The Economic Impacts of Obamacare

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I. Introduction In 2010, President Barack Obama announced that he would begin implementing the largest, most comprehensive, and possibly the most controversial reform of the United States healthcare system in the past decade. Dubbed the Affordable Care Act, or “Obamacare” as it has become known, this new piece of legislation seeks to reduce the number of uninsured citizens in the United States by mandating that all people have access to healthcare and are required to purchase it (Gruber, 2010). It also seeks to lower Medicare spending costs through a verity of new taxes. The hope is that the new bill will help the 32 million current Americans that are uninsured, and will hopefully raise revenue for the government to begin reducing the overall deficit (Gruber, 2010). In this short paper, we will first take a look at the current/past system, and identify some of the main reasons for the proposed changed, next we will look into the specifics of the Affordable Care Act and how the government plans on financing the new project, then we will analyze the economic effects of the act, both long and short term, and finally we will assess how the new act will affect the people and companies in the United States. II. The Past System After his inauguration in 2009, President Barack Obama vowed that one of the first items on his political agenda was a massive and comprehensive reform of the current healthcare system in the United States. Healthcare accounts for almost 17% of the total gross domestic product in the United States, and is expected to keep growing (Gruber, 2010). Before the act was signed in, the main source of insurance for healthcare coverage is employer-sponsored insurance plans (ESI). This was completely optional ... ... middle of paper ... ...tantly, they would want a plan that has maximum coverage. So what does this have to do with the average healthy consumer who receives employee sponsored health insurance? The main issue is the fact that many consumers will see a decrease in health coverage from their employers, due to the firms wanting to avoid this tax. This raises the deductible for consumers, and therefore increases their personal expenses as a result of the ACA. Healthcare reform is one of the largest potential changes in United States policy in over 100 years, and the issue is hotly debated from both sides. If fully implemented, it has the potential to transform and reshape the healthcare system for years to come. Unfortunately, it is extremely hard to predict the economic effects of the act because each side has sound economic arguments both for and against the Affordable Care Act.

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