The impact that federal health care policies are having on consumer costs

Federal health care policies seek to provide or make readily available health insurance coverage to all Americans. In theory, this is an obvious benefit to everyone and will, in-turn, decrease the cost of health care through basic supply and demand economics. However, this has not been the case; the cost of health care is increasing for everyone. According to Chambers (2016), there is a strong statistical relationship between regulation and an increase in health care cost showing a ten percent increase in total regulations leads to a .0687 percent increase in consumer prices as regulations, in general, increase the cost of doing business, which in turn, is passed to the consumer. Basic economics. This is supported through the Actuarial Office of CMS. According to the CMS, “national health spending growth is projected to average 5.7 percent, from 4.8 percent in 2019, and reach nearly $6.0 trillion by 2027. With nominal GDP growth expected to average 4.6 percent during this period, the health share of GDP is expected to increase to 19.4 percent by 2027, from 17.8 percent in 2019.” (Centers for Medicare and Medicaid Services, 2017) Health care costs is a leading contributor to our national debt and is a leading contributor to financial stress and personal bankruptcies. According to projections of The Office of the Actuary in the Centers for Medicare & Medicaid Services, over the years 2020-2027, “Under current law, national health spending is projected to grow at an average rate of 5.5 percent per year for 2018-27 and to reach nearly $6.0 trillion by 2027. Health spending is projected to grow 0.8 percentage point faster than Gross Domestic Product (GDP) per year over the 2018-27 period; as a result, the health share of GDP is expected to rise from 17.9 percent in 2017 to 19.4 percent by 2027.” (Centers for Medicare and Medicaid Services, 2017) With this said,

Nobel Prize-winning economist Milton Friedman wrote that medical price inflation since 1965 has been caused by the rising demand for health-care coupled with restricted supply (Friedman 1992). Robert Alford explained the minority view: ‘The market reformers wish to preserve the control of the individual physician over his practice, over the hospital, and over his fees, and they simply wish to open up the medical schools in order to meet the demand for doctors, to give patients more choice among doctors, clinics, and hospitals, and to make that choice a real one by public subsidies for medical bills’. (Holly, 2017)

As each political party seeks to determine the best way to provide healthcare to the United States, both must realize any policy that does not encourage people from pursuing careers in the medical field will do more harm than good. The result will be increased cost for healthcare services, a reduction in access to care through limiting the types and/or locations of providers and the services offered and suppress competition and innovation in healthcare delivery. Over the past half-century, the U.S. has denied potential competitors from entering the health care market place through regulations. Holly (2017), states that if Obamacare is still necessary, the additional demands created by subsidizing even more consumers will require even more supply of health care providers.


References
Centers for Medicare and Medicaid Services. (2017). Projected. Retrieved from www.CMS.gov: https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/ForecastSummary.pdf

Chambers, D. C. (2016, February 23). How Do Federal Regulations Affect Consumer Prices? An Analysis of the Regressive Effects of Regulation. Retrieved from www.mercatus.org: How Do Federal Regulations Affect Consumer Prices? An Analysis of the Regressive Effects of Regulation

Holly, m. (2017, May 9). How Government Regulations Made Healthcare So Expensive. Retrieved from Mises Institute: How Government Regulations Made Healthcare So Expensive | Mike Holly

U.S. Department Of Health and Human Services. (2018, November 30). Reforming Americas Health System Through Choice. Retrieved from www.hhs.gov: https://www.hhs.gov/sites/default/files/Reforming-Americas-Healthcare-System-Through-Choice-and-Competition.pdf