1) Briefly define the two competing forces in the economics of healthcare policy and reform.
2) In 2014 after the Affordable Care Act had been fully implemented, healthcare market exchanges were created to allow individuals to purchase insurance coverage through “private“ insurance carriers as opposed to a public/government option. Why in your opinion was a public/government run option not included?
3) Briefly explain why the U.S. prefers free market choices for healthcare programs.
4) Healthcare in the US is always reforming to some degree. What are two drivers of healthcare reform in the US within the past year? If you do not know, feel free to reference general news articles for ideas.
2. Lack of a Public Healthcare Option in the ACA
In my opinion, a public, government-run healthcare option was not included in the Affordable Care Act (ACA) due to political opposition and the preference for market-based solutions in the U.S. healthcare system. The concept of a "public option" was a highly debated point, with opponents arguing it would lead to government overreach, stifle competition among private insurers, and potentially lead to a single-payer system. By relying on private insurance companies to offer plans on the exchanges, policymakers were able to pass a more politically palatable bill that aligned with the American preference for free-market choice, even if it meant forgoing a potentially more affordable and accessible public plan.
3. Preference for Free Market Choices
The U.S. prefers free market choices for healthcare programs primarily due to deeply ingrained cultural and political beliefs about individualism and consumer choice. This perspective holds that competition among private providers and insurers leads to innovation, higher quality services, and lower costs. Proponents of this view believe that individuals, as consumers, should have the freedom to choose their own doctors and insurance plans, and that the market, not the government, is the most effective mechanism for allocating resources and ensuring a high-quality healthcare system.
4. Recent Drivers of Healthcare Reform
Two significant drivers of healthcare reform in the U.S. within the past year have been rising drug costs and the increasing demand for mental health services.
Rising Drug Costs: Prescription drug prices in the U.S. remain among the highest in the world, leading to affordability crises for many patients. This has driven a push for policy changes, such as the provisions in the Inflation Reduction Act, which allow Medicare to negotiate prices for certain high-cost drugs. This driver highlights the ongoing tension between pharmaceutical innovation and drug affordability.
Sample Answer
Competing Forces in Healthcare Economics
The two primary competing forces in the economics of healthcare policy and reform are equity and efficiency. Equity focuses on the fair distribution of healthcare services, aiming to ensure everyone has access to care regardless of their socioeconomic status. This often involves government intervention and public funding to subsidize care for the poor and uninsured. Efficiency, on the other hand, is concerned with maximizing the value of healthcare resources—getting the best possible health outcomes for the money spent. It emphasizes market-based solutions, competition among providers, and consumer choice to drive down costs and improve quality.