Tuesday, October 6, 2015

Health care reform in the United States



Health care reform in the United States has a long history. Reforms have often been proposed but have rarely been accomplished. In 2010, landmark reform was passed through two federal statutes enacted in 2010: the Patient Protection and Affordable Care Act (PPACA), signed March 23, 2010, and the Health Care and Education Reconciliation Act of 2010 (H.R. 4872), which amended the PPACA and became law on March 30, 2010.

Future reforms and ideas continue to be proposed, with notable arguments including a single-payer system and a reduction in fee-for-service medical care. The PPACA includes a new agency, the Center for Medicare and Medicaid Innovation, which is intended to research reform ideas through pilot projects.

History of national reform efforts

Here is a summary of reform achievements at the national level in the United States. For failed efforts, state-based efforts, native tribes services and more details generally, see the main article History of health care reform in the United States.

1965 President Lyndon Johnson enacted legislation that introduced Medicare, covering both hospital and general medical insurance for senior citizens paid for by a Federal employment tax over the working life of the retiree, and Medicaid permitted the Federal government to partially fund a program for the poor, with the program managed and co-financed by the individual states.
1985 The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) amended the Employee Retirement Income Security Act of 1974 (ERISA) to give some employees the ability to continue health insurance coverage after leaving employment.
1996 The Health Insurance Portability and Accountability Act (HIPAA) not only protects health insurance coverage for workers and their families when they change or lose their jobs, it also made health insurance companies cover pre-existing conditions. If such condition had been diagnosed before purchasing insurance, insurance companies are required to cover it after patient has one year of continuous coverage. If such condition was already covered on their current policy, new insurance policies due to changing jobs, etc... have to cover the condition immediately.
1997 The State Children's Health Insurance Program, or SCHIP, was established by the federal government in 1997 to provide health insurance to children in families at or below 200 percent of the federal poverty line.
2010 The Patient Protection and Affordable Care Act, also known as Obamacare, was enacted, providing for the phased introduction over four years of a comprehensive system of mandated health insurance with reforms designed to eliminate "some of the worst practices of the insurance companies"—pre-existing condition screening and premium loadings, policy cancellations on technicalities when illness seems imminent, annual and lifetime coverage caps. It also sets a minimum ratio of direct health care spending to premium income, and creates price competition bolstered by the creation of three standard insurance coverage levels to enable like-for-like comparisons by consumers, and a web-based health insurance exchange where consumers can compare prices and purchase plans. The system preserves private insurance and private health care providers and provides more subsidies to enable the poor to buy insurance.

Motivation


International comparisons of healthcare have found that the United States spends more per-capita than other similarly developed nations but falls below similar countries in various health metrics, suggesting inefficiency and waste. In addition, the United States has significant underinsurance and significant impending unfunded liabilities from its aging demographic and its social insurance programs Medicare and Medicaid (Medicaid provides free long-term care to the elderly poor). The fiscal and human impact of these issues have motivated reform proposals.


Health spending per capita, in US$ PPP-adjusted, compared amongst various first world nations.
According to 2009 World Bank statistics, the U.S. had the highest healthcare costs relative to the size of the economy (GDP) in the world, even though estimated 50.2 million citizens (approximately 15.6% of the September 2011 estimated population of 312 million) lacked insurance. In March 2010, billionaire Warren Buffett commented that the high costs paid by U.S. companies for their employees' health care put them at a competitive disadvantage.


Life expectancy compared to healthcare spending from 1970 to 2008, in the US and the next 19 most wealthy countries by total GDP.
Further, an estimated 77 million Baby Boomers are reaching retirement age, which combined with significant annual increases in healthcare costs per person will place enormous budgetary strain on U.S. state and federal governments, particularly through Medicare and Medicaid spending (Medicaid provides long-term care for the elderly poor). Maintaining the long-term fiscal health of the U.S. federal government is significantly dependent on healthcare costs being controlled.

