Repeal of the Affordable Care Act Research Paper

  • Length: 5 pages
  • Sources: 10
  • Subject: Healthcare
  • Type: Research Paper
  • Paper: #79400629

Excerpt from Research Paper :

health care industry, in terms of the economics of that business, and how it is structured. The Affordable Care Act was introduced in 2010 in order to address some of the issues that are inherent in the health care industry, namely a high rate of uninsured and skyrocketing costs that were threatening the quality of care for everybody else. The reality is that the ACA has been highly successful. While there are still too many uninsured, some 20 million Americans have gained health care. The costs have been fairly high, but they are decreasing, the from a fiscal point-of-view the Congressional Budget Office sees the ACA as actually contributing positively to the federal budget by around 2019.

So the benefits of the ACA have basically been realized, and at a fairly reasonable, and declining, cost. The law has met its primary objective, and performed fairly well. There were some issues, and ideally those would be worked out, but they were by no means insurmountable. But now the future of the ACA is in doubt, with President-Elect Trump coming to power. His platform focused on repealing the ACA, and replacing it with a system of other design. It is unknown what that means, but repealing the ACA will essentially result in the U.S. budget deficit going higher, and it will result in most of the newly-insured people losing their insurance. This will end up failing both the American taxpayer and those who lose their insurance. There might be some winners within the health care industry, but it is tough to prove that, now that the industry has fully implemented the ACA. This paper will cover these different issues, outlining what the ACA has accomplished and what will happen when it ends up getting repealed.

Overview of the Health Care Industry

Health care is one of the largest industries in the U.S., accounting for approximately 18% of GDP (Morris, 2016). The U.S. underperforms relative to most countries in most health care measures, not the least because of the estimated 34 million Americans who still lack health care coverage (Morris, 2016). The industry is fragmented, with a large number of health care providers, dispersed geographically. These range from private hospitals to public clinics, to VA hospitals and charity-run facilities. Insurance companies are also major players in the industry, and they have significant influence over health care policy. Aside from insurance companies, the federal government is the single-largest payer, through Medicare, Medicaid and the VA.

The health care industry has seen costs rising at a much faster rate than the rate of inflation, something that has created a number of problems. While firms in the industry tend to pass these costs onto payers or end users, this has become increasingly difficult as the cost of health care rises much faster than the rest of the economy. The ACA was designed in part to address the issue of rising health care costs. Studies show costs rising 6.5% this year, higher than inflation but stable after years of double-digit increases (Lorenzetti, 2016).

Driving demand is not even price increases in recent years. There is evidence to support the idea that the Affordable Care Act is helping to curtail rising costs. The issue is actually rising demand (Lorenzetti, 2016). Demographics -- an aging population -- are contributing to this rise. So has been the increase in the number of Americans covered since Obamacare came into effect. Further, people are demanding more drugs, more treatments, and this has also contributed to the increase in demand. The industry is not necessarily able to increase supply in response, so prices increase in the short-run.

What is the ACA?

The Affordable Care Act (ACA) is the health care plan of President Obama, so is colloquially known as Obamacare. The intention of the Act is to reduce the number of Americans without health insurance. By all accounts, this is what has occurred, with some reports highlighting the number of uninsured Americans at 8.6%, a record low (Mangan, 2016). The Affordable Care Act works in three ways. First, it allows children to stay on their parents' plans well into young adulthood. This takes them through their college years and their early working life, when they are more likely to work part-time, as an intern or otherwise without work benefits.

The second mechanism is Medicaid expansion. This expands the parameters for a person being allowed to use Medicaid. The provision is available at state discretion, and has not been adopted by all states. Generally Republican-controlled states have made a political decision to refuse this expansion (Kaiser Foundation, 2016).

The third means by which the ACA has reduced the number of uninsured is the creation of insurance exchanges. The exchanges are a means by which consumers can shop for insurance plans. This makes for a more transparent marketplaces, where insurance companies have to compete more openly for business, something that should in theory benefit the consumer. But consumers also have the individual mandate, which means that they will be assessed a penalty if they do not adopt buy insurance. Insurance companies can no longer refuse people on the basis of pre-existing conditions, so the idea is to put a lot more people into the insurance market, including young and…

Sources Used in Document:


Bryan, B. (2016). The percentage of Americans without health insurance just hit an all-time low. Business Insider. Retrieved December 4, 2016 from

CBO (2016) Budgetary and economic effects of repealing the Affordable Care Act Congressional Budget Office. Retrieved December 4, 2016 from

Kaiser Family Foundation (2016) Status of action on the Medicaid expansion decision. Kaiser Family Foundation. Retrieved December 4, 2016 from

Lorenzetti, L. (2016). Here's why you'll likely pay more for your employer-sponsored health insurance. Fortune. Retrieved December 4, 2016 from

Cite This Research Paper:

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