Question

You are an advisor to a future fictional president. We know that the Affordable Care Act (or more affectionately known as Obama Care) was passed in 2010 and went into effect January 1, 2011. Over the next several years, a number of provisions took hold to include penalties for not having health care, “Cadillac Health Plans” were eliminated, and other provisions occurred as well. At no time was there a limitation on the use of private funds to pay for health care (unlike an earlier plan that was proposed [Hillary Care] which would have imposed fines and even possible imprisonment for anyone paying for non-approved treatments). It was promised that once Obama Care was implemented, everyone’s cost would come down. We know this did not happen.

Using the concepts of supply and demand (Chapter 2 of your textbook), please explain why costs did not drop and offer suggestions for a more successful model. Use demand and supply curves as well as develop demand functions as part of your explanation.

Answer 1

Obama Care was a very auspicious and noble social security scheme introduced with high expectations and belief that this scheme would help to eradicate the starvation of the poor people and bring more and more people under the ambit of Government security and that the poor in the country would now have something to look up to, they would enjoy similar medical and health benefits like that of the richer section of the society. However, the Obama Care has not been able to leave a very good mark on the social security sphere in the United States, this all, owing to the large-scale corruption and irregularities in the implementation of this scheme or social security program.

                                            As can be seen from the above graph, the supply of Obama care social security scheme is taken on the X axes, where the demand for this scheme is taken on the Y axes. We can see that the demand for such a social security scheme was the need of the poor people, and there was a huge demand in the market for such a social security program. However, the supply of this program was a disaster, owing to large scale corruption and irregularities. Some of these irregularities and scams included the opt in of those people in these schemes, who were comparatively not poor. Therefore, those poor took maximum advantage of this plan, who were not failing under the umbrella owing to their illegibility, and the legitimate people were left out of it. This therefore never let the demand for such a program to lower down, and the constantly increasing demand made the program a failure. Moreover, there has allegedly been much corruption in the rolling out of this plan. All these factors never allowed this program to reach put to the common people.

                                         A program of this intensity and magnitude can only be a success, when the planning for its roll out and its execution are perfectly planned and should be met by a masterful execution. This is because, it is the execution of the programs which holds paramount importance in the overall success or failure of a program. Adequate amount of financial aid must be provided to such a scheme, and it must be ensured that only the really needed people get the benefit of this scheme, thereby ensuring that, such a scheme can reach the maximum people in the society at the smallest cost as possible.