Abstract
Affordable health care has been a dire necessity for a long time. Obamacare legislation seeks to achieve affordable healthcare by making accessible insurance coverage to a large number of people. President Obama passed this legislation in 2010, and since then, the number of uninsured Americans has dramatically decreased.
However, numerous research studies have reported that Obamacare may harm the economy. This is because it is believed to have increased the cost of national spending on health care. For instance, Marketplace premiums are rising over time, and Medicaid expansion is quite expensive for the federal government.
As such, it is important to have replacement plans. Several Republicans have come up with replacement options, which have been suggested at Senate conferences. These replacement options are discussed in this paper through monetarist theory. Additionally, a statistics method has been used to offer another solution that redirects federal funds from insurance coverage to safety programs.
Introduction
Following the need for affordable healthcare and quality health insurance in the U.S., the Obamacare law was passed by President Barack Obama. This happened in 2010 when President Obama issued many provisions to make healthcare affordable and healthcare coverage easily accessible to most Americans (Crowley et al., 2020). Obamacare, or the Affordable Care Act (ACA), is centered on health insurance organizations to achieve its goals. Upon its implementation, Obamacare mandates that health insurance organizations formulate health coverage plans that suit individual categories of Americans (Crowley et al., 2020). As such, different people could assess and compare coverage plans to determine the one that best suits them.
However, some economic issues arose from Obamacare. For instance, since the law was intended to make healthcare affordable and accessible, two main topics followed. First, healthcare costs are highly altered such that the healthcare sector spends two-thirds of its funds on only 10% of patients (Crowley et al., 2020).
Secondly, there is the issue of asymmetric information, where insurers do not have as much information as patients do about their health statuses (Crowley et al., 2020). This means that patients with high-cost healthcare needs are the ones who are inclined to take insurance coverage. The two issues make achieving universal coverage in an economic-based system hard. As such, this paper offers a detailed discussion of the functionality of Obamacare while articulating the economic issues and, in return, providing replacement options with an analysis through the economic theory of monetarism. Specific replacement options can solve the financial problems of Obamacare.
Literature Review
Affordable health insurance is necessary for America; Obamacare was implemented to achieve affordable and accessible healthcare insurance. However, there is evidence that altering healthcare costs to comply with the Obamacare law has many issues (Quadagno & Lanford, 2019). As much as individual Americans have reduced healthcare spending, the federal government still finds it hard to achieve universal coverage (Quadagno & Lanford, 2019). This is because offering 100% of the population health care is quite costly.
As the Centers for Medicaid and Medicare Services reported, the average healthcare spending often amounts to at least 10 800 dollars per person yearly (Crowley et al., 2020). This is subject to an increase every year. Notably, some people receive more expensive healthcare services, usually 10% of Americans (Crowley et al., 2020). The healthy ones are estimated to be 50%, while the remaining have average health statuses. It is said that the government can cover the insurance of a healthy percentage of Americans.
However, the 10% who are unhealthy, mainly with chronic diseases, often burden the government as healthcare spending becomes excessively high (Cha & Escarce, 2022). As such, several studies show that two-thirds of the national healthcare spending goes to only 10% of Americans (Nikpay et al., 2020). Furthermore, how Obamacare functions and the legislative policies added as the years go by impact the economy of the U.S. A study looks at the economic theory of monetarism to determine the effects of Obamacare on the economy of the U.S. (Nikpay et al., 2020).
Scopes like financial security, health care spending, labor market decisions, and coverage are important considerations when determining the economic effects of Obamacare using the theory of monetarism. Replacement options like the Healthcare Freedom Act, Better Care Reconciliation Act, and Graham-Cassidy-Heller-Johnson amendment have been identified (Mahboub, 2021). All in all, there are various significant issues in Obamacare insurance that replacement options can solve.
Functionality
Coverage Packages
It is essential to look at how Obamacare works. As stated earlier, Obamacare was meant to improve healthcare costs and insurance coverage for families across America. This makes it easy for patients to buy suitable health insurance. In 2010, when the Act was passed, people were always required to carry their health insurance, but as the years progressed, this mandate was dropped in some states (Quadagno & Lanford, 2019). Also, different coverage plans were formulated and placed in other areas for people to choose from.
