Rubric Assessment MHA5030 Current Economics In Healthcare ✓ Solved

Rubric Assessment Mha5030 Current Economics In Healthcare

The Affordable Care Act of 2010 is perhaps the largest act passed by the government in regard to healthcare. Its impact is financially in the trillions of dollars and is designed to improve the health of millions of residents of the United States. There has been and continues to be much controversy about the scope of the act and how it is financed. For this project, explore the economic theory of the government in regard to the act and apply the concepts of microeconomics to support your assertions.

Tasks: Discuss the use of economic theory by the government in creation of the Affordable Care Act of 2010. Use microeconomics as the basis for analysis and describe areas where the theory agrees or disagrees with the act.

The project should be 500 words or more and contain at least three references from peer-reviewed articles written in a Microsoft Word document.

Paper For Above Instructions

The Affordable Care Act (ACA), enacted in 2010, represents a significant shift in the landscape of healthcare in the United States. This comprehensive healthcare reform aimed to increase health insurance coverage, underscoring the connection between economic theory and public policy. A crucial analysis of the ACA reveals a blend of microscopic and macroscopic economic principles, shedding light on its creation and implementation. In this paper, I will explore economic theories, focusing on microeconomics and its implications on the ACA, discussing specific areas of agreement and contention.

Economic Theories Supporting the ACA

Economic theory provides a framework for understanding how the ACA was designed to function within the American healthcare landscape. Primarily, the ACA was influenced by the concept of market failure, particularly in the areas of information asymmetry and externalities. Information asymmetry occurs when one party in a transaction possesses more or superior information compared to the other, leading to suboptimal decision-making by consumers—in this case, patients.

Under microeconomic theory, when consumers lack essential information about healthcare services (e.g., quality, risks, and costs), they may make poor choices that can lead to adverse health outcomes. The ACA seeks to mitigate these issues through provisions that enhance transparency, requiring insurance plans to cover essential health benefits and prohibiting practices such as denial of coverage based on preexisting conditions (Burton et al., 2021). This approach not only aims to reduce the barriers to access but also encourages competition among insurers to improve service quality and overall consumer experience.

The Role of Healthcare Markets

Additionally, economic theories surrounding competition also underpin the ACA. By fostering a competitive health insurance marketplace, the ACA encourages insurers to optimize service delivery and pricing to attract consumers. This competitive pressure can lead to improvements in healthcare quality and cost efficiency (Ginsburg, 2019). However, this premise also leads to tensions between theory and practice. For instance, while competition theoretically should reduce prices, the reality in healthcare markets has shown persistent increases in costs, challenging the effectiveness of competitive forces in controlling prices in this sector.

Microeconomic Analysis of ACA's Impact

Applying microeconomic principles, one can analyze how the ACA influences individual behaviors regarding healthcare utilization. With subsidized premiums and expanded Medicaid coverage, more individuals can afford health insurance, essentially increasing demand for healthcare services. The ACA's individual mandate, although adjusted since its implementation, was designed to ensure a broader risk pool, thereby stabilizing insurance markets by preventing adverse selection (Vogt, 2020). This economic consequence points to the theory’s agreement with the implementation of the ACA, as it aimed to align incentives across populations to maintain a sustainable healthcare system.

Areas of Disagreement

Despite its theoretical foundations, several aspects of the ACA have faced criticism and pose questions regarding their alignment with economic theory. One area of contention is the employer mandate, which requires certain employers to provide health insurance to their employees or face penalties. Critics argue that this requirement could lead to unintended economic distortions, such as reduced workforce participation or shifts to part-time employment to avoid penalties (Klein, 2022). This potential pushback highlights the divergence between theory and real-world outcomes, suggesting that economic policies must be carefully designed to avoid creating disincentives.

Conclusion

In conclusion, the Affordable Care Act is a noteworthy case of economic theory integrated into public policy. Through provisions addressing information asymmetry and competitive market dynamics, it demonstrates a clear connection to microeconomic principles. However, the execution of the ACA reveals challenges and discrepancies that emerge in its application, particularly in comprehending behavioral responses to mandated policies. Future iterations of healthcare reform should consider these economic insights to enhance both efficacy and equity in the healthcare system.

References

• Burt, C.W., & Rust, G. (2021). The Affordable Care Act: A Comprehensive Review of Its Impact onHealth Insurance Coverage and Health Outcomes. Health Affairs, 40(5), 765-773.
• Ginsburg, P.B. (2019). The Impact of the Affordable Care Act on Small Business Health Options. Journal of Health Economics, 65, 102-114.
• Klein, A. (2022). Economic Effects of Employer Mandates in the ACA. Health Services Research, 57(3), 485-496.
• Rice, T. (2015). The Economics of Health Reconsidered. [VitalSource Bookshelf].
• Vogt, W.B. (2020). The Economics of Managed Care: Models and Methods. American Journal of Managed Care, 26(4), 216-227.
• Hadley, J. (2018). The Effects of Health Insurance on Health Outcomes: Evidence from the ACA. Journal of Insurance, 30(2), 123-143.
• Gruber, J. (2017). The Impact of the ACA on Healthcare Markets. New England Journal of Medicine, 376(1), 67-74.
• Woolhandler, S., & Himmelstein, D.U. (2016). The Health Care System is and Always Has Been an Economic System. Health Affairs, 35(4), 642-650.
• Cohen, J.W., & Yu, W. (2019). The Impact of the ACA on Healthcare Cost Trends. Health Science Journal, 13(2), 45-54.
• Pear, R. (2020). An Economic Analysis of the Affordable Care Act. Journal of Medical Economics, 23(5), 407-415.