Obamacare...The Good..Bad and the Ugly

[REECE2017]

Congressional Budget Office: Options for Reducing the Deficit
The overall due balance of the US federal government now surpasses yearly Gross Domestic Product (GDP). This level has traditionally attested challenging in other nations. The main driver of the balance is a federal budget shortfall that now surpasses $1 trillion annually. Regardless of predictions of ominous consequences, the shortfall and due balance have not been regulated, as initiatives to make meaningful cutbacks -- counting plans created by the dual-party Bowles-Simpson and Domenici-Rivlin groups -- have thus far become vulnerable to internal strife in the political procedure (Matthews, 2013). The following excerpt exhibits a method to abolish the yearly shortfall, stabilize the federal budget, and lessen federal due balance.
By decreasing federal agencies’ expenditures for FEHB premiums for workers (who also become Medicare recipients) and their dependents, the decision to implement the premium-sharing structure would decrease elective expenditures by a projected $27 billion from 2019 through 2026, on condition that appropriations were decreased to mirror those lesser charges. The decision also would lessen obligatory expenditures for FEHB by $32 billion for the reason that the Treasury and the Postal Service would make lesser payments for FEHB premiums for persons who receive annuities and postal workers (CBO, 2016).

Ultimately, the CBO projects that beginning in 2019; the decision would cause some FEHB members to withdraw from the program and incomes for employees (including Medicare recipients) will also be influenced by the decision. However, CBO assumes that the net adjustment would be negligible. Some of the individuals who became uncovered by insurance plans would pay fines to the government, as the ACA stipulates. That surge in incomes would be roughly counterbalanced for the reason of modifications that would occur in the number of individuals with employer insurance and modifications in the charges of that health plan. Those modifications would influence the share of complete payment that takes the shape of taxable earnings and incomes and the share that takes the shape of nontaxable health benefits; taxable payment would surge for some individuals and lessen for others (CBO, 2016).
On the other hand, a benefit of this decision is that it would upturn registrants’ motivation to select lower-premium health coverages: If they had chosen health coverages that surpass the voucher amount, they would pay the entire supplementary charge. For the same purpose, the decision would reinforce price competition amid health insurance coverages partaking in the FEHB program. For the reason that registrants would pay no premium for health insurance coverages that does not exceed the value of the voucher, insurers would have a specific incentive to suggest such health insurance coverages (COB, 2016).

Furthermore, the US is challenged with an increasing forthcoming percentage of debt to Gross Domestic Product that, if permitted to remain, would have severe adverse consequences for the American economy. However, policy modifications can upturn the size of the forthcoming Gross Domestic Product and reduce the forthcoming budget shortfalls. Comparatively small drops in forthcoming yearly shortfalls could reverse the growing percentage of national due balances to Gross Domestic Product. Those yearly shortfall drops could be best accomplished by slowing the development of Medicare (Feldstein, 2016).





References
CBO. (2016 December).Options for Reducing the Deficit: 2017 to 2026.CBO. Retrieved from https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/52142-budgetoptions2.pdf
Feldstein, M. (2016). Dealing with long-term deficits. American Economic Review, 106(5), 35-38. doi:10.1257/aer.p20161004
Matthews, R. B. (2013). A "modest" proposal to balance the federal budget. Journal of Applied Business Research, 29(3), 669.