Mexico achieved universal health care in 2012, less than a decade after the Mexican government reformed its health policy. As the U.S. Congress continues to debate about the full implementation of the Affordable Care Act (ACA) and its effect on the nation's economy, many U.S. manufacturers are facing the possibility of additional challenges provide employees with health insurance that complies with ACA standards. In fact, health care costs are on the rise throughout the U.S., making it more expensive for manufacturers to employ the large number of workers they need to meet production demands. Although there are numerous benefits to expanding to Mexico, such as employing a highly skilled workforce and the low cost manufacturing climate, offshoring to the country allows U.S. businesses to reduce their health care costs while still hiring experienced workers.
Challenges in the US
While other countries have instituted universal health care, the U.S. continues to look for ways to do so that will benefit Americans and U.S. companies. Supporters of the ACA cite a healthier country while opponents say expansion of coverage won't be affordable for the majority of the country, including both employers and individuals. According to The New York Times, the endless debate over the pros and cons of health care reform may continue to be an issue well into the near future. In fact, with deep support and opposition to the ACA, the ongoing debate about the legislation - and health care reform in general - doesn't show any chances of slowing down in the U.S. any time soon.
In addition to the continuous debates over the ACA, health care costs are rising in the U.S., according to a new study. Conducted by global financial market indices provider S&P Dow Jones Indices, the S&P Healthcare Claims Indices examined claims data from 33 health insurance companies and providers in the U.S. during the year ending May 2013. The study found health care costs rose overall, with prescription drug expenditures increasing 3.5 percent, drug costs by 0.6 percent and medical costs by 4.2 percent between May 2012 and May 2013 compared to the previous 12-month period.
According to the study, the rate of increase of health care costs is slowing, but continues to climb higher than disposal personal income levels within the country. This results in less affordable health care for the U.S. population and for employers that offer coverage to their employees.
Benefits of Mexico's universal health care system
Healthcare Global reported the Mexican health care system has challenges as well, but the country is already moving to mitigate these problems for its citizens and businesses within the country. According to the source, Mexico started providing universal health insurance in 2003. After the implementation, 50 million previously uninsured people were offered access to health care, with such benefits as preventative care and vaccines. According to The Sacramento Bee, while there is a higher tax on medical procedures and treatments in Mexico, it is more affordable for residents and employers to obtain coverage than in the U.S.
Lower costs are a benefit many U.S. businesses may not be aware of when they offshore their production processes to Mexico, but manufacturers need to be sure they are able to comply with Mexican regulations regarding employee benefits in order to see advantages. Partnering with an experienced shelter company that provides human resources and management services can help companies comply with Mexico's employment laws and standards. Shelter companies also understand which types of benefits manufacturers need to provide their employees. U.S. businesses can see numerous compliance violations if they expand to Mexico without the aid of a knowledgeable shelter company.
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