Microeconomics Paper Essay Example

billion annually once fully integrated. However, he intends to reduce these high costs by discontinuing Bush's tax cuts for individuals earning over $250,000 a year.

The universal healthcare reform plan consists of three components that Obama claims will improve the strengths of the U.S. healthcare system:

1. Providing quality, affordable, and portable health coverage for all
2. Modernizing the U.S. Healthcare System to lower costs and enhance quality
3. Promoting prevention and strengthening public health.

To achieve this coverage, Obama builds upon existing private and public programs such as employer health insurance, private individual health insurance, Medicare, and Medicaid.

President Obama aimed to create a new public plan, similar to Medicare, specifically for people under 65 years old. This plan would cover individuals who don't have insurance through their employers or are not eligible for Medicaid. It would also help employers who don't offer private plans. Additionally, Obama required individuals to participate in programs that manage diseases. These programs benefit patients and also reduce government spending in the long term. Currently, more than three-quarters of healthcare expenses go towards treating patients with chronic conditions such as diabetes, heart disease, and high blood pressure. Disease management programs have proven highly beneficial for these patients by helping them effectively manage their health and receive appropriate care.

Barack Obama's proposal is to require plans like Medicare and the Federal Health Benefits Program (FEHBP) to utilize proven disease management programs. The goal of this requirement is to enhance care quality and decrease expenses. In addition, the proposal includes establishing a National Health Insurance Exchange (NHIE) and implementing an employer 'pay or play' plan. The NHIE would function as a government-operated organization that directly sells insurance to individuals without coverage

from their employers or public programs. Consequently, this exchange will streamline the insurance market for those lacking coverage.

Obama's objective is to achieve universal healthcare coverage through the implementation of a provision called 'pay or play' for employers. This provision entails that employers must either offer health insurance to their employees or make contributions towards a public plan. Furthermore, this plan mandates that all children must possess either private or public health insurance.

The goal of this plan is to expand the eligibility requirements for government programs like Medicare and Medicaid in order to encompass more individuals. The ultimate aim is to provide comprehensive benefits similar to those enjoyed by federal workers and ensure that individuals who obtain their policies through the new public plan (NHIE) can transition between jobs without losing their coverage.

This approach can be likened to the European concept of universal healthcare.

In Europe, the concept of 'solidarity' is commonly used. It is based on the idea that everyone shares the burden equally and is covered by the same pool. Obama's universal health care plan aims to promote health care solidarity by establishing a system that ensures access for everyone to not only a single government-run plan but also various government and private plans.

Obama recognizes that most Americans are unwilling to give up their private health insurance plans. He understands the political necessity of incorporating private health insurance into any unique American solution.

The section titled "Modernizing The U.S. Health Care System to Lower Costs and Improve Quality" focuses on Obama's efforts to transform our current health care system. His goal is to reduce inefficiencies and waste, prevent medical errors, and improve the quality of care

provided. Ultimately, these efforts will result in lower costs for individuals and families.

Obama's plan is to modernize medical file management by transitioning from paper records to electronic health information systems. Currently, most medical records are stored on paper, which causes difficulties in coordinating care, assessing quality, and reducing errors. Processing paper claims also leads to twice the costs compared to electronic claims processing. To tackle this issue, Obama proposed investing $10 billion annually for the next five years to implement electronic health records and other standards-based electronic health information systems nationwide. These new systems, known as Health Informational Technology (HIT), will be accessible even in rural and underserved areas.

Obama is dedicated to safeguarding patients' privacy through the use of technology. According to a study conducted by the Rand Corporation, hospitals and doctors' offices have the potential to save up to $77 billion annually by implementing electronic health records. These savings would result from reduced hospital stays, fewer unnecessary tests, improved medication usage, and overall increased efficiency. Additionally, Obama seeks to alleviate the financial burden that catastrophic illnesses impose on both employers and employees. Currently, catastrophic health expenses are a significant contributor to private insurers' medical costs. Recent data reveals that individuals within the top five percent bear the highest healthcare expenses in the United States.

Social Security makes up almost 50% of overall healthcare spending, making health insurance unaffordable for employees at a specific company. To address this issue, Obama suggested a solution: employers would receive reimbursement for some of the high catastrophic costs they exceed beyond a certain limit, on the condition that the savings are used to decrease health premiums for their staff.

