main question lies as to whether ‘the universal health care plan” will really fix the economy. Layout of Obama’s Health Care Plan

The main idea of Obama’s universal health care plan is to increase the number of people who have health insurance by spending a significant amount of money upfront. According to Obama, the estimated cost of the proposal would be between fifty to sixty-five billion dollars annually when completely assimilated. However, Obama plans on cutting the high costs of its implementation by the discontinuation of Bush’s tax cuts for those making more than 250, 000 a year. The universal health care reform plan is composed of three parts which he claims builds upon the strengths of the U.S. health care system: 1) Quality, Affordable and Portable Health Coverage For All 2) Modernizing The U.S Health Care System to Lower Costs and Improve Quality 3) Promoting Prevention and Strengthening Public Health

Quality, Affordable & Portable Health Coverage for All
In this coverage, Obama builds upon existing private and public programs, such as employer health insurance, private individual health insurance, Medicare, and Medicaid. Obama aim was to establish a new public plan, equivalent to Medicare for individuals under 65 years old. This plan will be available for those who do not have an employer plan or qualify for Medicaid, as well as open to employers who do not offer a private plan. He also mandated participation into disease management programs to help patients and also reduce government spending in the long term. Over seventy-five percent of total health care dollars are spent on patients with one or more chronic conditions, such as diabetes, heart disease, and high blood pressure. Many patients with chronic diseases benefit greatly from disease management programs, which help patients manage their condition and get the care they need. (Ibid) In addition, Barack Obama will require that plans such as Medicare and Federal Health Benefits Program (FEHBP) that participate in the proposed new public plan will utilize proven disease management programs. This will, as a result, improve the quality of care and lower costs.

Other features of this plan include creating a National Health Insurance Exchange (NHIE), and providing an employer ‘pay or play’ plan. The NHIE would be a government-run marketing organization that will sell insurance plans directly to individuals who do not have an employer-based plan or public coverage. This exchange...
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