The Need for Public Good
A public good can be described as a product that individuals can consume without exclusion where the usage by one person does not limit the other. It involves goods and services that are consumed by the society as a whole and are normally financed by the tax revenues. The public goods are normally consumed without reducing its availability to other potential users (Principles of Microeconomics). Another vital aspect of the public good is that it cannot be denied to people who do not engage in directly paying for them. An example of a scenario where a public good would most apply is the healthcare system in the United States. The public goods are vital for society. However, the problem of known as the ‘'free-rider'' in most cases arises. The problem occurs when an individual fails to contribute to the payment of the public good because they would still participate even if they didn't. However, the President of the United States, Donald Trump has acknowledged the provision of healthcare as a public good is a complex exercise that many people have failed to appreciate.
The implication on the complexity is pointed to the market failure especially in the provision of social services such as healthcare. Market failure means a situation whereby the product or service that is demanded by the consumers is not equal to the amount supplied. The ‘'free rider'' effect has been heavily implicated for the complexity involved in the provision of healthcare for all. Certain people believe that there is someone who has to pay their bills. Moreover, if the government decides to take the mandate to offer healthcare as a free good, the result would be that the money would be raised through taxes so that nobody rides freely on the gains of others. However, the US is experiencing major national debts that currently stand at 18 trillion dollars, therefore, rendering it unable to provide the socialized healthcare where the government is mandated with the duty to pay for the whole cost of providing the health services to the people in the country. It is also vital to note that one key characteristic of the public good is that it must be available to everyone and should not exist in limited amounts. The US laws provide for the emergency care centers to provide fundamental health services to those in need and with that regards no one should be turned away from the emergency area without at least getting a minimal health attention. The government has over the past intervened in these cases by providing financial support and grants. Therefore, if the government cuts its support, it means that a majority of patients seeking emergency and urgent treatments would be turned away.
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If the US Health Sector Qualifies For Government Intervention
Three important reasons have been outlined as to why the US healthcare system has experienced major problem over the past years with regards to government intervention. The first problem is the market failure. With the huge American population, it has been increasingly difficult to provide healthcare as a socialized care that is funded by the government, given the economic situation of the country that is marked with heavy debts. Therefore, the full participation of the government in the provision of healthcare might result in market failures especially in the other areas of the economy. The second major that makes the US still unfit to offer the governmental intervention in the health services is lack of responsibility among the citizens. The free rider effect is a growing trend in the provision of public goods where some individuals feel that it is not their responsibility to pay for the services, and furthermore, they would still enjoy the services without necessarily making the payments (Makinde, 2017). The free rider problem can cause the depletion of the tax base and can also result in the depletion of the service provided if more people develop a similar mentality. The third problem with the US healthcare system is the failure to utilize the insurance companies properly. With the fluctuation of the insurance prices due to the increasing numbers of sicker people, the less sick people opted out of the insurance plan causing the company to make less profit. With such performance, the insurance companies are reluctant in making certain deals with the government due to the fear of running losses.
Obama Care and Trump Care
The Affordable Care Act was a healthcare initiative by President Barack Obama that sought to ensure that everybody accessed the healthcare services through insurance. It also sought the reduction in healthcare services and ensuring that people played a part in paying for it too. The Obama Care also suffered the common problem of the free riders and sought to end it by compelling everyone to have an insurance cover failure to which fines will be imposed on individuals. On the other hand, the trump care is against the principles of the Affordable Care Act and seeks for an approach where health care should only be provided for those who are in need of it. The government is also reluctant in paying for these services due to economic implications. In my opinion, the Obama Care is the best intervention in preventing disparities in the healthcare sector of the United States. In dealing with the economic challenges, the government should be strict in dealing with free riders who should be severely punished for their irresponsible. The government should also negotiate good terms with the insurance companies to ensure they make reasonable profits for covering the citizens.
References
Makinde Y. (2017), The Economics of Healthcare https://economicdevelopments.wordpress.com/2017/03/05/first-blog-post/
Principles of Microeconomics https://openstax.org/details/principles-microeconomics