Obama's plan

includes boosting investment in comparative effectiveness reviews and research to minimize waste and missed opportunities. This entails reviewing previous literature, analyzing electronic healthcare data, and conducting real-world studies on new technologies. By granting access to both old and new data, individuals in America along with their physicians will have more thorough and unbiased information for informed health decisions. Additionally, Obama's plan suggests reforms to medical malpractice while safeguarding patient rights.

Doctors are currently facing challenges in practicing medicine due to the increasing rates of medical malpractice insurance, as stated by a source (Ibid, p5). This issue is also leading to higher healthcare costs for everyone. To address this problem, Barack Obama intends to strengthen antitrust laws with the goal of preventing insurers from charging excessive amounts for malpractice insurance. Additionally, he plans to tackle the anticompetitive behaviors exhibited by drug and insurance companies in order to reduce healthcare expenses. It is seen as unjust that American families have to pay high premiums while these industries continue making record-breaking profits (Ibid). Therefore, Obama's plan aims to foster competition in the insurance and drug market, ultimately resulting in reduced expenses for insurance premiums.

In recent years, the insurance industry has been largely controlled by a small number of prominent companies. These companies have thrived by eliminating their competitors and acquiring non-profit insurers throughout the country. As a result, there have been over 400 healthcare mergers in the past decade (Ibid). However, this consolidation has led to only two companies dominating more than half of the national market (Ibid). While these changes were intended to improve efficiency, they have instead resulted in a significant increase in premiums over the last

eight years (Ibid).

Under President Obama's plan, measures were proposed to address the monopolistic power of these large insurance companies that unjustifiably raise prices. The plan aimed to enforce regulations that would require these companies to allocate a reasonable portion of their premiums towards patient care. This would prevent them from hoarding excessive profits and administration costs, particularly in an uncompetitive market.

Barack Obama’s National Health Insurance Exchange aims to enhance competition among insurers and reduce costs. One tactic involves permitting the importation of safe drugs from other countries, prohibiting drug companies from bribing generic manufacturers to exclude them from the market, and granting Medicare the authority to negotiate lower drug prices. These measures have the goal of providing affordable medications for consumers in the United States and preventing pharmaceutical companies from exploiting their monopoly power. Moreover, Obama's healthcare plan emphasizes increasing awareness about the health crisis impacting many Americans. He believes individuals should take responsibility for creating conditions and opportunities that promote healthy lifestyles. By extending coverage to those without insurance and modernizing the healthcare system, Obama pursues a comprehensive approach to addressing these issues.

In the United States of America, there is currently a widespread epidemic of chronic diseases. These diseases, which include obesity, diabetes, heart disease, asthma, and HIV/AIDS, are causing significant suffering and death. They can be prevented and are resulting in enormous harm. Additionally, they place a burden on healthcare resources with costs exceeding $150 billion.

To address this issue,
Obama proposes various prevention strategies:

• Implementing wellness programs for employees
• Combating childhood obesity in schools
• Increasing the availability of primary care providers
• Establishing disease prevention programs

He emphasizes that promoting health and wellness is a shared responsibility among individuals, families,

schools, employers healthcare professionals ,and government entities at all levels.
All parties must collaborate to encourage Americans to adopt a healthy lifestyle.

Obama's health insurance plan aims to guarantee coverage for the majority of Americans, with a practical cost of at least $100 billion annually. Although the plan requires a significant initial investment, it offers long-term advantages by focusing on preventing chronic diseases. While individuals will experience financial savings, government spending will also increase accordingly. A key aspect of this plan is its goal to decrease expenses related to catastrophic illnesses; however, some may view this as a mere redistribution rather than an actual reduction in costs.

The cost of health insurance for workers and their families will be reduced, but government spending will increase by the same amount. The federal government will cover a significant portion of the most expensive claims, thus lowering the cost of health insurance. At first, employers will be reimbursed for expenses related to severe illnesses. The initial phase of Obama's healthcare

plan aims to provide comprehensive coverage that is high-quality and affordable for everyone. Now let us analyze each objective individually.

Although there may not be immediate economic advantages, it is important to consider the long-term benefits of increasing funding for disease management programs. These programs prioritize spreading out treatments over time rather than overwhelming the system with urgent cases. Nevertheless, it is essential to recognize that these investments can be costly and contribute to existing deficits in the economy.

This strategy is similar to bonds and interest rates as payments are distributed over time, considering inflation rates instead of a one-time payment at the current market rate. Consequently, periodic treatments prove advantageous in the long run, benefiting both cost and economic improvement.