Insurance cost and availability

In addition, the number of employers who offer health insurance has declined and costs for employer-paid health insurance are rising: from 2001 to 2007, premiums for family coverage increased 78%, while wages rose 19% and prices rose 17%, according to the Kaiser Family Foundation. Even for those who are employed, the private insurance in the US varies greatly in its coverage; one study by the Commonwealth Fund published in Health Affairs estimated that 16 million U.S. adults were underinsured in 2003. The underinsured were significantly more likely than those with adequate insurance to forgo health care, report financial stress because of medical bills, and experience coverage gaps for such items as prescription drugs. The study found that underinsurance disproportionately affects those with lower incomes — 73% of the underinsured in the study population had annual incomes below 200% of the federal poverty level. However, a study published by the Kaiser Family Foundation in 2008 found that the typical large employer preferred provider organization (PPO) plan in 2007 was more generous than either Medicare or the Federal Employees Health Benefits Program Standard Option. One indicator of the consequences of Americans' inconsistent health care coverage is a study in Health Affairs that concluded that half of personal bankruptcys involved medical bills, although other sources dispute this.

There are health losses from insufficient health insurance. A 2009 Harvard study published in the American Journal of Public Health found more than 44,800 excess deaths annually in the United States due to Americans lacking health insurance. More broadly, estimates of the total number of people in the United States, whether insured or uninsured, who die because of lack of medical care were estimated in a 1997 analysis to be nearly 100,000 per year. A study of the effects of the Massachusetts universal health care law (which took effect in 2006) found a 3% drop in mortality among people 20–64 years old - 1 death per 830 people with insurance. Other studies, just as those examining the randomized distribution of Medicaid insurance to low-income people in Oregon in 2008, found no change in death rate.

Waste and Fraud



In December 2011 the outgoing Administrator of the Centers for Medicare & Medicaid Services, Dr. Donald Berwick, asserted that 20% to 30% of health care spending is waste. He listed five causes for the waste: (1) overtreatment of patients, (2) the failure to coordinate care, (3) the administrative complexity of the health care system, (4) burdensome rules and (5) fraud.

An estimated 3%–10% of all health-care expenditures in the U.S. are fraudulent. In 2011, Medicare and Medicaid made $65 billion in improper payments (including both error and fraud). Government efforts to reduce fraud include $4.2 billion in fraudulent payments recovered by the Department of Justice and the FBI in 2012, longer jail sentences specified by the Affordable Care Act, and Senior Medicare Patrols—volunteers trained to identify and report fraud.

In 2007, the Department of Justice and Health and Human Services formed the Medicare Fraud Strike Force to combat fraud through data analysis and increased community policing. As of May 2013, the Strike Force has charged more than 1,500 people for false billings of more than $5 billion. Medicare fraud often takes the form of kickbacks and money-laundering. Fraud schemes often take the form of billing for medically unnecessary services or services not rendered.


Quality of care


There is significant debate regarding the quality of the U.S. healthcare system relative to those of other countries. Physicians for a National Health Program, a political advocacy group, has claimed that a free market solution to health care provides a lower quality of care, with higher mortality rates, than publicly funded systems. The quality of health maintenance organizations and managed care have also been criticized by this same group.

According to a 2000 study of the World Health Organization, publicly funded systems of industrial nations spend less on health care, both as a percentage of their GDP and per capita, and enjoy superior population-based health care outcomes. However, conservative commentator David Gratzer and the Cato Institute, a libertarian think tank, have both criticized the WHO's comparison method for being biased; the WHO study marked down countries for having private or fee-paying health treatment and rated countries by comparison to their expected health care performance, rather than objectively comparing quality of care.

Some medical researchers say that patient satisfaction surveys are a poor way to evaluate medical care. Researchers at the RAND Corporation and the Department of Veterans Affairs asked 236 elderly patients in two different managed care plans to rate their care, then examined care in medical records, as reported in Annals of Internal Medicine. There was no correlation. "Patient ratings of health care are easy to obtain and report, but do not accurately measure the technical quality of medical care," said John T. Chang, UCLA, lead author.