There are four different categories of the Obamacare insurance coverage plan. These include the bronze category, the silver category, the gold category, and the platinum category. Starting with the minor type, the bronze category has the lowest levels of health coverage among all the plans (Quadagno & Lanford, 2019). This is because a person pays the lowest monthly premium to the insurance company.
With lower premiums comes lower coverage. However, when there is a medical need, the person will incur higher out-of-pocket costs because of high deductibles. In other words, the insurance company will pay only 60% while the person pays the remaining 40% to care for their injury (Quadagno & Lanford, 2019). The bronze package is suitable for people who do not want to spend too much to cover their health because they do not fall sick often or predictably. For instance, a person may wish to use this package to protect themselves in case they have an accident.
The silver category is moderate as it has a reasonable monthly premium. The deductibles are also average; a person usually incurs lesser costs than the bronze one when they require medical attention. In this case, the person pays 30% while the insurance company pays 70% of their healthcare (Quadagno & Lanford, 2019). The silver package is suitable for people who have extra income or savings and want to put it to use or can spend a little more on a monthly premium.
The next category, the gold package, is a high package. This is because it consists of a high monthly premium. However, its deductibles are usually low since a person incurs low out-of-pocket costs (Quadagno & Lanford, 2019). When a person needs medical attention, they pay a lower fee than someone who signed up with the bronze and silver packages. In this case, the insurance company pays 80% while the person pays only 20% of their healthcare bills (Quadagno & Lanford, 2019). The gold package is suitable for people who require medical attention frequently.
Lastly, the platinum package is the highest of all the packages. It contains the highest monthly premiums and, in return, low deductibles. A person with this package incurs meager out-of-pocket costs when they require medical attention. This is because while the insurance company pays 90%, the patient only pays 10% of their medical bills (Quadagno & Lanford, 2019). The platinum package is suitable for people who require healthcare throughout their lives. For example, people with chronic diseases greatly benefit from the platinum package. Hence, Americans can choose the plan that suits their needs.
Healthcare Services Coverage
Obamacare covers certain healthcare services depending on the chosen packages. This is because some packages offer higher degree service coverage than others. But overall, Obamacare covers both outpatient and inpatient services. These include preventive care, emergency care, pregnancy or childbirth care, laboratory services, pediatric care, drug prescription care, and mental health care (Quadagno & Lanford, 2019).
Obamacare prohibits insurance companies from denying covering people who have a pre-existing condition in a case where they take a new package. For instance, if a patient was diagnosed with HIV before a new insurance plan began, the patient is not supposed to incur more out-of-pocket costs or be denied coverage. Notably, Obamacare also covers rehabilitative services, and this is one of the high-degree coverages (Quadagno & Lanford, 2019). Hence, citizens ensure that they select the plan that covers the necessary healthcare services they require.
Costs and Subsidies
The costs and subsidies of Obamacare are seen in the monthly premiums. As discussed earlier, whenever a person signs up for health coverage in an insurance company, they must keep up with the continuation of this plan by paying a monthly premium. Nevertheless, people who have low incomes may struggle to pay these premiums. As such, Obamacare, through Medicare, offers subsidies that reduce the cost of premiums to aid people with low incomes (Quadagno & Lanford, 2019). These subsidies were implemented in 2010 and are still currently active. They can also be referred to as tax credits.
Initially, when the Act was implemented, people who signed for the silver packages were the only ones who qualified for the subsidies. However, these subsidies were expanded in 2021 and went through to 2022. This was when President Joe Biden passed the American Recovery Plan Act (ARPA) through Medicaid (Quadagno & Lanford, 2019). He aimed to expand the subsidy coverage so that millions of Americans could qualify for the government’s assistance with premiums.
Digging deeper into the ARPA legislation, the Federal Poverty Level (FPL) framework determined the reduced premiums for low-income people. The FPL framework determines the poverty level of individuals or families (Quadagno & Lanford, 2019). Hence, the ARPA requires that people who fall between 100% and 150% level of the FPL guidelines will be eligible to sign the no-premium silver package.