The second component of the plan is 'affordability', which aims to transfer insurance costs from individuals to the government rather than enhancing efficiency in the healthcare system. The affordability of health insurance for Americans depends on billions of dollars being allocated by the government to subsidize access for all.

Despite the potential risks, it is important to make health care more affordable in the long term. From an economist's viewpoint, as long as the price of health care is reduced and there are sufficient insured individuals in a competitive market, the insurer can still generate significant profit if the price equals the marginal cost of providing services. However, due to insurance companies having a monopoly, government regulation is necessary to control high coverage costs while enabling the monopoly to earn a reasonable rate of return. This regulation will ultimately be effective by saving government funds that would otherwise be spent on emergency treatments for those unable to

afford healthcare. Moreover, by promoting regular check-ups instead of waiting for critical situations, it will aid in reducing national expenditure. Additionally, implementing portable coverage for all will successfully extend insurance to most uninsured individuals and safeguard those presently covered; yet initially, it may impose a financial burden on the economy.

In fact, the plan likely increased spending by injecting billions of dollars into the system without any immediate cost containment measures. The question remains whether we can afford to wait a decade to witness an economic change. The second part of Obama's health care plan involves modernizing the US healthcare system to lower costs and enhance quality. This includes implementing health information technology, strengthening antitrust laws against malpractice, increasing competition among insurance companies, and reducing drug prices. These ideas are commendable and could potentially result in long-term savings for the government. However, I believe that these changes would only be realized after another ten years if they are fully implemented.

Despite the successful implementation of health information technology mentioned by President Obama since 2004, my biggest concern is that some of these changes have had very little success in the market over the years. However, it is expected to take more time than anticipated to be fully incorporated in the United States. President Obama has stated that his first term in office will save $77 million annually.

The RAND study estimates that the health care system will not achieve approximately $77 million in savings until 2019 and there will be ongoing costs to maintain the system. However, electronic health records offer several benefits, including a decrease in medical errors, fewer duplicate tests, shorter hospital stays, and an increase

in preventive measures for better overall health. These improvements primarily result in cost reductions for insurance companies and to a lesser extent for uninsured patients who have to cover their own health care expenses. Nevertheless, it is important to consider the broader implications and long-term consequences of these advancements.

The implementation of electronic health records will improve the efficiency of the healthcare system, leading to growth in hospitals and cost savings for insurance companies. Consequently, hospital executives and insurance providers will be able to better manage government regulations and ensure healthcare affordability for the majority of individuals. Additionally, Obama's plan aims to reinforce anti-trust laws to prevent excessive charges for malpractice insurance and enhance competition, resulting in apparent immediate economic benefits.

By enhancing anti-trust legislation, there will be a reduction in the cost of malpractice insurance. This will enable physicians to allocate more of their earnings towards taxes and the economic recovery. Additionally, the reinforcement of these laws will result in heightened competition, subsequently lowering insurance costs for both families and businesses. Experts suggest that the high expenses in sectors with limited competition have hindered Mexico's economic progress compared to other prominent emerging markets. Furthermore, the establishment of the National Health Insurance Exchange by Obama aims to boost efficiency in competition and minimize overhead costs for insurance companies.

Both the reduction of overhead costs and the insurance exchange play a significant role in containing costs and improving access to health insurance. While reducing insurance company overhead is important, it only accounts for a small percentage of total costs. Furthermore, these overhead costs have been increasing at the same rate as general inflation, whereas healthcare costs have been rising

at two to four times the basic inflation rate in recent years.

The insurance exchange serves as a valuable tool for guiding insurance markets to comply with consumer protections and promote competition in cost-efficient ways. This, in turn, allows more Americans to obtain coverage. The exchange facilitates communication between purchasers and insurers, addressing issues present in private health insurance markets such as inadequate risk spreading, price discrimination, skyrocketing costs, inefficient subsidy delivery, and underinsurance. Ultimately, the exchange promotes increased awareness and efforts towards making healthcare more affordable for all.

Obama's proposal to legalize drug importation by consumers is seen as a positive move. However, past experiences have shown limited success in boosting the economy through such measures. Importing drugs from other countries incurs high shipping costs, which may counterbalance any potential savings for consumers or even increase costs if not ordered in large quantities. For instance, the quantity of drugs imported from Canada has declined by 50% in recent years, indicating that this previously popular initiative has failed to generate sufficient savings. A letter from the FDA Commissioner further affirms the concerns surrounding drug importation in the U.S.

