Healthcare Policy Case 2

Answer

Healthcare Policy Case 2

            The US is one of the countries constantly experiencing a rise in cost of healthcare. Notably, the cost of healthcare spending in the region has increasingly risen to over 31-fold in the past decade, thus illustration the constant rise in healthcare costs (Kamal et al., 2020). This paper provides an evaluation of the reasons why the costs of healthcare are constantly rising in the US.

Reasons for the Constant Rise in Healthcare Costs in the US

            The cost of healthcare service in the US is constantly on the rise mainly due to the prevailing government policy on health insurance. Since the Medicaid and Medicare programs were established with the primary aim of assisting non-insurance holders access quality healthcare, the providers took advantage of the situation to increase healthcare prices (Liu et al., 2017).  Liu et al. (2017) further asserts that the cost of healthcare is constantly rising as a result of insurance coverage expansion, mainly as a result of the coverage benefits generosity and the number of newly covered individuals. Furthermore, the rising cost of Medicare and Medicaid played an effective role in increasing the general demand for medical services in the US. The outcome is the rise in prices of healthcare services offered. Additionally, the incidences of chronic conditions such as diabetes in the US have recorded an upward trend which directly increases medical care costs. Liu et al. (2017) reiterate this fact by documenting that the chronic diseases constitute approximately 85% of the healthcare costs, a value exceedingly more than half of all the chronic conditions recorded by all Americans (Liu et al., 2017).

The single-payer system utilized in the US has also contributed to the rise healthcare costs since it is related with the significant hikes in tax further transferred to the common man. Looking at the proposal for having Medicare availed to all, it is evident that this program will result in the implementation of a 2.2% tax rate on the people who earn approximately $200,000 or less annually as well as families who earn a maximum of $250,000 on the same year (Cai et al., 2020). The rate of tax implemented would be higher among groups of individuals and households who earn approximately more than $200,000 and constitute 6.7% payroll tax on people in employment (Cai et al., 2020). This suggests that the single-payer system will be directly responsible for ensuring that the upward trend in healthcare costs persists. This is reflected in the form of higher taxes which the big and small businesses will find themselves struggling to pay besides the normal costs of care.

Reduced government funding of the healthcare system is also one of the factors which has caused a significant and constant rise in the costs of care in the US. Liu et al. (2017) suggest that with this system, money becomes more distributed and additional costs are experienced as a result of the development of new positions within the government to manage and run the healthcare sector. The increased costs experienced in the process are further distributed within the healthcare sector by requiring the patients to cater for the excess through increased costs of the services (Liu et al., 2017).

The cost of care in the US is also on the rise based on the fact that the uncompensated care spending is also increasing in the region. According to Valdovinos et al. (2015), caring for the uninsured patient in the US results in a drastic rise in the charity care’s facility operating expenses by approximately 1.78%.  The process results to a high level of bad debt which must be settled through an increased health care costs for the insured people who have to the capacity to cater for their medical expenses. Notably, policy makers in the US have devised policies seeking to ensure that the not-for-profit care facilities share the prevailing burden accrued as a result of the non-paying patients with the public and the taxpayer funded facilities by offering charity care (Goodnough, 2016).

The rising health insurance premiums is also a factor that has driven the constant rise in the costs of healthcare in the US. The community members who rely on healthcare that are employer-provided have experienced a rise in the amount of the annual premiums for the family by approximately 37% between 2015 and 2020 (Cai et al., 2020). On the contrary, unsubsidized premiums paid by households for Affordable Care Act increased by 97% during the same period. The rise in the premiums further results to the rise in the costs of healthcare as experienced by the people in the region who access medical services.

Conclusion

            Conclusively, the cost of healthcare is constantly on the rise in the US. The upsurge is mainly due to the use of a single-payer systems, reduced government funding, government policy, and rise in the health insurance premiums. The rise in cases of uncompensated care and more cases of chronic conditions also contribute to an increase in healthcare costs in the US.