Public opinion


Public opinion polls have shown a majority of the public supports various levels of government involvement in health care in the United States, with stated preferences depending on how the question is asked. Polls from Harvard University in 1988, the Los Angeles Times in 1990, and the Wall Street Journal in 1991 all showed strong support for a health care system compared to the system in Canada. More recently, however, polling support has declined for that sort of health care system, with a 2007 Yahoo/AP poll showing a majority of respondents considered themselves supporters of "single-payer health care," a majority in favor of a number of reforms according to a joint poll with the Los Angeles Times and Bloomberg, and a plurality of respondents in a 2009 poll for Time Magazine showed support for "a national single-payer plan similar to Medicare for all." Polls by Rasmussen Reports in 2011 and 2012 showed pluralities opposed to single-payer health care. Many other polls show support for various levels of government involvement in health care, including polls from New York Times/CBS News and Washington Post/ABC News, showing favorability for a form of national health insurance. The Kaiser Family Foundation showed a majority in favor of a form of national health insurance, often compared to Medicare, and a Quinnipiac poll in three states in 2008 found majority support for the government ensuring "that everyone in the United States has adequate health-care" among likely Democratic primary voters.

A 2001 article in the public health journal Health Affairs studied fifty years of American public opinion of various health care plans and concluded that, while there appears to be general support of a "national health care plan," poll respondents "remain satisfied with their current medical arrangements, do not trust the federal government to do what is right, and do not favor a single-payer type of national health plan." Politifact rated a statement by Michael Moore "false" when he stated that "[t]he majority actually want single-payer health care." According to Politifact, responses on these polls largely depend on the wording. For example, people respond more favorably when they are asked if they want a system "like Medicare".

Uninsured rate


In June 2014, Gallup–Healthways Well–Being conducted a survey and found that the uninsured rate is going down. 13.4 percent of U.S. adults are uninsured in 2014. This is a decrease from the percentage at 17.1 percent in January 2014 and translates to roughly 10 million to 11 million individuals who gained coverage. The survey also looked at the major demographic groups and found each is making progress towards getting health insurance. However, Hispanics, who have the highest uninsured rate of any racial or ethnic group, are lagging in their progress. Under the new health care reform, Latinos were expected to be major beneficiaries of the new health care law. Gallup found that the biggest drop in the uninsured rate (2.8 percentage points) was among households making less than $36,000 a year.

Patient Protection and Affordable Care Act


After campaigning on the promise of health care reform, President Obama gave a speech in March 2010 at a rally in Pennsylvania explaining the necessity of health insurance reform and calling on Congress to hold a final up or down vote on reform. The result of his efforts was the Patient Protection and Affordable Care Act. Because Obama's party did not have a filibuster-proof majority in the Senate, the law was amended by the Health Care and Education Reconciliation Act of 2010 using the reconciliation process in which debate in the Senate is limited and the filibuster is therefore not permitted.

The legislation remains controversial, with some states challenging it in federal court[58] and opposition from some voters. In June 2012, in a 5–4 decision, the U.S. Supreme Court found major portions of the law to be constitutional.[60] However, the law continues to face legal challenges. The latest attempt at reversing the Affordable Care Act occurred during the Government Shutdown on October 1, 2013. Government officials that oppose the ACA tried to make approval of a bill to reopen the government contingent on the demise of the ACA. This attempt met with failure and the government reopened on November 16, 2013.


Uninsured Americans, with the numbers shown here from 1987 to 2008, are a major driver for reform efforts
As a result of the law, insurance companies can no longer charge members based on gender, burdening men with the health care costs of women. A study by the National Institutes of Health reported that the lifetime per capita expenditure at birth, using year 2000 dollars, showed a large difference between health care costs of females ($361,192) and males ($268,679). A large portion of this cost difference is in the shorter lifespan of men, but even after adjustment for age (assume men live as long as women), there still is a 20% difference in lifetime health care expenditures.

The act's provisions become effective over time. The most significant changes, particularly affecting the availability and terms of insurance become effective January 1, 2014. These include an expansion of Medicaid (at the option of each state) to those without dependent children and subsidized healthcare exchanges. Changes which occur earlier include allowing dependents to remain on their plan until 26, limitations on rescission (dropping insureds when they get sick), removal of lifetime coverage limits, mandates that insurers fully cover certain preventative services, high-risk pools for uninsureds, tax credits for businesses to provide insurance to employees, an insurance company rate review program, and minimum medical loss ratios.