The safety of drugs from Canada, Europe, Japan, and Australia cannot be guaranteed. However, legalizing drug importation could lead to the establishment of new businesses that can take advantage of the lower prices overseas. These businesses can then sell drugs to consumers at cheaper prices, making the current market more competitive. The emergence of these businesses can also create employment opportunities and contribute to the economic recovery. Implementing these changes will incur a significant amount of debt and may not yield immediate results. Nevertheless, it is important to consider whether

we are willing to accept these potential losses in order to achieve the desired outcome. CONCLUSION -------------------------------------------- [ 1 ].

The Kaiser Family Foundation and Health Research and Educational Trust released a report in 2008 called "Employer Health Benefits 2008". You can find the report on their website at http://kff.org/insurance/7527/index.

According to the Bureau of Labor Statistics in September 2008 [2], a study conducted by David U. Himmelstein, Elizabeth Warren, Deborah Thorne, and Steffie Wooldhandler in February 2005 found that illness and injury can contribute to bankruptcy [2]. The study was published in the journal Health Affairs [2] and can be accessed at http://content.

The and their contents in the text below are:
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- healthaffairs. org/cgi/content/abstract/hlthaff. w5. 63v1 [ 3 ].

The source of this information is the Census Bureau, dated August 2008. You can find the full publication at http://www.census.gov/prod/2008pubs/p60-235.pdf [4].

Richard Kirsch (January 2009). "Fix health care to fix our economy," Healthcare for America Now. , http://www. huffingtonpost.

com/richard-kirsch/fix-health-care-to-fix-ou_b_168190. html [ 5 ]. Karen Davis, Cathy Schoen, Stuart Guterman et al. (January 2007), Slowing the Growth of U. S.

Health Care Expenditures: What are the Options? Commonwealth Fund [6]. Center on an Aging Society at Georgetown University, Disease Management Programs: Improving Health and while Reducing Costs?, p4, (January 2004). http://hpi.georgetown.edu/agingsociety/pdfs/management.pdf [7].

AEIP (June 2005). A Reflection Paper on Solidarity in Social Protection, http://aeip. mypublisher. be/index. cfm? fuseaction=docs. download;filepath=E9F3105F-B4FC-F550-179B998D36A3DA82/EA189A4F-D029-C1A7-AC959BD892301464.

pdf;rfname=AEIP_53_en.pdf [ 8 ]. Obama-Biden Campaign (2008). “BARACK OBAMA AND JOE BIDEN’S PLAN TO LOWER HEALTH CARE COSTS AND ENSURE AFFORDABLE, ACCESSIBLE HEALTH COVERAGE FOR ALL,” p. 2. www.

barackobama. com/pdf/issues/? HealthCareFullPlan. pdf [ 9 ]. Federico Girosi, Robin Meili, and Richard Scoville (2005), Extrapolating Evidence of

Health Information Technology Savings and Costs.

RAND, page 36. [10]. Obama-Biden Campaign (2008). "BARACK OBAMA AND JOE BIDEN'S PLAN TO LOWER HEALTH CARE COSTS AND ENSURE AFFORDABLE, ACCESSIBLE HEALTH COVERAGE FOR ALL," p.

4. The healthcare plan can be found at www.barackobama.com/pdf/issues/?HealthCareFullPlan.pdf [11]. It is provided by the Office of the Actuary.

(February 2007). National Health Expenditures http://www.cms.hhs.gov/NationalHealthExpendData/downloads/proj2006.pdf [12].

According to the Obama-Biden Campaign (2008), their plan to lower healthcare costs and provide accessible coverage for everyone can be found on page 4 of their document "BARACK OBAMA AND JOE BIDEN’S PLAN TO LOWER HELTH CARE COSTS AND ENSURE AFFORDABLE, ACCESSIBLE HEALTH COVERAGE FOR ALL" available at www.barackobama.com/pdf/issues/?HealthCareFullPlan.

pdf [13]. Commonwealth Fund, Why Not the Best? Results from a National Scorecard on U.S. Health Systems Performance, September 2008, http://www.cmwf.org/publications/publications_show.

The and their contents are kept intact in the followingand unified text:
htm? doc_id=401577 [ 14 ]. Federico Girosi, Robin Meili, and Richard Scoville (2005), Extrapolating Evidence of Health Information Technology Savings and Costs. RAND, page 79. [ 15 ].

"EHR: Electronic Health Records." HIMSS, http://www.himss.org/ASP/topics_ehr.asp [16]. Sanchez-DeVanny Eseverri (May 2006).

"Mexico: Amendments to The approved by Mexico's Congress"