Sample Paper on The cost of healthcare & the effects on American people

The cost of healthcare and the effects on American people

Healthcare is a vital component in the excellence of any economy. Without proper healthcare principles, many people, especially the marginalized may find it difficult to access quality care. This being the case, governments are tasked with the role of ensuring the majority, if not the whole of the population, is adequately covered. As the government stipulates measures to ensure a universal coverage plan, the costs paid per persons are bound to increase to cater for the less privileged to enjoy equal treatment. This fact does not put into consideration the privately funded health insurance schemes, but assumes a universal coverage. Due to the state of the economy, the cost of health care has been increasing thus affecting households, businesses and the various sectors of the government. Of interest to note is the fact that the cost of health care in America has been increasing more than the GDP. Among the key noticeable effects of the increasing health care costs is the non-affordability of theservice, thus putting pressure on businesses and families. In light of the above highlights, this paper will aim at highlighting how the cost of healthcare is affecting the Americans.

The healthcare expenses entail the insurance premiums amount and individual amounts that one pays by their own means (Komisar 4). As the health spending among the middle income earners increases, more middle income families face higher income expenses on healthcare. This has the potential of affecting their livelihood as they interfere with the budgetary allocations on other areas. This leads to an increased burden which many of the lower income earning group are unable to afford. It also in turn leads to an increased number of the uninsured in the society, thus risking the lives of the people.

To the economy, the increasing healthcare costs in relation to the GDP have been scrutinized. The rapid increase in the healthcare spending affects all sectors of the economy including the employment and inflation as well as the per capita GDP (Sood, Arkadipta, and Escarse 5). This in effect affects the families, businesses and the provision, financing as well as the consumption of health care in America. An example of this fact includes the logic that the federal government and other local authorities collect taxes from the operation of businesses and the households to finance the health insurance programs in place as well as the direct care to the households. On the other hand, the businesses that provide the employment to the households, as well as the household near incidences of healthcare cost. The rising health care costs could lead to inflation, which in turn would prompt unemployment and reduced investments. This fact does not necessarily lead to unemployment, but could also trigger increased employment opportunities as more people are absolved to cater for the increasing population.

Healthcare costs have an impact on the employers since it affects their businesses negatively. Majority of the employed workers have company provided health insurance schemes that enable the employers to be exempted from income and payroll taxes. The costs of the healthcare that have been projecting an upward trend are likely to affect such businesses by eroding and reducing the profits of the companies. Since the businesses have to operate on a profit, they may end up cutting down employments, reducing health benefits to the workers. At the same time, they may raise prizes or reduce other expenses including investments.

Since the government has to provide the required health services to the population, it may respond to the increasing costs by increasing taxes and borrowing as well as curbing other discretionary spending. This may lead to compromise on other sectors, as health is key to a country’s development. The net effect of this is that the higher taxes lead to lesser amounts of disposable income that a household is able to spend, save or even to invest (Janda, Jeffrey and Jerry 601). The higher taxes may in turn lead to households and businesses engaging in activities that will not require much tax. This net effect affects that Americans in a negative way since they are forced to use more on healthcare than in other undertakings (Hacker 34). The American government at the same time, once prompted by an increasing healthcare costs may be forced to cut the state medical spending. This affects in a big way the households, who then have to provide the services. The government may also be forced to take other stringent measures including cutting the budgets of other sectors to finance the rising health care costs. This in turn may lead to a reduced investment in the publicly funded activities that generate revenues and other transferable.

The healthcare costs may also impact the households in a negative way. This may be exhibited by the fact that high costs of health may lead to companies limiting their wage increases to cover the rising costs, it may also lead to a reduced health insurance benefits that would lead to increased premium payments by the employees (Bradley, Don and Matthew 94). To cater for the increased costs would require the employees to work overtime to balance off the deficit created by company reductions. In effect, the health care costs, reduce that total number of the population that is insured, putting a burden on the government to cater for the uninsured in the society. This is brought about by the fact that the lower income earners may not be able to afford the costs of healthcare and with increased costs, they are rendered helpless. This translates to reduced access to care as well as other unfavorable health plans for the population.


Healthcare costs have an effect in the American population. Facts exhibited indicate that as the costs of health care increase, nearly all the sectors in the economy are likely to be affected, including the government the businesses as well as the citizens themselves. To be precise, the government has to provide the essential care through the health institutions. This would lead them to raise taxes on some commodities to cater for the deficit. On the other hand, the business may respond by reducing down the number of workers or failing to increase wages in an attempt to bridge the gap between the reduction of profits and coverage. The consumers on the other hand and the citizens may be forced to contribute more to the various schemes available. This may render the lower income bracket unable to pay for the insurance thus rendering them uninsured. Overall, the government should take the correct measure to seal the loopholes that have made the healthcare costs in America the most expensive in the world. In line with this, the American government should push forward for universal health coverage so that the lower income earners could be targete

Works Cited

Bradley III, Don B., and Matthew, D. Hobbs. “Understanding Healthcare Costs And Evaluating Health Insurance For Small Business Employees.” Academy Of Health Care Management Journal 4.1 (2008): 91-112. Business Source Complete. Web. 30 Nov. 2014.

Hacker, Jacob. “The Health Care for America Plan.” New Labor Forum (Routledge) 16.3/4 (2007): 30-40. Business Source Complete. Web. 30 Nov. 2014.

Janda, Kenneth, Jeffrey Berry, and Jerry Goldman. The Challenge of Democracy: American Government in Global Politics. Cengage Learning, 2011.

Komisar, Harriet L. The Effects of Rising Health Care Costs on Middle-Class Economic Security. AARP Public Policy Institute, 2013.

Sood, Neeraj, Arkadipta Ghosh, and J. Escarse. “The Effect of Health Care Cost Growth on the US Economy.” Office of the Assistant Secretary for Planning and Evaluation, US Department of Health and Human Services (September). Available at (http://aspe. hhs. gov/health/reports/08/healthcarecost/report. html (HHS) (2007).