Reasonsfor Regulating Healthcare Costs
Reasonsfor Regulating Healthcare Costs
Intheir book, Shi and Singh (2015), purports that healthcareis an essential to every human being and therefore should beaffordable. They document that health issues can never be predictedand they must be dealt with immediately they arise even if money is achallenge. It is therefore a necessity for all the United Statescitizens (Shiand Singh, 2015). Inthe U.S, medical cost is constantly rising and this is substantiallyaffecting the citizens especially the low-income earners (Brent,2014). Expensive health care is the beginning of many problems in thecountry and needs to be reviewed extensively including throughcontrolled costs.
Rising cost of health care andincreasing insurance premiums has made it difficult for families tomeet their health needs. People are therefore forced to live on thelittle amount left, which is not even enough to cater for their dailyneeds. In most cases, average families in America struggle to keeptheir members healthy. Individuals who are self-employed and have topay for medical care from their pockets are finding it hard to do sosince it is very expensive. Healthcare growth is affecting financesof the American families and should be controlled to make livingaffordable (Shi,& Singh 2015).Poverty eradication is becoming uneasy with the rise in medical fees.
Correspondingly, employers inthe private sector bear a burden because of the rise in healthcare. They are forced to pay more so that they can provide health insuranceto their workers. Higher insurance premiums lower profits inorganizations. To increase returns, employers have resorted torelieving workers of duty and increasing labor hours of the remainingemployees. In this view, the high cost of health has led tounemployment in the United States while some individuals are beingoverworked without any privileges. As the increased health care costleads to decrease in wages by employers, workers are rendered weak toafford other life necessities. The decrease in wages makes workers toconsider quitting their jobs.
Rising health cost changes thestructure of nation’s labor markets. Because the system providesuneven benefits among firms, it makes the availability of healthinsurance a more important factor in choosing a job. Such a featureincreases the workers` mobility between organizations. In doing so,it limits the flexibility of the labor market in responding to newchallenges and opportunities (Brent, 2014). Health benefits have beenreduced by the employers and therefore it is necessary that theexpensive cost of medical care to be controlled.
The public sector has likewisebeen affected by the health care cost since it is rising faster thanthe national revenue. To cope with this, the government is forced toincrease incomes by raising taxes, borrowing more, and curbingspending. Higher taxes reduce the amounts that firms and householdscan use on investments and savings. Similarly, when the governmentborrows to pay for health care, there is an equivalent rise ininterest rates. An increase in the cost of capital reduces theability of firms or household to acquire resources. Rising in pricesmakes the state to further cut its spending on medical and othersectors such as transport and education which are equally importantfor economic growth (Shiand Singh, 2015).Control of health care cost is necessary so that the government isable to sustain economic growth.
Rising healthcare cost is anenormous burden for United States businesses. It is a mandate thatthe American companies must compete with others in differentcountries even if their health care cost is lower. At the same time,manufacturers are in hard situation competing with foreign companiesthat have lower healthcare costs. However, health care is the mostimportant element of cost for manufacturers. As a result, risingcosts of health care reduces the competitiveness of U.S globally andgives it poor ranking (Pope,2013). Countries nameis therefore not well portrayed.
Increased health cost leads toa large deficit in the federal budget. Federal borrowing affects theeconomy significantly because it cuts private savings that wouldotherwise be invested. Additionally, Federal borrowing reduces thecompetitiveness of America. Healthcare cost needs regulation so thatthe level of borrowing can decrease and in return give way to a risein the value of the dollar. The affordable care act will make asignificant difference by increasing the number of individuals withhealth insurance protection (Shiand Singh, 2015).Low deductible insurance plan should be introduced so that everybodycan afford medical care. People should be educated on how theseinsurance work and information about saving option that helps afterretirement.
Health is the most importantfeature to every individual. It should be made affordable to allcitizens so that they can live a comfortable life. High cost hasreduced many people’s access to medical care. Rising healthcarecosts have adversely affected the United States economy, businesses,and even the government. It presents a growing burden to middle-classfamilies. The rise in health care cost is barring necessarypriorities such as saving for school fees and retirement .if thistrend is not stopped, people who have been in the middle class alltheir working years risk having less money to maintain theirlifestyle after retirement.
Brent,R. J. (2014). Cost-benefitanalysis and health care evaluations.Topof Form
Pope,C.M., (August9, 2013). LegislatingLow Prices: Cutting Costs or Care?Retrieved on Oct 17, 2016.
Shi,L., & Singh, D. A. (2015). Essentialsof the US health care system.Jones & Bartlett Publishers.