Inequality Case briefing: Obamacare
In 1907 Theodore Roosevelt publicly advocated for increased federal involvement in the health care system. He stressed the role of externalities from ill-health. The public was made aware that most diseases were national scourges. City boards and state boards of health should be part of the ministry of Health in the National Government. Access to health care was identified as a freedom and right for the American people. In 1965 President Johnson passed the amendments of the federal Medicare and Medicaid programs, which would provide health care funding to the poor and elderly Americans (Flanagan & Weinzierl, 2015). In 1971, Richard Nixon came up with reforms that ensured universal health care, better incentives for doctors, and implemented new programs that enhanced preventive healthcare and better provision for health services (Flanagan & Weinzierl, 2015). In 1993-1994, President Bill Clinton formed partnerships with insurance companies and would contract them to provide subsidized healthcare services. In 2008, when President Barack Obama took over, he continued FDR’s universal health coverage legacy through Obamacare.
The Affordable Care Act (ACA, had universality and cost controls, where insurance companies were forced to provide insurance cover to everyone who asked for it. The prices were regulated by the government, and they were not supposed to charge patients high premiums. 80% of the premiums were to be spent improving healthcare and reducing operating costs, while 20% were the premiums’ profits. The ACA was meant to shield the consumer from rising healthcare costs. ACA subsidized health care costs by ensuring that everyone paid for insurance, or they would pay an annual penalty. Through the subsidies in insurance, it allowed many to access health care services.
Opponents of ACA believed that it was a massive budget to sustain, especially politically. They preferred a comprehensive health system that was more centralized (Flanagan & Weinzierl, 2015). ACA depended largely on the projected cost savings, which were difficult to sustain politically. ACA discouraged capital savings and wealth accumulation by taxing capital income, reducing the productivity of the economy by taxing 3.8% on unearned income.
Covid-19 pandemic is one dramatic event that brings out dramatic social changes as it affects livelihoods. With the strict Covid protocols, businesses have been forced to shut down, and many organizations have laid down their employees. Employers have no option but to support their employees, especially those infected by the virus, by paying for their hospital bills. Working from home has also cut employee’s salaries significantly, leaving employers with the burden of paying up for their employees’ healthcare costs. With most insurance companies not covering those affected by the pandemic, handling the hospital bills is shared by the employee and employer.
References
Flanagan, K. & Weinzierl, M. (2015). Obamacare. Havard Business School.