## Health and Care

  
  
The United States of America operates on a level of capitalism. If you withdraw money from an ATM that ATM is privately owned by a person that thought it would be a good idea to place the ATM there. If you purchase a product on Amazon.com that product is sold to you by a person that purchased it in bulk and sold it to you individually for a profit. Many Countries practice different forms of distribution of wealth from socialism, where the government distributes essential goods, to capitalism, where the government acts more like a referee and allows individuals to distribute their own wealth. Living in a Country that is labeled Capitalistic comes with a negative stigma associated with what can only be defined as "A Human Right", a product or service that should not be exploited capitalistically because of its essential need for people in society. These things can be housing, food, utilities (water, electric ect.) and finally healthcare. The drive behind living in capitalism is that we all exchange products and services for other products and service we need. A man can dedicate himself to building homes, another will facilitate the electric another will focus on the installation of sewage and a productive society will form where wealth and service is distributed. In theory, this ideology works, but as a society grows bigger the distribution of wealth gets very complex. With the complexity comes a situation where a portion of the citizens in the society will not be able to afford human right products like healthcare and housing ect. Either because of health disabilities or wages of their employment, the citizen will not be able to participate in the objective of capitalism because the cost of their human rights is out of reach compared to what they make in terms of income. Healthcare is one of the biggest subjects of this issue because over the last few decades it has gotten so expensive that private companies provide a service where the companies pay for the healthcare out of pocket and only charge consumers a monthly service premium that mitigates the cost of paying for the actual health care. In addition, not only do customers only pay for the premiums, the premiums themselves are so unaffordable that it is now common practice for the healthcare premiums to either be paid by an employer or under a government subsidy. Prices of health treatments such as office visits, diagnoses and surgeries elevated exponentially, not just for participants in the government assistance program but the average consumer as well, after the Affordable Care Acts was introduced and is a clear sign the government should not subsidize products in the marketplace.  
  
One of the ideas of our society is wages of the average citizen should increase along with the cost of products and services. If in a year the price of housing goes up two percent, then the medium income across the board should also increase by two percent. That eliminates the outcome of citizens in the society developing a situation where the wages is inconsistent with pricing. Every part of running a society everything sounds great in practice and this situation is a perfect example. It sounds great to say that every single year everyone increases their prices, and everyone gets a pay increase, does it not? Well, when you right out the formula for capitalism you over look a crucial part, everyone wants to win. Every company participating has to ensure profits go up by either increasing revenue and or decreasing costs to produce the product or service. This is the reason why at times the gap between affordable products and livable wages begin to drift. As a company attempts to minimize their expenses, which employee wages is included in expenses, they also tackle the issue of increasing revenue, which raising product pricing is a form of generating revenue a company will knowingly charge more and attempt to pay less because of an objective cultivated by capitalism. There are statistics that come straight from government entities that show the average medium income in Arizona in the year 2009 being 47,106 and in 2019 increasing by twenty two percent to 57,459. With these numbers in a perfect environment, we should expect overall costs of products to increase by the same amount. By these calculations if healthcare premium is 100 a month in 2009 that means the monthly premium in 2019 should now be 122. This is how a society should function on paper to ensure that a company is prospering but at the same time the society is not being steam rolled into a situation they cannot afford. According to historical data from the Center of Medicaid Services the total expenditures went up by fifty percent from 2009 to 2019. In an environment where a product accelerates in prices faster then the average consumer can afford it there seems to be results that cause financial burdens on the people of the society. Loans need to be taken out, people need to file for bankruptcy and overall moral goes down. Referenced in the paper earlier, in this scenario a capitalistic environment cannot intervene and decide how the product gets distributed. The approach that is currently in practice is the government applying monies to citizens that do not fit the financial criteria needed to afford the essential product, in this case healthcare.  
  
In 2008 a bill was introduced into law that allowed the government to subsidize healthcare for the average American that according to a mathematical calculation did not meet the criteria to be able to purchase insurance on their own. This law was the federal governments attempt at ensuring all of its citizens have access to affordable care. The concepts in the law took two approaches, a concept that takes premium revenue from companies and ensures that they are used only for cost of health care expenses and second a formula that designates if a person can get help from the government for their healthcare. The first approach is known as the 80/20 rule. It states that insurance companies must take only twenty percent of their revenue on overhead and the rest of the eighty percent on cost of health. Again, in paper this idea works wonderfully because you are essentially telling a company that they can only profit twenty percent and spend the rest on healthcare. When this rolled out into practice it did not work as intended. When the government assumed the eighty percent would discourage price gauging it left multibillion-dollar companies trying to find a way to not only be profitable but increase the profits before the affordable care act was rolled out. How does a company get thrown a curve ball where they must make the same money they made the year prior, increase their profits and on top of all that no longer profit more than twenty percent of their revenue? The way around this situation is to allow the providers of health care such as hospitals, doctors and medication to charge more for the services they were previously providing, here is the math. If it costs 100 dollars for the doctor before the affordable care act once the 80/20 rule is in effect the price for the doctor becomes 300 hundred and now provides a higher expense for medical care therefor allowing the insurance company to charge a high premium in turn netting more profit. We can see this clear in the analysis of a famous health insurance company by the name Cigna Medical Group. Cigna medical group is a classic example because their major product line includes medical health insurance. The tailor their products to the individuals that need a tax subsidy to afford healthcare and also provide products for average Americans. In the year 2010 Cigna Medical group released an Earning per share of four dollars and forty-six cents. Earnings per share is an indicator of how much a company is making through out the year and the amount the company can pay out its investors because of the gross profit they generate. This is why Earnings Per share is a clear indicator that a company is doing well because not only is the company profitable, but it has enough money to withdrawal and give it back to the investors. Fast forward to 2015 the earnings per share for the same company is four dollars and sixty-six sense. The earnings that the company administered was literally double it administered five years prior.  
  
The corona virus pandemic is an event that taught society a lot of things. The biggest take away was the behavior of the airline industry because of its service. Its service consists of putting hundreds of strangers in an air tight confined plane and traveling more then 45 minutes. The service was in direct violation of the economic shut down imposed by the united states government because it would result in the coronavirus being able to travel throughout the passengers. The prices of airline tickets quickly fell and what was once an expense flight ticket was now pennies on the dollar. This occurred because of a simple economic concept named supply and demand. People were not flying at all which cause the demand for flying reach zero. When the demand for a product falls so does its pricing, that is why the prices for an airline ticket is pennies on the dollar. Grabbing that event and apply it to products that are being overcharged can easily solve the price gauging coming form health insurance companies.  
  
Capitalism can be very complex. The larger a society is the more complex the solution will be. Capitalism has a major problem that incentives spending less and charging more causing gaps between wages and products, The key thing to never throw out the window is that there will always be a demand that correlates with its price. If you stop buying cars, the cars will cost less. If you do not buy belts the price of the belts will be less. If we analyze what government subsidies do is it encourages companies to continue their price with the demand slowly coming more and more from the government for the people. If it cost 100 dollars a month for a premium insurance and next year they raise it to 150 dollars but wages don't go up as fast who will have to fill that gap? The consumers slowly stop demanding the product because they cannot afford it, for example as referenced above the average consumer does pay for health products, health insurance not even for the premium as it is paid through the employer. The pricing for insurance has removed its demand to the point where it services customers but collects the premium from either the government or the consumer's employer. In a different scenario where we approached the same problem in the attitude, we treated airlines this would not be an issue. Governments should not be providing subsidies for products.