Question

1.         What negative externalities arise when an individual does not have health insurance?

2.         Discuss the advantages and disadvantages of the Affordable Care Act (ACA).

Answer 1

1. If someone has no insurance, it will impose costs on those who do it in several ways. First, there are many infectious diseases. If contagious diseases go untreated due to lack of insurance for the infected person and therefore can not afford treatment, they will spread to the rest of the population. Second, people who can not afford to pay for emergency treatment are not denied; thus, people who are not paid will go to hospitals to receive care.
The insured patients bear the cost of delivering the treatment. Third, uninsured care is often given instead of a doctor's office in a hospital emergency room. The resource cost of providing care in a hospital setting is much higher than in a doctor's office, so the care received by the uninsured is more expensive than the care they would have received if they were insured. Hospital resources that are inefficiently used impose a social cost.

2. Advantages of the Affordable Care Act (ACA) are:
I. Many Americans Now Have Insurance Coverage.- A health insurance cover was obtained by over 16 million men. The young adults were a large percentage of these people.
II. Made Health Care More Affordable. - Because insurance companies now had to spend more than 80% of the insurance premium on upgrades and medical care, insurers were prevented from making unfair rate increases and instead cared more about their customers.
III. Limitless Care Time. - Before most people, particularly those with chronic conditions, treatment ran out as the insurance companies had put a time limit on how much money a person was to spend.

Disadvantages of the Affordable Care Act (ACA) are:
1. Increased Premium Costs - Since insurance companies are forced to cover the costs of pre-existing conditions to patients and provide a full range of benefits, consumers are now forced to pay higher premiums.
2. One Can Be Penalized In Case You Are Not Insured - The aim of the Affordable Care Act is to ensure that people are covered throughout the year. Therefore, if you are uninsured or do not have an exemption, you become charged because it is assumed that not having insurance means that you pass on your expenses to others.