Cannon Cottle The Affordable Care Act

ECON 1010

Math and simple arithmetic are skills that all of us are required to learn and are used to prove ourselves at an early a e! "e are also tau ht that if #e are iven a quarter and #e spend that quarter$ #e have no money left to spend! "e are not tau ht that if #e have no money left #e should make another quarter or borro# one from someone else$ nor are #e tau ht that %& ' & ( )* if you #ait lon enou h and pull a %1* from some other equation! As ironic and silly as these e+amples seem$ they are the basis of the financials to the Affordable Care Act ,formerly kno#n as %Obamacare*-! The Affordable Care Act #ill be detrimental to the ./ economy by raisin healthcare costs and subsequently hurtin the ./ medical market! This means fe#er dollars in the avera e citi0en1s pocket$ leadin to a decrease in business bein done #hich means less ta+es bein paid! "hen less money is bein transacted$ the ./ economy fails! To lay a foundation$ the Affordable Care Act is a la# that #as passed back in &010 to help #ith the costs associated #ith health insurance! This la# is aimed at lo#erin annual premiums and other health care costs$ eliminatin the %pre2e+istin condition clause*$ and helpin the elderly and poor to have a health insure at an %affordable price*$ all #hile creatin more 3obs in the market ,4ealth and 4uman /ervices$ &015-! "hile the description of #hat this la# is aimed to accomplish may seem very a reeable$ the problem arises #hen you try to continuously pay for all of these services! Traditionally$ the health insurance market has been mostly privati0ed$ run by competin companies tryin to et the avera e citi0en1s dollar! The health insurance market #as somethin comparable to the car insurance market #here you have companies like All /tate$ 6eiko$ /tate 7arm and others tryin to et you to choose to

Cannon Cottle The Affordable Care Act

ECON 1010

use them to insure your automobile or motorcycle! 8t is a competitive market! They ad3ust your premium and deductible ,ho# much you pay upfront each month$ and ho# much you pay per year- based on your drivin record$ cost of your car and other factors! 8f you are deemed too hi h of risk$ they have the ri ht to say they #on1t insure you9 essentially they don1t #ant to invest their money in you because you are likely to have an accident and they #ill lose money! This concept of bein able to refuse a person interested in purchasin insurance makes it so the insurance company can be profitable! 8nsurance companies make money by havin a lar e roup of people pay in every month and only havin a small roup require the service of insurance! /o insurance companies need to pick their %investments* or clients carefully! 8f they had to insure everyone despite drivin records$ cost of car and all of the other variables their dollars #ould be at risk and they #ould either o out of business or be forced to make each client pay more each month! The basic business and economic principles of the health insurance market are very similar to the auto insurance market! 4ealth insurance providers need to carefully pick #ho they insure$ or at least #hat they #ill char e them in order for the business to function and for them to continue to be able to provide insurance for their other clients! The ACA #ants to take this privile e a#ay from health insurance providers$ or at least mandate #hat covera e they have to supply to each client! The ACA aims at forcin

companies to provide the best covera e possible to everyone$ and #hile this sounds reat$ someone needs to pay for it! /ince the health insurance provider cannot keep its doors open if it eats all of the costs$ then it #ill pass it on to the consumer! This presents a fundamental problem #ith the bill! 8t #as aimed at lo#erin health care costs

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Cannon Cottle The Affordable Care Act

ECON 1010

but demands better covera e! 8n order to et better covera e the cost for health insurance must then increase$ #hich no# makes healthcare more %unaffordable* than it already #as! This is #hy healthcare costs ,premiums- are set to rise in 51 states includin "ashin ton :!C! by an avera e amount of 51 percent ,;oy$ &01<-! /ince healthcare costs are then oin to rise by an avera e of 51 percent$ ho# are the people that the bill #as desi ned for$ the people that couldn1t already pay for health insurance$ supposed to pay for it= /imple$ have someone else pay for it! This concept$ takin money from someone else to pay for somethin that you could not afford$ is kno#n in overnment as a subsidy! The ACA addresses the problem of the spike in healthcare premiums by offerin overnment assistance$ to those #ho qualify$