The law creates the Patient-Centered Outcomes Research Institute to study comparative effectiveness research funded by a fee on insurers per covered life (starting at $1, increasing to $2 and thereafter adjusted according to an index). It also allowed the FDA to approve generic biologic drugs and specifically allows for 12 years of exclusive use for newly developed biologic drugs.

In addition, the law explores some programs intended to increase incentives to provide quality and collaborative care, such as accountable care organizations. The Center for Medicare and Medicaid Innovation was created to fund pilot programs which may reduce costs;[64] the experiments cover nearly every idea healthcare experts advocate, except malpractice/tort reform. The law also requires for reduced Medicare reimbursements for hospitals with excess readmissions and eventually ties physician Medicare reimbursements to quality of care metrics.

The law is also designed to complement the 2009 HITECH Act which encourages the "meaningful use" of electronic health records; for example, the law directs the government to make use of these records for analyzing healthcare provider quality.

Alternatives and research directions


There are alternatives to the exchange-based market system which was enacted by the Patient Protection and Affordable Care Act which have been proposed in the past and continue to be proposed, such as a single-payer system and allowing health insurance to be regulated at the federal level.

In addition, the Patient Protection and Affordable Health Care Act of 2010 contained provisions which allows the Centers for Medicare and Medicaid Services (CMS) to undertake pilot projects which, if they are successful could be implemented in future.

Single-payer health care


A number of proposals have been made for a universal single-payer healthcare system in the United States, most recently the United States National Health Care Act, (popularly known as H.R. 676 or "Medicare for All") but none have achieved more political support than 20% congressional co-sponsorship. Advocates argue that preventative health care expenditures can save several hundreds of billions of dollars per year because publicly funded universal health care would benefit employers and consumers, that employers would benefit from a bigger pool of potential customers and that employers would likely pay less, and would be spared administrative costs of health care benefits. It is also argued that inequities between employers would be reduced. Also, for example, cancer patients are more likely to be diagnosed at Stage I where curative treatment is typically a few outpatient visits, instead of at Stage III or later in an emergency room where treatment can involve years of hospitalization and is often terminal. Others have estimated a long-term savings amounting to 40% of all national health expenditures due to preventative health care, although estimates from the Congressional Budget Office and The New England Journal of Medicine have found that preventative care is more expensive.

Any national system would be paid for in part through taxes replacing insurance premiums, but advocates also believe savings would be realized through preventative care and the elimination of insurance company overhead and hospital billing costs. An analysis of a single-payer bill by Physicians for a National Health Program estimated the immediate savings at $350 billion per year. The Commonwealth Fund believes that, if the United States adopted a universal health care system, the mortality rate would improve and the country would save approximately $570 billion a year.

Recent enactments of single-payer systems within individual states, such as in Vermont in 2011, may serve as living models supporting federal single-payer coverage. The plan in Vermont, however, has failed.

Public option


In January 2013, Representative Jan Schakowsky and 44 other U.S. House of Representatives Democrats introduced H.R. 261, the "Public Option Deficit Reduction Act" which would amend the 2010 Affordable Care Act to create a public option. The bill would set up a government-run health insurance plan with premiums 5% to 7% percent lower than private insurance. The Congressional Budget Office estimated it would reduce the United States public debt by $104 billion over 10 years.

Balancing doctor supply and demand


The Medicare Graduate Medical Education program regulates the supply of medical doctors in the U.S. By adjusting the reimbursement rates to establish more income equality among the medical professions, the effective cost of medical care can be lowered.


