U.S. Health Insurance System
The U.S. has, perhaps, the most complicated health care coverage system in the world. Although it is primarily a fee-for-service system, the primary means of accessing health care is through either an insurance policy (public or private) or as a direct payment from client (patient) to provider (doctor). Insurance can be expensive, and even with all the various forms of coverage, there are millions of Americans without any insurance whatsoever. This means they either do not access health care, or they pay as they go when they can afford it. In addition to private and public insurance, there are specific government-funded programs for persons with disabilities, children, and veterans.
Keywords Blue Cross & Blue Shield Plans; Deductible; Disability Income Insurance; Health Maintenance Organization (HMO); Health Savings Accounts; Long-Term Care Insurance; Managed Care; Medicare; Medicare Advantage; Indian Health Service; State Children's Health Insurance Program (SCHIP)
The U.S. Health Insurance System
The United States continues to struggle with one of the most complicated health care systems in the world. It is a highly complex system of private and public insurance plans. The private plans are for people whose employers partially or fully subsidize their employees’ health coverage. There are also individuals who pay for their own private plan and can choose whichever plan they prefer. Whichever plan they decide to go with, there is no such thing as complete coverage without additional costs. Even with private coverage there is always an annual deductible as well as copayments for almost everything. In the case of a serious surgery and long hospital stay, the out-of-pocket payments can end up costing thousands of dollars, even with "complete coverage."
There is also a complex system of public coverage for people who cannot afford private health care insurance or whose employers do not provide it. In addition, there is government coverage for persons with disabilities and seniors, for people in or formerly in military service, and for Native Americans. And by late 2013, millions of Americans continued to be without any health insurance whatsoever.
Even private health insurance can have its problems. Although coverage is offered, it does not mean it is always provided. Coverage is offered, and individuals or companies pay the premium. However, especially with big plans like Blue Cross/Blue Shield, there is a deductible, which has risen continuously. A high annual deductible can range upwards of $1,250 (Armour, 2013). This means that before the insurance coverage actually kicks in, the person has to pay at least that amount in health care costs first. Another issue is what services the insurance will and will not cover.
Blue Cross has a long history in the U.S. as it was established during the Depression, before which there was no health insurance. Although the Blue plans have established themselves across the country since the early twentieth century, they are not the same from state to state: "Blues plans today differ considerably from one another in such areas as market share, management philosophy, and the types of products they offer to their three primary market segments--individual, small group, and large group" (Aronovitz, 1994, p. 5). Another issue with the Blues has been that of financial solvency; they must have the money in order to provide payment for the services. To ensure this, state regulations are in place. However, back in the 1990s, there was real cause for concern: "The revelation that several Blues plans were in poor financial condition prompted fundamental questions about all Blues plans because of the large number of Americans they insure" (Aronovitz, 1994, p.4).
Plans such as these have often had very strict guidelines regarding who they would cover and why. For example, in past, it was likely that anyone who wanted private coverage would have to undergo a thorough medical examination. They might not receive coverage for a prior medical condition, and this could leave them paying hundreds or even thousands of dollars in out-of-pocket expenses. Insurance companies such as the Blues have not been enthusiastic about health care reform. Reforms enacted under the 2010 Patient Protection and Affordable Care Act (PPACA) forced insurers to accept everyone, regardless of their state of health, and to cover them for prior conditions. This means insurers must pay out hundreds of thousands of dollars (possibly millions) in coverage that they formerly would never have paid.
Health Maintenance Organizations (HMOs)
Although these organizations cover far fewer people than Blues plans, health maintenance organizations (HMOs) have gained in popularity. HMOs are not only health insurers but also health care providers. The HMO works by providing coverage for a specific network of providers, who may all be part of a single multispecialty practice, work in HMO-run facilities, belong to multiple individual or group practices, or be a collective of solo practitioners. Regardless of the HMO network arrangement, the providers receive a fixed fee that has been prearranged. One of the primary philosophical foundations of the HMO is preventive care. They fund routine physical examinations in order to ensure ongoing good health. However, like other insurance plans, they also impose copayments and out-of-pocket expenses depending on how much coverage is in the plan (Blostin & Marclay, 1983).
