Health Economics: Social Issues, Challenges, and Solutions

This essay examines the social issues within the US health insurance industry, particularly the high number of uninsured citizens and the escalating costs of healthcare. It highlights the inadequacies of the US healthcare system compared to other developed nations and the adverse impact on low-income households. The essay proposes socially optimal solutions, including expanding Medicare, revising payment systems, dedicating income for coverage, and allowing uninsured individuals to buy coverage through health benefit programs. It also suggests short-term and long-term reforms to address Medicare's rising costs, such as enacting modest premiums and implementing premium support financing. The essay concludes by emphasizing the importance of enhancing the Affordable Care Act and restricting administrative costs to improve healthcare access and affordability, noting the positive economic impacts of policies under the ACA.

Running head: HEALTH ECONOMICS
HEALTH ECONOMICS
Name of the Student
Name of the University
Author’s Note

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Introduction
The purpose of this essay focuses on the social issue that is related to health insurance
industry. The health care facilities in US are owned as well as operated by the private owned
organizations. According to WHO (World Health Organizations), the US has spent high amount
on the health care and contributes to gross domestic product (GDP) of the nation. Recent
statistics reflects that private health care business creates huge problems in this nation. In US,
medicare is the single player and is the national insurance program that is administered by the
federal government (Andersen, Rice& Kominski, 2011). It is funded by premiums, general
revenue and payroll tax. It provides health insurance to both younger and aged people and is
paid through payroll tax.
Discussion
The social issues relating to health care sector include the fact that several citizens in US
are uninsured and the cost of health care ate increasing at high rate than inflation as well as
wages. Numerous indices of the effectiveness of heath care reflects that this nation’s fares poorly
as compared to other capitalist countries (Blackwell, Lucas & Clarke, 2014). In fact, inadequate
health insurance in US makes some citizens poorer as they deplete their money for spending on
illness. Some of the low income households cannot undertake Medicare in this country owing to
its increasing cost from 0.7% to 3.5%. As a result, it led to deadly consequences as these people
becomes poorer.
The possible socially optimal solutions that could solve social issues regarding health care
crisis is that the US government should take few actions and adopt policies for achieving
universal health coverage. These actions include-

2HEALTH ECONOMICS
 The US government should extend Medicare program to the uninsured people aged
between 55 to 64
 They should revise their Medicare payment system for attaining higher quality and larger
efficiency along with savings used for expanding coverage
 They should also dedicate 1% income to finance expanded coverage and utilize the
present subsidies for the low income charity care.
 The government should also allow uninsured Americans to buy coverage through health
benefit program
In order to solve issues regarding Medicare’s rising cost, the administration must embark on
long terms as well as short term reforms. The government enact modest premium for covering
cash deficits in the hospital insurance (HI) trust fund (Jacobs & Skocpol, 2015). Additionally, the
government should implement premium support financing system for the longer term for solving
Medicare’s increasing cost problem (Popescu, 2014).
Conclusion
The policymakers must enhance their progress provided by the Affordable Care Act by
adopting marketplaces for health insurance and enhancing federal financial aid for the enrolls in
marketplace. Increased access to coverage, payment reforms and consumer protection has
provided both direct as well as indirect economic advantage to the Americans. In addition, the
economic cost my decision on improving health care crisis is to restrict total amount spent on the
administrative cost of this sector in US. In fact, the policies under ACA has also vital impact
within the industry and this in turn contributed to decrease in nation heath spending through care
modification.

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References
Andersen, R. M., Rice, T. H., & Kominski, G. F. (2011). Changing the US health care system:
Key issues in health services policy and management. John Wiley & Sons.
Blackwell, D. L., Lucas, J. W., & Clarke, T. C. (2014). Summary health statistics for US adults:
national health interview survey, 2012. Vital and health statistics. Series 10, Data from
the National Health Survey, (260), 1-161.
Jacobs, L., & Skocpol, T. (2015). Health care reform and American politics: What everyone
needs to know. Oxford University Press.
Popescu, G. H. (2014). Economic aspects influencing the rising costs of health care in the United
States. American Journal of Medical Research, 1(1), 47-47.