Bundled payments


A key project is one that could radically change the way the medical profession is paid for services under Medicare and Medicaid. The current system, which is also the prime system used by medical insurers is known as fee-for-service because the medical practitioner is paid only for the performance of medical procedures which, it is argued means that doctors have a financial incentive to do more tests (which generates more income) which may not be in the patients' best long-term interest. The current system encourages medical interventions such as surgeries and prescribed medicines (all of which carry some risk for the patient but increase revenues for the medical care industry) and does not reward other activities such as encouraging behavioral changes such as modifying dietary habits and quitting smoking, or follow-ups regarding prescribed regimes which could have better outcomes for the patient at a lower cost. The current fee-for-service system also rewards bad hospitals for bad service. Some[who?] have noted that the best hospitals have fewer re-admission rates than others, which benefits patients, but some of the worst hospitals have high re-admission rates which is bad for patients but is perversely rewarded under the fee-for-service system.

Projects at CMS are examining the possibility of rewarding health care providers through a process known as "bundled payments" by which local doctors and hospitals in an area would be paid not on a fee for service basis but on a capitation system linked to outcomes. The areas with the best outcomes would get more. This system, it is argued, makes medical practitioners much more concerned to focus on activities that deliver real health benefits at a lower cost to the system by removing the perversities inherent in the fee-for-service system.

Though aimed as a model for health care funded by CMS, if the project is successful it is thought that the model could be followed by the commercial health insurance industry also.

High Deductible Health Plans


If you are among the growing number of individuals and families with a high deductible health plan (HDHP), managing your healthcare expenses may be a top priority. Increasingly common, HDHPs are characterized by lower premiums and higher deductibles. A deductible is a fixed dollar amount specified by the plan that insured individuals must pay out-of-pocket. Once the deductible has been reached, eligible healthcare expenses will be covered by the plan. In most cases, the deductible must be met each plan year, which is not necessarily the same as a “calendar” year.

If you are covered by a plan with a high deductible, in return for a lower premium, you will be responsible for most healthcare costs until you meet your deductible. While this may seem overwhelming, especially if you have many healthcare needs, there are options for managing and controlling your out-of-pocket healthcare costs under an HDHP.

How do you know if you have an HDHP? 

An HDHP features a lower insurance premium and a higher deductible than those of traditional health plans. Though HDHPs are usually a type of Preferred Provider Organization (PPO) plan, they also could be a Health Maintenance Organization (HMO) or a Point of Service (POS) plan. If you are unsure of the type of plan you have, and/or the deductible amount for which you are responsible before coverage kicks in, consult your plan documents, or ask your employer or health plan representative. See Alphabet Soup of Plans for more information on different types of health plans.

Your Out-of-Pocket Responsibilities Under A High Deductible Health Plan


An HDHP typically does not cover services and prescription drugs until the deductible has been met. However, some high deductible plans may cover preventive services and programs, such as prenatal care, cancer screenings, and smoking cessation programs. In these cases, the deductible applies to services that are not considered preventive. After you meet your deductible, the plan coverage provisions determine how much you will be reimbursed. Remember, you may still be required to pay co-pays and/or co-insurance for medical services and prescription drugs covered by the plan. It is a good idea to ask your plan about which services may be covered, and what your out-of-pocket responsibilities will be – before and after you meet the deductible.

Managing Expenses Under A High Deductible Health Plan


Health Savings Accounts and Health Reimbursement Arrangements

To offset HDHPs’ higher deductibles, most individuals enrolled in HDHPs are eligible to set up a tax-advantaged health savings account (HSA).  An HSA enables you to pay for eligible health expenses, including expenses before the deductible has been met, with tax-free dollars. Increasingly referred to as a consumer-driven health plan (CDHP), an HDHP coupled with an HSA can help you take control of your healthcare expenses and save for the future.

Individuals may contribute pre-tax earnings each year to their HSAs. Some employers help employees contribute to their HSAs on a regular basis through payroll deductions, and some may also elect to make contributions to employee HSAs to help them pay for healthcare expenses before they meet their deductibles.  Though contribution limits apply, individuals can save significant amounts to be used for healthcare costs through HSAs. Unlike flexible spending arrangements, individuals keep their HSAs even when they switch employers. And, any unused amounts in the account at the end of the year continue to accumulate on a tax-free basis to be used for future healthcare costs.