Progressively, people who fall between 150% and 400% of the FPL qualify for a higher tax credit than the ones below them. In comparison, those who fall above 400% in the FPL were initially not eligible for federal assistance on their premiums (Quadagno & Lanford, 2019). This is because they make more money than the ones below the 400% level. However, this changed under the ARPA, and people above 400% could also experience subsidies.
Another Act was passed in 2023 to expand the Obamacare subsidies. This Act is called the Inflation Reduction Act (IRA), which should continue until 2025 (Quadagno & Lanford, 2019). It is also important to note that the ARPA passed that the Obamacare premium should not exceed 8.5% of a qualified person’s income.
Also, people who qualify for these subsidies will not be affected when premiums increase. Following the passing of ARPA, numerous research studies have shown that the rate of uninsured individuals will be reduced drastically in 2021. At least 14 million Americans who had enrolled for health insurance were assisted by these subsidies (Quadagno & Lanford, 2019). The analysis of costs and offerings shows that with the implementation of Obamacare, health insurance became more affordable for millions of Americans.
Enrollment Period
Obamacare has a specific period when individuals can choose and sign up for new health coverage plans yearly. This period is known as the Open Enrollment Period (OEP). In recent years, federal enrollment usually occurs between November 1st and December 15th every year (Quadagno & Lanford, 2019). For example, the OEP for health insurance coverage for 2023 starts in November 2022 and ends on December 15th, 2022.
However, some states have OEPs that are different from those of the federal government. In cases where the OEP passes, and one has not enrolled, they have lost their chance to experience the full Obamacare coverage and can only sign up for short-term coverage. Even so, there are some exceptional cases where, upon missing the OEP, one will still be enrolled (Quadagno & Lanford, 2019). These cases are listed as qualifying events. They include giving birth, losing a job, death, moving to a different state with a different OEP, losing current coverage, and experiencing a family event such as divorce, among others.
Pros and Cons of Obamacare
Pros
Obamacare has proven to have some significant pros for Americans and the economy in general. First, the overall goal has been achieved: to make health insurance affordable and accessible to many people. This means the probability of Americans failing to receive healthcare is significantly reduced. Insurance companies commit more than 70% of premiums to cater to people’s health care, reducing out-of-pocket costs and premiums (Quadagno & Lanford, 2019).
More importantly, tax credits have greatly aided low-income individuals as their healthcare needs are quickly handled without interfering with other significant conditions. More people enroll for healthcare insurance every year. This can be seen from a comparative study where the number of people benefitting from subsidies increased from 5 million in 2015 to 11 million in 2015 and 19 million in 2016 (Quadagno & Lanford, 2019). Hence, Obamacare has dramatically improved the affordability and accessibility of healthcare insurance and saved individuals from out-of-pocket costs.
The second benefit is that patients with pre-existing medical conditions are also eligible for insurance coverage. Therefore, patients cannot be rejected, asked to pay more, or exempted from significant health benefits. This ensures that the general public’s health is improved as there will be better health outcomes with lower mortality rates. Examples of pre-existing medical conditions include asthma, cancer, arthritis, and diabetes.
Another pro of Obamacare is that the provision of preventive care coverage also contributes to the overall well-being of Americans. They can now go for screening procedures without having to incur huge costs. Since the Obamacare implementation in 2010, at least 71 million people have utilized preventive care (Quadagno & Lanford, 2019).
The next advantage involves financial security. Many people can secure their financial abilities because healthcare is affordable and protects against considerable costs in the event of an illness. This means that Obamacare improves financial security, and one cannot suffer financially during an illness (Quadagno & Lanford, 2019). Finally, Obamacare has helped enhance the cost of prescription drugs. People with insurance coverage can now purchase prescribed medications at lower prices.
Cons
In addition to the benefits, Obamacare also brings some disadvantages. One of the most significant drawbacks is that the number of insured people keeps rising every year due to Obamacare. With this rise in numbers, insurance companies cover many people and hence are forced to increase premiums (Quadagno & Lanford, 2019). In the early days of passing the Obamacare legislation, people paid fewer premiums than they knew. The premiums were relatively low but now are very high. In other words, Obamacare has brought about an increase in health insurance premiums.
