ACA good for economy | The Triangle

ACA good for economy

One of the U.S.’ most hot-button topics today is health care reform, which was recently brought to the forefront of debate on the floor of Congress and the dinner tables of families alike, in part by the Affordable Care Act,  endorsed by President Obama, which will be largely implemented  on Jan. 1, 2014. Of course, there has been a great deal of controversy regarding the merits of health care reform, and the ACA has been challenged at every turn.

From long congressional debates to the Supreme Court and back to congressional debates, the ACA has faced opposition since its conception. Some of the largest groups opposed to the act’s implementation have been capitalist, fiscally conservative factions of the Republican Party who feel that the ACA would impair the capitalistic nature of the health care market, cutting innovation and greatly hindering the economy. However, I would argue that capitalists should, by all rights, be among the first in line to support the ACA.

First, however, let me offer a brief defense of capitalism. To start, think of the capitalist free market as a big pie, and everyone gets a slice, but not everyone’s is the same size. In fact, the richest 60 percent of Americans in this scenario (from 2007) get 99.6 percent of the pie, leaving 0.4 percent to be divided between the poorest 40 percent. This is far from ideal, but the cool thing about capitalism is that, thanks to competition between firms leading to efficiency and innovation, the pie grows larger and larger over time. Because of that, even if the amount of pie you have now is proportionately equivalent to how much you had before, the overall amount of pie you get increases. That would be why you probably have a computer in your home and your grandparents probably didn’t. Essentially, capitalism creates free pie (well, not free, because innovation generally requires the acquisition and consumption of nonrenewable resources and often leads to negative externalities like pollution — but whatever, free pie).

Now, capitalism is nice (who doesn’t like free pie?), but there is one catch: To get the benefits of capitalism (free, delicious pie), you need to create a safe environment for the previously mentioned competition and innovation so that the pie can grow. Basically, you need innovation to create awesome computers, and then you need competition to drive down the price of said computers. This creates more pie and also more jobs as more and more people are required to run and work in firms, or bake all the extra pie.

The problem is that the health care system in the United States isn’t the best at creating a safe environment for competition and innovation. How so? Well, for starters, let’s look at where Americans get their health insurance. The most recent Gallup poll on the subject, covering 2011, shows that a plurality of U.S. citizens, 44.6 percent, get their insurance from their employers. This is great for the 44.6 percent, but if you don’t get insurance from your employer, it can be very hard to get it at all. This is because insurance companies can deny you coverage based on past health problems, commonly known as pre-existing conditions. This can influence major life decisions for people with pre-existing conditions. For example, a worker who wants to start her own business may decide to instead stay at her job at a big company because she doesn’t want to risk being denied health coverage. A college graduate may decide to pay for graduate school instead of entering the workforce because he doesn’t want to risk becoming uninsured and he knows that full-time students are guaranteed health coverage.

The health care reform that the ACA is trying to establish eliminates denial of coverage based on pre-existing conditions (those conditions, by the way, are ludicrously vague; one can be denied coverage because of asthma or tinnitus), and it allows children to stay on their parents’ health care plan until they are 26 years old, which is nice for college graduates who don’t want to pay for overpriced graduate school while still holding debt from overpriced undergraduate school just for the health care benefits. Allowing insurance companies to deny health care to people who want to start their own businesses or work for small firms isn’t just bad for the uninsured would-be entrepreneurs; it hurts everyone and hinders the economy. If people don’t feel comfortable taking the risk of starting or supporting a small business, the pie doesn’t grow as fast. Even worse, a lack of insurance leads to lack of spending, as people allocate every cent they can spare to the “I-Don’t-Want-to-Go-Bankrupt-and-Die-if-I-Fall-Out-of-a-Tree Fund.”

According to the aforementioned Gallup poll, 17.1 percent of Americans are uninsured. That’s almost one-fifth of the citizenry of the U.S. not contributing to the economy with their money — almost one-fifth keeping the general public, and themselves, from getting more pie. Health care reform would allow all of these money hoarders to begin getting insurance and start using their funds to, say, start a business (and create jobs), invest in companies (creating more jobs in those companies), or even just start buying more goods like cars and iPads (creating jobs for car salesmen and techy Apple Store workers). My point is that freeing the uninsured allows them to start helping to make more pie rather than stop it from growing. Now, of course, all these uninsured folks could just go work for large corporations and get that company health care policy, but if that were to happen, there would be no small business, no company investment, and no extra car and iPad sales.

The decisions of these people should be based on where their respective abilities can best meet the growing world’s growing needs, not where they can get health insurance. The crazy choice of whether one should prioritize their health or their goals is one lived by millions of Americans. It has stifled job creation, crippled innovation, and basically stopped our pie from growing to the size that it ought to be. I don’t know about you, but if there’s one thing that gets me riled up more than health care reform, Syria and abortion combined, it’s having less pie.

Talha Mukhtar is a freshman majoring in legal studies. He can be contacted at [email protected]