As an alternative to an HSA, some employers contribute to a health reimbursement arrangement (HRA), which employees can use to pay for healthcare expenses that are not reimbursed by the plan. Employees do not contribute to HRAs; any unused funds are forfeited at the end of the year. And under these arrangements, if you change jobs, you no longer have access to the HRA.

HDHPs coupled with an HSA or HRA are an effective way to manage healthcare costs. You can use tax-advantaged dollars to get the care you need, but any unused funds continue to grow tax-free until you need them. Then, once you satisfy your plan’s deductible, your insurance company will reimburse all or a portion of your healthcare costs based on the provisions of your plan.

How Does Your Plan Know When You Have Met Your Deductible?

While you are responsible for paying for services before you reach your deductible (and your HSA or HRA may provide a debit card for this purpose) under an HDHP, you or your provider will submit claims as usual and they will be tracked towards your deductible. When you receive your explanation of benefits (EOB) from your plan, it will show that the expenses will not be reimbursed because you have not yet met your deductible. Once you have satisfied the deductible, the EOB will reflect reimbursement for covered expenses according to the terms of your plan.

Know Before You Go

Under an HDHP, you are responsible for out-of-pocket healthcare costs until the deductible is met, so knowing the cost of a service or procedure in advance can help you better plan your healthcare expenses. Look up your anticipated out-of-pocket costs on the FH® Medical Cost Lookup; before you meet your deductible, the “estimated charge” amount is what will be most relevant to you.

Talk To Your Provider

In some cases, providers may be willing to negotiate their fees, or develop a payment schedule to enable you to pay for the service in installments over time. Ask your provider whether s/he would be willing to consider these options.

You also may want to ask your provider if there are less expensive alternatives to prescribed medications, such as a generic option, or a pill/injection that could be taken at home instead of in your physician’s office.

Prevention

Taking steps to prevent illness and disease is always a good idea and may also be helpful in managing — and possibly avoiding — higher costs of care. As recommended by your provider, go for preventive screenings and annual checkups, and adopt health-promoting behaviors, such as consuming a healthy diet and exercising. Preventive measures, as recommended by your provider, may help you avoid the need for costlier treatments in the future. Remember, some HDHPs cover preventive services and programs before you meet your deductible, so check with your plan to find out how these services are covered.


Your Action Plan For Managing Costs In High Deductible Health Plans


If you are enrolled in an HDHP, following these tips may help you manage your healthcare costs:

Read your plan documents carefully. Contact your employer or plan with any questions you may have about your coverage.
If you do not already have one, ask your employer about enrolling in a health savings account (HSA), or a health reimbursement arrangement (HRA).  If you are eligible, but your employer doesn’t offer an HSA, you can open an account with a local bank (or online). See A New Look at Flexible Spending Accounts, which also includes information on HSAs.
If you have funds remaining in your HSA after meeting your deductible, you may continue to use the account for co-pays, co-insurance and other qualifying healthcare expenses. An HSA cannot be used to pay for insurance premiums. The IRS publishes a list of qualifying healthcare expenses under an HSA.
Always keep a record and copy of your healthcare receipts; this will help you keep track of your healthcare expenses, so that you know when you have met your deductible.
Know before you go: Find cost estimates for services and procedures you may need on the FH Medical Cost Lookup. Knowing how much you may be responsible for paying can help you plan your healthcare expenses accordingly.
Talk to your providers. They may be willing to negotiate fees, accept payments in installments, or prescribe less expensive medication or treatment options.
Go for your clinically-recommended screenings and annual checkups, and talk to your provider about ways in which you could improve your overall health through preventive measures. Remember, some HDHPs cover preventive services and programs before the deductible is met, so ask your plan representative about which of these may be covered.


And most importantly – remember that you are your own best advocate. Speaking up and asking questions up front will help you get the care you need and avoid confusion about your out-of-pocket healthcare costs.

Health system


A health system, also sometimes referred to as health care system or healthcare system, is the organization of people, institutions, and resources that deliver health care services to meet the health needs of target populations.