The second con is that there is a penalty for people who fail to enroll in Obamacare insurance. However, this does not apply to all states. Some states enforce this rule while the federal level does not (Quadagno & Lanford, 2019). In states where it is implemented, individuals without insurance face a significant fine or are taxed accordingly. The amount of fine or tax is determined by the period an individual goes without insurance. People also pay additional surcharges for medical devices and pharmaceutical services (Quadagno & Lanford, 2019). These taxes are meant to help fund Obamacare. Therefore, there are bound to be tax increases due to Obamacare.
Another disadvantage comes with the issue of a timed enrollment period. The OEP is scheduled for a specific period within a year; missing this period means no insurance coverage unless a severe event occurs (Quadagno & Lanford, 2019). Most people may miss this enrollment period if they are not keen and because it is usually short. Therefore, it is clear that Obamacare has some significant drawbacks.
Theoretical Analysis (Economic Theory)
When the Obamacare law was passed in 2010, there was a high expectation that the state’s economy would be impacted positively. This is due to the intended reduction in healthcare expenditures, rise in financial stability, expansion of healthcare coverage, and improvement in labor market choices. The economic theory of monetarism played a vital role in the Obamacare law (Nikpay et al., 2020).
The government plays a huge role in determining the number of funds circulating in Obamacare insurance. The theory states that the government creates reforms and then enforces that individuals and groups should act per these reforms to achieve a valuable good (Nikpay et al., 2020). In the case of Obamacare, President Obama came up with the ACA reform and enforced it on Americans, employers, and insurance companies so that upon acting according to this reform, a valuable good will be achieved. The beneficial interest, in this case, is affordable access to health care.
The government aimed to foster economic stability by increasing the demand for healthcare, forcing healthcare providers to supply healthcare services maximally (Nikpay et al., 2020). This would then increase the economic growth rate by expanding the money supply. However, the economic theory of monetarism affirms that an increasing rate of money supply leads to faster inflation, which is seen as an effect of Obamacare. Before Obamacare, it was believed that the economy was strained since the high rates of uninsured people brought about a public policy crisis. People paid high premiums and incurred high out-of-pocket costs whenever they needed medical attention.
However, as much as Obamacare has succeeded in improving the affordability and accessibility of healthcare, it is widely documented that Obamacare has not successfully reduced healthcare spending and increased financial security (Nikpay et al., 2020). Numerous research studies have reported that America is in the same economic position it was before the implementation of Obamacare. The only thing that has significantly improved is the individual market, where insurance companies provide coverage to individuals without being attached to a healthcare plan by employers or the federal government.
Otherwise, several crucial health issues still stir debates in the health economics sector in the U.S. (Nikpay et al., 2020). It is, therefore, essential to look at the economic theory of Obamacare by considering the expectations versus the reality. In doing so, coverage, healthcare spending, quality of health, labor market decisions, financial security, and healthcare accessibility are considered.
Universal Healthcare Coverage Fulfillment
Since Obamacare was implemented, healthcare insurance coverage has increased over the years. This is evident in the dramatic decrease in the rate of uninsured individuals in America. Between 2010 and 2018, uninsured individuals decreased from 15.1% to 8.9% (Nikpay et al., 2020). This means that millions of people embraced Obamacare insurance. Regarding the individual market, there was an increase in the number of people who enrolled for personal market coverage. This number increased from 11.4% to 14.1% between 2010 and 2013 (Nikpay et al., 2020).
Meanwhile, with the introduction of subsidies via Medicaid, healthcare insurance witnessed many Medicaid enrollments. Approximately 54.9 million enrolled, which increased to 61.7 million between 2010 and 2018 (Nikpay et al., 2020). However, as Medicaid coverage expanded, some states failed to enact it because it was not mandatory. In 2012, the Supreme Court ruled that Medicaid should not be required in every state. Hence, a significant number of people are without coverage.
