OBAMA CARE CASE Essay

Submitted By realjun4
Words: 1015
Pages: 5
Open Document
1. Your task in this question is to evaluate the effects of the recent Affordable Care Act, designed to increase coverage to 32 million Americans, on the labor market. Specifically, your task is to evaluate each component below and identify, first, what effect the policy will have on employment and wages, and second, whether those effects are efficient or not, using our usual definition of efficiency. You should make your evaluations based on what happens when all these provisions become law, i.e. by 2014. Details are on the next page. (3 pages)

Individual Mandate:
If people mandatorily need to purchase health insurance or face a $695 annual fine, and there are some exceptions for low-income people, people who are on the boundary between low-income and middle-income could decide to be included in the low-income class to be better off. If they can be beneficiaries of the Affordable Care Act, they don’t need to spend for health insurance purchase and could receive subsidies from the government. Therefore, the supply of relatively low-income and unskilled labor would go down. Considering the main purpose of the Affordable Care Act, providing better health insurance policies for workers to maximize their productivity and living standard, the individual mandate policy could work inefficiently because the productivity and living standard of low-income workers would be reduced simultaneously.

Employer Mandate:
Because employers with more than 50 employees must provide health insurance or pay a fine of $750 per worker, operating costs of enterprises would go up as a result. To offset the increase of operating cost, employers might be going to reduce wages or other compensation. Because the supply of labor moves proportionately to the level of compensation, labor supplies would be going down if the employer mandate policy is enforced.
Employers could choose a different way to cover their increased operating costs. Because reducing wages and compensations could negatively impact on the productivity of workers according to the efficiency wage theory, employers would lay off some workers instead of changing compensation. In the long-term, the decease of labor demand would cause the decrease of equilibrium wage, and workers could be worse off as a result. Even though the Affordable Care Act is devised to make the working class better off, it could ironically make the class worse off by decreasing the demand for labor.
Health Insurance Exchanges:
The government is going to provide financial subsidies to the uninsured and self-employed people through the Health Insurance Exchanges. I think that the most important purpose of this subsidy is helping workers who do not have health insurance to work with less worries about their health. However, the subsidy ironically could negatively impact on the supply of labor through both a “Substitution Effect” and an “Income Effect.” According to the structure of subsidy, people could receive more subsidies when they earn less. This means that people are better off when they do not work if the amount of subsidies are pretty large. Therefore, some people would decide not to work or less and supply of labor is going to decline. In addition to this, people could decrease their work amount and time because they actually earn more money through the subsidy program and do not need to work hard to maintain their living standards same. Because both a substitution effect and an income effect work simultaneously, government’s effort to positively impact on the supply and quality of labor forces could not work effectively.

Paying for the Plan:
If the government tries to find financial resources for the Affordable Care Act by levying various taxes on high-income people and insurance companies, this could negatively impact on both supply of labor and demand for labor. Starting in 2012, the Medicare Payroll Tax would be expanded to include unearned income. Because this tax will be levied on
Show More

Related Documents: OBAMA CARE CASE Essay

Argumentative Essay On Obama Care

debated into what's to come. While President Obama passed his convincing bit of enactment in 2010, the Affordable Care Act or Obama Care, there was a verifiable polarization inside of the American individuals which ensued. In any case, even with the greater part of the potential financial repercussions that may emerge from new healthcare policies, it is considerable enactment the United States should continue to uphold and support. The new health care policy gives more scope to a bigger rate of Americans…

Words 765 - Pages 4

Does Obama Deserve The Nobel Peace Prize

not always the case. On occasions, it is given with intentions of receiving something in return, most of the times political. President Obama was awarded the Nobel Peace prize in 2009 before he made any actual leaps in any direction: only promises to make them. The Nobel Peace Prize is intended to be given to people after they make these leaps. Because of the premature awarding of the Nobel Peace Prize to Obama, there is clear evidence of political intentions behind it. When Obama was given this…

Words 479 - Pages 2

healthcare pplicy Essay

will take care of millions of americans without insurance. “The supreme court consideration was requested in five cases and the supreme court selected one case, brought by 26 states, for review”: said the digestive disease and sciences article ( edward ,2012). The republicans made promises to the nations for the obama care to be vote or millions of americans will live without health insurance. The united states does no really know about absolute freedom. Barack obama did the…

Words 1145 - Pages 5

Final Research Paper ESL 8

5/28/15 Obama’s Health Care Reform As we know that insurance is so expensive in the United States. According to "Health Care Opposing Viewpoints," there are 42.5 million people who are uninsured in 2001 (Lisa and Adria 33). Most American gets their health coverage from their employer, but others are not. A small number of people can afford to buy their own health insurance; however, most people are still uninsured. Because of this fact, president Barack Obama signed an Affordable Care Act, and it also…

Words 1684 - Pages 7

Rhetorical Analysis Of Barack Obama's Commencement Speech

Obama commencement speech encourages his audience to go out there and help someone in need and to forget about the fame and money that should be the last thing in the mind. In his commencement speech to Arizona State University students, Barack Obama relies most heavily on appeal to logos to convince his audience to “find someone to be successful for” (Obama 5). This appeal is especially effective in this case because it encourages them to look back at history and find people who made history with…

Words 839 - Pages 4

Essay on The New Political Campaign

role did social media play into this? What tension lies between a winning strategy and unintended consequences? Most importantly, what does this mean for future elections and constituents? I seek to answer these questions. I will argue that the 2012 Obama and Romney campaign teams effectively utilized technological strategies to optimize the one step flow of communication, and as a result, polarize the public. My argument will give insight to how this election has separated the political landscape by…

Words 2838 - Pages 12

Radio: United States and Health Insurance Essay

to Democracy Now! onJune 29th hosted by Amy Goodman, today the Chief Justice U.S Supreme Court, John Roberts, decide to vote, join with the court’s four liberal members. They havepassed the Affordable Care Act, the landmark healthcare reform bill signed by President Obama two years ago. In this case, citing the authority of Congress to impose taxes, the decision affirms the law’s individual mandate provision that requires Americans who can afford it to either obtain health insurance or pay a penalty…

Words 367 - Pages 2

Obamacare Argumentative Essay

Before becoming president, Barack Obama said, “The American people are too often offered two extremes — government-run health care with higher taxes or letting the insurance companies operate without rules. … I believe both of these extremes are wrong.” After his election, Obama came up with The Affordable Care Act also known as Obamacare; its main goal was to provide free health care for everyone in the U.S. Proponents believe that this has benefited the low income class because it provides them…

Words 550 - Pages 3

I Agree More With President Barrack Obama's Health Care Policy

Isa 10/23/10 I agree more with President Barrack Obama's health care policies because he believes that government shouldn't dictate family matters. his policies will benefit the majority of Americans who need them. I agree less with Mitt Romney's policies because one of his policies take away power from citizens and gives it to the states. The presidents policies seem like they are going to be for the majority of the Americans and they are…

Words 297 - Pages 2

Essay on Economic Issues

My first issue is on the health care in the United States. Health care prices are increasing very rapidly. And last year about 45.7 million people had no health insurance. Obama's plan would create a National Health Insurance Exchange to help Americans purchase insurance, provide tax credits to individuals and small businesses to help them purchase insurance and also require coverage for all children. McCain on the other hand wants to give a tax credit of $2,500 per person or $5,000 per family to…

Words 868 - Pages 4