One of the top major issues in this 2016 presidential election between the Democratic Nominee Hillary Clinton against the republican nominee Donald Trump how to improve the US Healthcare system. Both Presidential candidates have suggested distinctly different approaches to reform current health care system known as The Patient Protection and Affordable Care Act which is a comprehensive health care reform law enacted in March 2010 by President Obama. Mrs. Clinton agenda is to work with the existing ACA framework of as well as expanding the benefits. Contrary to her proposal Mr. Trump agenda is to completely repeal Obamacare Act, and replace it with Market-Driven Health Care System also known free market approach as well as patient-centered
…show more content…
For example Physicians know a lot more about the condition, prognosis and diagnosis to cure than individual, From an economics perspective the physician’s objective function is to sell as much as goods he can sale, in the case conducting more unnecessary test and diagnostics and over prescribing medications. On the other hand Patients know more about their own health status than insurers, so the people who are willing to buy coverage are the less health people, and in these scenario insurers have to price the coverage based on the average cost among all consumers in the market. For example lest assume there is 10 people are in the market with different health status three are very sick and 4 are healthy and other three are in the middle in this case if the insurance cost $ 12, 000 then the healthy individuals will chose not to buy coverage since the cost is be greater than the benefit they receiving, so only the less healthy people are in the market and insurers will increase the average to even $ 20,000 in order to stay in market. Either of these features can lead to adverse selection in insurance markets, which can cause market to collapse (no stable long-run equilibrium exists) or can cause deadweight losses in market. The solve this issue The Patient Protection and Affordable Care Act required everyone to have health insurance , and bring the more healthy individuals to market to lower the cost, it also bans that insurers cannot deny people base on pre-existing conditions, age, or gender. If Obamacare Act is repealed cost will increase significantly in every way and society will lose the leverage to negotiation to reduce the cost of health care, and only sick people will be in the
For example Physicians know a lot more about the condition, prognosis and diagnosis to cure than individual, From an economics perspective the physician’s objective function is to sell as much as goods he can sale, in the case conducting more unnecessary test and diagnostics and over prescribing medications. On the other hand Patients know more about their own health status than insurers, so the people who are willing to buy coverage are the less health people, and in these scenario insurers have to price the coverage based on the average cost among all consumers in the market. For example lest assume there is 10 people are in the market with different health status three are very sick and 4 are healthy and other three are in the middle in this case if the insurance cost $ 12, 000 then the healthy individuals will chose not to buy coverage since the cost is be greater than the benefit they receiving, so only the less healthy people are in the market and insurers will increase the average to even $ 20,000 in order to stay in market. Either of these features can lead to adverse selection in insurance markets, which can cause market to collapse (no stable long-run equilibrium exists) or can cause deadweight losses in market. The solve this issue The Patient Protection and Affordable Care Act required everyone to have health insurance , and bring the more healthy individuals to market to lower the cost, it also bans that insurers cannot deny people base on pre-existing conditions, age, or gender. If Obamacare Act is repealed cost will increase significantly in every way and society will lose the leverage to negotiation to reduce the cost of health care, and only sick people will be in the