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Medical Care Reform


United States health care system cost more than 18% of the national GDP. In 2008, 16.2 percent of the Gross Domestic Product (GDP) was spent in the health care sector amounting to $2.38 trillion out of the $14.29 trillion. Research predicts that without proper implementation of medical care reforms, the cost of health care in the U.S. would hit 30% of the real per capital GDP by 2040.

Research question

How sustainable is medical care reform to support cost containment and insurance expansion to cover all uninsured citizens?


The study investigates the sustainability of medical care reform in America. Positive economic effects of implementing universal medical care reform President Obama signed into law the Patient Protection and Affordable Care Act (PPACA) in 2007 to enable 40.5 million uninsured Americans access quality and affordable health care. Medical care reform promises to improve living standards and free more household credit to stimulate economic production. PPACA provided $635 billion reserves for expansion of insurance coverage, adoption of technology and improvement of payment systems of the health care system for 10 years. The goal of medical care reform is to decrease the infant mortality rate from 1.4% to 0.7% for the African Americans and cut the white infant mortality rate from 0.7% to less than 0.1%. Universal health care covers everyone, but now, the Federal government covers elderly population through Medicare, the poor through TRICARE, children through State Children’s Health Insurance Program and Medicaid for veterans.

Decreasing health care costs would cut budget deficits and lower the rate of unemployment since inflation is the main cause of job cuts. Implementing medical care reform would give health insurance coverage to all the uninsured Americans; the nation would increase its net economic gain by $100 billion. Annual reduction in cost growth of about 1.5 percentage points of health care cost will increase average family income to $2,600 in 2006 and $10,000 by 2030 which translates to 6% increase in the national GDP by 2030. The increase is more than two-thirds the current GDP percentage, which means that implementation of medical care reform is ideal for a health America.

Negative economic impacts of medical care reform

Health care costs increase at a rate of 7% per year in the U.S., which means that 38% of the national GDP will cover medical care reform costs by 2040. In 2006, the Federal government spent 15.5 percent of the GDP to carry out health care compared to Canada’s 10% expenditure on medical costs. The health care payment system is flawed because of rewarding the physician prescription to the patient instead of appraising the overall medical outcome of the client.

Effects of medical care reform legislations in the private health insurance sector

The private health insurance market in America pays claims of over $800 billion annually. This private market is threatened by universal health care reforms that would that favor a government-funded health care over a private insurance. Thus, to protect the insurance industry, the government should give people tax credits to buy health insurance from reputable private vendors.

In conclusion, the advantages of medical care reform outdo the disadvantages of locking private insurance sector out of business. Health care is sustainable if the costs are contained to improve the national coverage of all uninsured citizens. Private insurance vendors should be included in medical care reform to enhance quality and competition in the insurance sector of U.S. economy.