to help lo#er the cost of health care ,;oy$ &01<-! This discount provided to that specific consumer doesn1t mean the price of the healthcare they are provided #ith is actually any less e+pensive$ the overnment is 3ust usin ta+payer dollars to help that person pay for their nice covera e! This seems fine$ but then the overnment can1t afford to tack on this monthly bill every month$ of every year$ forever! Therefore$ they pass that cost back onto you throu h hi her ta+es! One of these ta+es is the %Medical :evice Ta+*! Accordin to the "ashin ton Time$ this &!< percent ta+ on ross revenue caused three quarters of companies in the industry to defer or cancel raises and promotions! 8t also killed <<$000 3obs$ 15$000 of #hich #ere laid off because companies could not afford to pay them and another 1>$000 #ere not hired because of the ta+ ,Tom 4o#ell$ &015-! This means that the cost of medical oods #ill rise and then so #ill the costs to the consumer! 8f the market cannot bear the current prices$ it #ill raise those prices to

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Cannon Cottle The Affordable Care Act

ECON 1010

stay afloat! And #ith a market like healthcare #here the consumer1s life literally depends of receivin the product$ they #ill have to pay these hi her prices! 8f prices continue to rise$ then so #ill the ta+ have to rise to keep up #ith the hi her costs! Eventually these hi her costs #ill be trickled do#n to the consumer throu h everythin they buy! The ACA demands that every employer provide every full time employee #ith comprehensive healthcare covera e ,4ealth and 4uman /ervices$ &015-! This type of covera e is e+pensive and most companies cannot afford to carry this cost$ so they #ill either have to raise their prices to keep their doors open or they #ill have to cut employees to part time or fire them all to ether! These unemployed are no# eli ible for the overnment subsidies$ to pay for their health insurance$ #hich they #ere 3ust fired for! The cost of this redistribution of #ealth and deferrin e+penses compounds e+ponentially and is circular! "ith hi her unemployment$ the .!/! economy ro#s uneasy and businesses are less likely to invest or spend money! ?ess money is bein transacted! "ith less people employed there are less people out there spendin their dollars$ #hich means the businesses see a do#nturn! "hen both businesses and private citi0ens are seein less dollars in their pockets they have less money to pay in ta+es$ and #ith no ta+es the overnment cannot afford to subsidi0e the unemployed! 8n a recent C@/ article it #as estimated that the ACA #ill cost the .!/! economy over & million 3obs in the comin years! This is because the bill$ #ith all of its %free* perks and crutches to help the poor et alon $ actually incentivi0e people to not #ork ,Condon$ &015-! 8t becomes easier for people to stay unemployed and collect a paycheck from the overnment each month and have their food$ housin and phone bills paid for throu h overnment subsidy pro rams!

Cannon Cottle The Affordable Care Act

ECON 1010

The Affordable Care Act is anythin but affordable! 4avin premium health insurance comes at a price! Traditionally$ if someone #anted comprehensive covera e they #ould have to bud et and save for it or they #ould have to et skilled enou h to find an employer that #ould provide it for them! The #ay the healthcare market used to be set up offered incentives for insurance providers to compete for each dollar they earned! No# they are forced to inflate costs to pay for those #ho did not bud et! 8t destroys$ at a fundamental level$ one of the bi est revenue enerators in the .!/!

market! Alon #ith all of these ne atives$ the Affordable Care Act$ iven enou h time$ #ill ta+ every dollar to the point that it is no lon er affordable to have a business or a 3ob$ but rather$ rely on the state! The ACA is a price raiser$ ta+ inflator and a 3ob killer! The Affordable Care Act is bad for the .!/! Economy!

"orks Cited
Condon$ /! ,&015$ 7ebruary 5-! CBSnews! ;etrieved from C@/ne#sA httpABB###!cbsne#s!comBne#sBobamacare2#ill2shrink2#orkforce2by2&2million2report2 saysB 4ealth and 4uman /ervices! ,&015$ April C-! About the Law! ;etrieved from hhs! ovA httpABB###!hhs! ovBhealthcareBri htsB ;oy$ A! ,&01<$ November 5-! Forbes.com/theapothocary! ;etrieved from 7orbes!comA httpABB###!forbes!comBsitesBtheapothecaryB&01<B11B05B5>2state2analysis2obamacare2to2 increase2individual2market2premiums2by2av 2of2512subsidies2flo#2to2elderlyB Tom 4o#ell$ D! ,&015$ 7ebruary &<-! Washington Times/ Politics! ;etrieved from The "ashin ton TimesA httpABB###!#ashin tontimes!comBne#sB&015BfebB&<Bobamacare2 medical2device2ta+2led2to2loss2of2<<0002B