Moreover, there are some qualifications for Medicaid since it is supposed to lower premiums for low-income individuals. This means that the quite wealthy do not qualify for this coverage. Notably, the tax credits offered in the Obamacare marketplaces may not be affordable to Americans below the poverty line. Therefore, there is a significant number of people without coverage. Between 2017 and 2018, the number of uninsured Americans was at least 2 million (Nikpay et al., 2020). From this analysis, it is seen that even though the rate of uninsured individuals decreased with Obamacare, universal coverage is still unable to be fulfilled as there is still a significant number of uninsured people.
Healthcare Spending
As stated earlier, implementing Obamacare was expected to affect healthcare spending positively. This means that the expenditures used in the healthcare sector were expected to decrease. When Obamacare was implemented in 2010, healthcare spending at the federal level was at 6.8%, but it declined to 6.4% by the time 2018 ended (Nikpay et al., 2020). A positive result was also witnessed through Medicaid. This is because spending decreased from 8.8% to 3.0% between 2010 and 2018 (Nikpay et al., 2020). Even so, there seemed to be negative results from the private sector. Instead of decreasing, the healthcare expenditure in the private sector increased from 3.5% in 2010 to 5.8% in 2018 (Nikpay et al., 2020). This led to an increase in out-of-pocket spending within the same time frame.
An increase in out-of-pocket and private spending increased national healthcare spending. This is seen in the percentage increase from 4% to 4.6% between 2010 and 2018 (Nikpay et al., 2020). Looking back at the expectations of Obamacare on health spending, some legislative actions were also taken to contribute to these expectations.
For instance, in 2020, a legislative law known as the Cadillac tax was passed and enacted on health insurance coverage through employers (Nikpay et al., 2020). This law aimed to reduce healthcare spending by increasing payroll tax revenue for the next five years. Even with this legislative law, federal spending increased because it led to delays in the execution of Medicaid and Medicare deductibles in healthcare organizations. Healthcare spending is expected to increase by at least 200 billion dollars between 2020 and 2023 (Nikpay et al., 2020). As such, there is still a negative impact on the national healthcare expenditure as it is seen to be increasing.
Labor Market Decisions
Labor market decisions are based on employment and retirement. The expectations of labor market decisions after the implementation of Obamacare were that more people would be self-employed and that there would be a significant increase in retirement. However, several studies have found that these expectations were not achieved. For example, a 2018 study reported that many older adults enrolled for Medicaid subsidies were not working full-time jobs (Nikpay et al., 2020). The opposite was seen in older adults who had not signed up for Obamacare subsidies in states where Medicaid was optional. This is to say that more people without coverage worked full-time jobs.
Additionally, many people are still determined to remain in the labor force as they deem Obamacare coverage unattractive. There is, however, little evidence on why the labor force is still flooded despite new coverage options in Obamacare insurance (Nikpay et al., 2020). Hence, conclusions can be drawn that there were few changes in labor market decisions when it was expected that there would be way better decisions, such as an increase in self-employed Americans.
Financial Security and Healthcare Accessibility
When looking at financial security, Obamacare expected to have more affordable health insurance issued to Americans. This was mainly meant to help people with serious healthcare needs that consume high costs. Such people had attested to receiving reasonable care they could not accept before Obamacare was enacted (Nikpay et al., 2020). However, with the Medicaid expansions, the monthly premiums increased slightly. This is because the Medicaid subsidies consider a person’s income to determine their eligibility. Thus, individuals’ financial security is somewhat unstable.
Moving on to healthcare accessibility, there is a considerable improvement in health insurance access. Insurance plans now offer options with high deductibles (Nikpay et al., 2020). Many individuals across the states are now able to access health care. Hence, it can be acknowledged that healthcare access has dramatically improved with Obamacare; however, an increase in financial security has not been achieved.
Health
Generally, the availability of health insurance is expected to improve health outcomes. Obamacare is no different and is expected to have significant positive health outcomes. Recent studies have reported that an increasing number of Americans enrolled in Medicaid expansion coverage have developed good health over the years (Nikpay et al., 2020). Also, Obamacare insurance has been reported to help reduce mortality rates. This is seen in a 2019 study where at least 19,000 deaths were prevented from occurring between 2010 and 2014 (Nikpay et al., 2020). However, uninsured individuals experience opposite health outcomes as they do not experience the same benefits experienced by those enrolled in marketplace coverage.
