Question

1. There has been a lot of controversy about the individual mandate in the ACA. The penalty for not complying with the individual mandate is so low, compared with the lowest price policy in any marketplace, many feared and now observe that many young people are not buying these new insurance products. This can be modeled (as a first approximation) by assuming the lowest risk folks do not end up in the new marketplace insurance pool. What would that do to the community rate in the marketplace? And what would that do to pressure from the middle risk group to allow them to buy in a risk rated environment as opposed to a community rated environment? Which environment would most insurers and most people prefer? Why?

Answer 1

Affordable Cafe Act (ACA) is the reformation of Medical Insurance Act introduced by the then President Obama in 2010. The ACA was amended under the Patient Protection and Affordable Care Act. It actually subsidized the insurance coverage for the common people and the payment provision and the price of the insurance coverage was also reduced to considerable extent. But at the other side, It was expected due to introducing ACA act, the Federal deficit was able to reduce for certain extent. On that time, the Fed government also increased the tax for the medical aid products like Eye Glasses, Hearing aids, etc. in order to balance the Federal deficit. So it is widely proved the deficit was not reduced to expected level. After change in the government, the President Trump has made structural change in the possessing the provisions of ACA. I mean the percentage of share of the medical insurance was reduced in the level in order to balance the Federal deficit.

We can judge now the community rate in the insurance market place by basing the above discussed facts to prove the community rate in the market place. The insurance rate should can be subsidized accordingly with the income status of every people. But the cost of providing services to all set of people is shooting up to very high level in every stages of medical industries throughout the year. In order to provide incentive to the corporate medical industries. The Fed government also has the Progressive Taxation system. Such taxation system urges the medical insurance companies to buy more compensation from the people irrespective of their economical strength.

This poses heavy pressure to the middle risk group though they have ability to pay for the medical needs in the short-run period. There was drastically reduce in the figure of enrollment from 9.2 million to 8.5 million is due to heavy price of insurance premium. This situation was actually actions against the community rated environment. Such community rated environment refers to the research done on the basis of economic and cultural back ground of all the people of US nations.

At last the Supreme Court of Federal Government amended final Medical Law to protect the interest of the common people irrespective of their economic background and cultural beliefs. And also recently the medical agents who bridged the gap between the insurers and the Hospital industries faced lot of monetary issues. And also the basic funding for such marketplace insurance experts are stopped. So the Environment of Optimal insurance amidst discrimination against economic barriers are mostly preferred by all the people of US nation. The above mentioned facts proves the preference for choosing the Environment of Optimal insurance.