In the past, the HMO commonly put a cap or a ceiling on how many days of coverage could be received within the scope of the plan and also a limit on how much money would be paid out for a person within a single year. One of the real weaknesses in the HMO plan was that it often limited the number of days one could receive coverage for mental health care or an extended stay in a nursing facility (Blostin & Marclay, 1983).
Managed care was an initiative in the private sector to address the spiraling costs of medical care, created to "manage health care costs." Managed care has become an integral part of the American health care system. It rose to some prominence during the presidency of Ronald Reagan and began as a way to control the amount of money being paid out by Medicare. Managed care was considered an excellent way of combining two important aspects of health care—funding and providing referrals. At the time, managed care was seen as a way of bringing down the costs of health care in the United States. Managed care generally will not cover services that are experimental in nature, cosmetic, or for which there is no standard of medical practice. There are also limitations to services that managed care will cover.
A managed care plan may take one of many different organizational forms. Managed care plans may be HMOs, preferred provider organizations (PPOs), exclusive provider organizations (EPOs), or point-of-service plans (POSs). Like traditional HMOs, PPOs, EPOs, and POSs all use an approved network of providers; the differences lie in their coverage of services render by out-of-network providers. Under a PPO, a patient who receives out-of-network care can be charged higher deductibles, higher coinsurance, or other out-of-pocket expenses, while an EPO will not pay for any out-of-network care except in emergencies. With a POS plan, a patient pays for out-of-network care and is reimbursed according to a fee schedule or other predetermined scale for costs.
Even if managed care is not the "be-all and end–all," it may nevertheless provide some value to consumers. Managed care is meant to be an option for consumers that provides both the options for the consumers and streamlines services by including the financing and delivery of these health care services. One of the primary goals of managed care is to match patients with appropriate health care providers in the shortest time possible. By providing these matches, managed care is meant to be a way to limit the stress on consumers. In the final analysis, managed care underscores that health care is a business in America. Every party in the business of health care (except the consumer) is out to make a profit—the insurance companies, the health care providers, and anyone else with a stake in the businesses.
Health Savings Accounts
Health savings accounts represent a relatively new approach to health insurance. These accounts allow people to save money for health care tax free. According to Hoffman and Tolbert (2006),
Health Savings Accounts are a type of medical savings account that allow consumers to save for medical expenses on a tax-free basis. They are linked with high deductible health plans (HDHPs), and together these insurance and savings options represent a new approach to health care, commonly referred to as consumer-directed care. Health Savings Accounts (HSAs) were federally enacted as part of the Medicare Prescription Drug Improvement and Modernization Act of 2003 (p. 1).
The main problem with HSAs is that they tend to be useful for families with higher incomes, since families with lower incomes tend not to have a sufficient amount of disposable income to put into the account. Another group of people who do not benefit from HSAs are people with disabilities and persons with chronic health problems or conditions. The reason for this is the high deductible set by these plans. Those with ongoing health problems tend to visit the doctor (and other health care providers) far more often and therefore end up paying high rates of out-of-pocket expenses. According to Hoffman and Tolbert (2006), "Health Savings Accounts and HDHPs are likely to be more attractive to healthy individuals and families who have had few major medical expenses" (p. 3).
The reason for the creation of the HSA was to provide a way for people to pay for medical expenses not covered by insurance or other reimbursements (Lyke, Peterson, & Ranade, 2005).
Public Health Coverage
Medicaid is a federal program that provides health insurance coverage to qualifying very low-income Americans, particularly among those over age sixty-five and children under eighteen. Medicare is the program that provides people over sixty-five with medical care. It also provides support...
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