Economics Economics

  • Uncategorized

Economics

Economics

Theescalation in the cost of care has attracted the attention of allrelevant stakeholders. This health issue calls for the application ofall relevant economic concepts and theories. The exponential increasein the cost of care and the lack of adequate funds to support thehealth systems have been attributed to several factors. These factorsinclude the increase in the beneficiaries of public health programs,population aging, and tax flaws (Anderson, 2014). In this paper themotivation of the nursing career by IRS’s credits, solution toMedicare crisis, and the effects of tax flaws on federal deficit willbe discussed.

IRS’sTax Credit and the Motivation of Nursing Career

Thehigh cost of the education is among the key factors the discouragepeople from pursuing health-related professions, such as nursing. Inaddition, the high cost of continuing nursing education discouragesmany nurses from advancing their career by undertaking professionalcourses after their certification. To this end, the tax credits givenby IRS serve as extrinsic rewards that motivate nurses to advancetheir career by pursuing additional courses. For example, nurses whohave earned certificates are allowed to deduct courses that arework-related as well as seminars as long as they meet specifiedrequirements (Steber, 2016). This is an indirect way of reducing thecost of pursuing additional knowledge. It encourages nurses to seekfor knowledge that can improve their practices from all availablesources.

Solvingthe Current Medicare Crisis

Medicareis a significant public institution that has benefited millions ofpeople since its establishment in 1965. However, the organization hasfaced a serious crisis in recent past following the increase in thenumber of beneficiaries as well as the age of the people who dependon it for support in the health care services. These demographicissues have increased the demand for more money in order to cover allhealth needs of the Medicare’s clients. It is projected thatMedicare will become insolvent by the year 2028 if nothing is done toaddress its financial crisis (Arron &amp Butler, 2015). There areabout four strategies that can be used to resolve this crisis. First,the government can raise Medicare premiums for the beneficiaries whoare classified as high income earners. According to Arron &ampButler (2015) an increase in the premiums paid by individualbeneficiaries with an annual income of more than $ 85,000 andhouseholds that earn above $ 170,000 by 15 % can address the currentfinancial challenges that Medicare is facing.

Secondly,the development of strategies that enhance competition among theinsurance providers and health care facilities can reduce the cost ofcare. The government can achieve this objective by changing Medicarefacility to the premium supported health plan. In other words, newbeneficiaries will receive their coverage through the privateinsurance agencies. They will have an opportunity to select among thecompeting plans while the federal government will make a fixedcontribution to the private plans (Arron &amp Butler, 2015). Thiswill be the easiest way to put the Medicare in a long-term budget.

Third,the drug manufacturers should be required to give discounts andprovide rebates to Medicare. Under the current laws, pharmaceuticalcompanies are required to give rebates to Medicaid programs, but notto Medicare for prescription drugs that are bought by beneficiaries(Arron &amp Butler, 2015). It is estimated that the introduction ofsimilar measures will help Medicare save about $ 112 billion withinthe next one decade. Therefore, rebates and discounts will reduce therisk of insolvency.

Fourth,the government can raise the cost sharing for skilled nursing, homehealth care, and laboratory services. Under the current Medicarerules, beneficiaries are not charged for the first 20 days of theirstay in skilled nursing facilities and laboratory services (Arron &ampButler, 2015). The lack of financial charges has resulted in themisuse of these services, thus increasing the Medicare annual budgetexponentially. The imposition of the financial charges will ensurethat these specialized services will be consumed by beneficiaries whodeserve to access them, thus reducing wastage.

Effectsof Tax Flaws on Federal Deficits

Thetax flaws have contributed towards an increase in federal deficits bygiving companies an opportunity to deduct huge CEO salaries and otherbenefits. Under the corporate tax rules that existed prior to theenactment of Obamacare, companies were allowed to deduct millions ofdollars that were given to their CEOs in the form of performance pay(Anderson, 2014). This denied the government an opportunity to makerevenue from the wealthy ECOs. For example, the $ 20 million paid toAngela Bray, the CEO of WellPoint, in 2012 was classified as adeductible payment, which made the federal government lose a lot ofrevenue (Anderson, 2014). The fact that Obamacare increased thecombined CEO’s bills by $ 72 million is an indication of how muchthe government has been losing due to tax flaws. The amount lost eachyear increases the deficit since the government has to rely on thetaxes paid by low income earners to deliver health care, among otherservices.

Conclusion

Thetax credits given by IRS motivate nurses to seek for knowledge thatcan advance their competence through educational courses andseminars. Medicare crisis can be addressed through measures that seekto enhance cost sharing and raise more funds from rich beneficiaries.The tax flaws that existed prior to Obamacare denied the governmentan opportunity to collect revenue from the rich CEOs, thus increasingfederal deficit.

References

Anderson,S. (2014, August 27). How Obamacare can end bloated CEO pay. Fortune.Retrieved October 12, 2016, fromhttp://fortune.com/2014/08/27/how-obamacare-can-end-bloated-ceo-pay/

Arron,J. &amp Butler, S. (2015). Thefuture of Medicare: 15 proposals you should know about.Washington, DC: American Association of Retired Persons.

Steber,M. (2016, June 24). Tax tips for healthcare professionals. TheHuffington Post.Retrieved October 12, 2016, fromhttp://www.huffingtonpost.com/mark-steber/tax-tips-for-healthcare-p_b_10661312.html

Close Menu