Statistical Method Solving the Economic Issue
Description
As it has been established earlier that Obamacare insurance has brought more harm than good to the economy of America, it is vital to have a solution to it. One of the most suggested solutions is to reduce the effects of Obamacare Medicaid expansion (Cha & Escarce, 2022). This expansion has provided insurance coverage for millions below the poverty line. As such, national healthcare spending has increased significantly.
To solve this problem, a statistical method known as difference-in-differences regression is used to show the effects of Medicaid expansion and to suggest a reduction in the burden of national healthcare spending (Wing et al., 2018). As such, a safety program, the Supplemental Nutrition Assistance Program (SNAP), is used as the quality control to observe the changes (Cha & Escarce, 2022). This method shows that the federal government can adopt a policy that utilizes safety programs to cater to health determinants such as hunger. These determinants would otherwise affect health and increase the need for healthcare, hence the need to eliminate them by supporting such programs.
Method
The method involves collecting sociodemographic data from a few households in different states and investigating how the SNAP members are doing. This study will be carried out over three years (Wing et al., 2018). Also, the number of people who have signed up for Obamacare Medicaid expansions in the chosen states will be documented. The difference-in-differences regression comes in when estimating the impacts of Medicaid expansion on SNAP outcomes. The linear regression equation is used (Wing et al., 2018). The coefficients are the income earned in each household, while the variables are the number of participants in SNAP.
Discussion
In as much as the statistical method targets low-income households, it is undeniable that Obamacare Medicaid expansion was also expected to help low-income Americans. The method is interested in finding out that the low-income earners who enroll in Medicaid expansion coverage are the same people likely to participate in SNAP (Cha & Escarce, 2022). This means that people below the poverty line, according to FPL, are often quite familiar with safety programs. This finding is attributed to nutritional assistance being precious among low-income individuals (Cha & Escarce, 2022). Ultimately, the problem of increased national healthcare spending through costly insurance coverage can be solved by focusing on programs that prevent health deterioration.
Replacement Options
With the economic issues presented and the interpretation from the difference in difference regression, it is necessary to develop a replacement option for Obamacare. While efforts have been made to try to change the ACA, it has not been entirely replaced because the replacement options might still face some challenges (Mahboub, 2021). American Republicans have been reasonably determined over the years to replace Obamacare. This is because they deem that Obamacare is highly costly and has adverse effects on the health insurance market.
Hence, Republicans believe that Obamacare insurance is taking a toll on the economy of the U.S. (Mahboub, 2021). Such arguments suggest that efforts to improve or change Obamacare would be futile. Instead, republicans insist that its replacement is the only viable option. Creating an appropriate replacement option for Obamacare means serious trade-offs must occur. This is because the main goal of the replacement is to reduce costs and remove government controls in the insurance market (Mahboub, 2021). Hence, the trade-off will likely increase the uninsured rates since coverage rates will drop.
There is also likely to be an end to the valuable services that Obamacare provides. For instance, covering pre-existing health conditions and some healthcare services like screenings would be no longer necessary. The Republicans also detest the idea of people signing up for healthcare coverage and their employers being responsible for providing it (Mahboub, 2021). Additionally, tax credits for people below the poverty level mark have been detested, as well as the coverage standards. In all these, it can be seen that the crucial and popular components of Obamacare insurance have been hated, and they bring a dire need for its replacement.
Graham-Cassidy-Heller-Johnson Amendment
This option was proposed to repeal the structure and design of Obamacare. This happened in September 2017 when several U.S. republican senators revealed their replacement proposal. The senators include Lindsey Graham, Bill Cassidy, Dean Heller, Ron Johnson, and Rick Santorum (Chen, 2018).
The replacement proposed by the five senators is a market-based program. It will involve a short-term block grants program where people will be assisted in paying for their health care needs. A block grant can be defined as a specific amount of funds issued yearly by the federal government to a state or local government aimed at facilitating a particular program.
The estimated cost for this program is 1.176 trillion dollars in an estimated seven years (Chen, 2018). This cost would cater to block grants, saving the federal government from regular spending on marketplace premiums, subsidies, and the expansion of Medicaid. To enforce this amendment, every state will be made mandatory to choose a block grant sum every year.
Failure to do so will mean that the people in that state will not qualify to receive any funds to help them with their insurance coverage. In other words, the block grant funds are meant to replace the federal funds used to pay for insurance packages, Medicaid expansion, and subsidies in Obamacare. Another issue that Graham-Cassidy-Heller-Johnson seeks to replace is the unfair distribution of funds in different states. It is not unheard of to find that only three states take up about 40% of Obamacare funding without considering their population (Chen, 2018).
For example, Pennsylvania is a state that has a huge population compared to Massachusetts, yet Pennsylvania could end up getting a more significant percentage of Obamacare funds than Massachusetts (Chen, 2018). Other reforms include eliminating Planned Parenthood funding and raising the limits for the yearly tax-free contributions. This helps individuals to save more on their Health Savings Accounts (HAS). Overall, the Graham-Cassidy-Heller-Johnson amendment focuses on replacing federal spending with block grants.
Better Care Reconciliation Act
The Better Care Reconciliation Act ( BCRA) was first drafted in 2017. This draft was then revisited and revised within the same year. The BCRA Act seeks to repeal the Obamacare mandates and cost-sharing subsidies. In doing so, several reforms were brought up by the senate republicans and led by the majority leader Mitch McConnell (Béland et al., 2018).
First, it is proposed that more assistance be issued to cover out-of-pocket costs. This would be achievable by reducing premiums and utilizing Health Saving Accounts. Hence, it was suggested that 70 billion dollars should be added to the state’s funding (Béland et al., 2018). This is seen as a lucrative idea to assist individuals in covering their health care costs. The second proposal further emphasizes Health Saving Accounts. To help many people cater to their healthcare costs, BCRA offers a solution that enables Americans to utilize health savings accounts to pay their monthly premiums. With such a reform, there is expected to be an increase in the number of people covered.
The next reform is based on revising Medicaid funding. The federal Medicaid funding will be replaced with per capita allotment, reducing national health care spending. This means that the calculations will be based on uninsured individuals instead of calculating the medical Consumer Price Index (CPI) rate based on Medicaid-enrolled individuals (Béland et al., 2018).
Most importantly, the plan involves making insurance optional rather than mandatory, as seen in Obamacare. This ensures that individuals who do not need insurance or cannot afford it are not forced into purchasing it. Therefore, employers and individuals will not be penalized for failing to enroll in insurance coverage. Thus, BCRA is a better replacement option for Obamacare mandates and cost-sharing subsidies.
Healthcare Freedom Act
The Healthcare Freedom Act is also a replacement option for Obamacare. This plan seeks to solve the main problem of healthcare debts, hence the name healthcare freedom. This Act was proposed in July 2017 by U.S. Senate Representative Chip Roy (Seervai & Blumenthal, 2018). The Act focuses on transforming Health Savings Accounts into health freedom accounts. Health saving accounts are good because they allow people to save untaxed money. However, only people enrolled in insurance plans with high deductibles can keep on these accounts.
There are also several other limitations before one can save on these accounts. However, with health freedom accounts, there are no limitations on who is eligible to save money for future medical costs. As inflation rates continue to increase in the economy of America, healthcare costs are bound to increase as well (Seervai & Blumenthal, 2018). Therefore, American individuals must have greater freedom over their healthcare costs. With this reform, the medical services included in the Obamacare insurance will be paid for the money in the health freedom accounts. The out-of-pocket expenses will decrease, and more flexible health insurance coverage plans will be available.
Conclusion
In conclusion, Obamacare law was intended to facilitate affordable and accessible health care. Over the years, the law has proven to have many benefits, as millions of Americans are insured. However, the economic impacts of Obamacare have been reported to be detrimental. This is mainly because of increased national spending on healthcare, as explained by the economic theory of monetarism. To address this issue, the difference-in-differences method describes how the government can redirect its funding to the root course of the situation by supporting safety programs. In this regard, it is reasonable to adopt the Graham-Cassidy-Heller-Johnson Amendment, which is more comprehensive and inclusive without the multiple shortcomings of Obamacare.
References
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