There is a wide variety of health systems around the world, with as many histories and organizational structures as there are nations. Implicitly, nations must design and develop health systems in accordance with their needs and resources, although common elements in virtually all health systems are primary health care and public health measures. In some countries, health system planning is distributed among market participants. In others, there is a concerted effort among governments, trade unions, charities, religious organizations, or other co-ordinated bodies to deliver planned health care services targeted to the populations they serve. However, health care planning has been described as often evolutionary rather than revolutionary.

Goals


The World Health Organization (WHO), the directing and coordinating authority for health within the United Nations system, is promoting a goal of universal health care: to ensure that all people obtain the health services they need without suffering financial hardship when paying for them. According to WHO, health care systems' goals are good health for the citizens, responsiveness to the expectations of the population, and fair means of funding operations. Progress towards them depends on how systems carry out four vital functions: provision of health care services, resource generation, financing, and stewardship. Other dimensions for the evaluation of health systems include quality, efficiency, acceptability, and equity. They have also been described in the United States as "the five C's": Cost, Coverage, Consistency, Complexity, and Chronic Illness. Also, continuity of health care is a major goal.

Definitions


Often health system has been defined with a reductionist perspective, for example reducing it to health care system. In many publications, for example, both expressions are used interchangeably. Some authors have developed arguments to expand the concept of health systems, indicating additional dimensions that should be considered:

Health systems should not be expressed in terms of their components only, but also of their interrelationships;
Health systems should include not only the institutional or supply side of the health system, but also the population;
Health systems must be seen in terms of their goals, which include not only health improvement, but also equity, responsiveness to legitimate expectations, respect of dignity, and fair financing, among others;
Health systems must also be defined in terms of their functions, including the direct provision of services, whether they are medical or public health services, but also "other enabling functions, such as stewardship, financing, and resource generation, including what is probably the most complex of all challenges, the health workforce."


World Health Organization definition


The World Health Organization defines health systems as follows:

A health system consists of all organizations, people and actions whose primary intent is to promote, restore or maintain health. This includes efforts to influence determinants of health as well as more direct health-improving activities. A health system is therefore more than the pyramid of publicly owned facilities that deliver personal health services. It includes, for example, a mother caring for a sick child at home; private providers; behaviour change programmes; vector-control campaigns; health insurance organizations; occupational health and safety legislation. It includes inter-sectoral action by health staff, for example, encouraging the ministry of education to promote female education, a well known determinant of better health.

Providers


Health care providers are institutions or individuals providing health care services. Individuals including health professionals and allied health professions can be self-employed or working as an employee in a hospital, clinic, or other health care institution, whether government operated, private for-profit, or private not-for-profit (e.g. non-governmental organization). They may also work outside of direct patient care such as in a government health department or other agency, medical laboratory, or health training institution. Examples of health workers are doctors, nurses, midwives, dietitians, paramedics, dentists, medical laboratory technologists, therapists, psychologists, pharmacists, chiropractors, optometrists, community health workers, traditional medicine practitioners, and others.

Financial resources


There are generally five primary methods of funding health systems:

general taxation to the state, county or municipality
social health insurance
voluntary or private health insurance
out-of-pocket payments
donations to charities
Most countries' systems feature a mix of all five models. One study  based on data from the OECD concluded that all types of health care finance "are compatible with" an efficient health system. The study also found no relationship between financing and cost control.

The term health insurance is generally used to describe a form of insurance that pays for medical expenses. It is sometimes used more broadly to include insurance covering disability or long-term nursing or custodial care needs. It may be provided through a social insurance program, or from private insurance companies. It may be obtained on a group basis (e.g., by a firm to cover its employees) or purchased by individual consumers. In each case premiums or taxes protect the insured from high or unexpected health care expenses.

By estimating the overall cost of health care expenses, a routine finance structure (such as a monthly premium or annual tax) can be developed, ensuring that money is available to pay for the health care benefits specified in the insurance agreement. The benefit is typically administered by a government agency, a non-profit health fund or a corporation operating seeking to make a profit.

Many forms of commercial health insurance control their costs by restricting the benefits that are paid by through deductibles, co-payments, coinsurance, policy exclusions, and total coverage limits and will severely restrict or refuse coverage of pre-existing conditions. Many government schemes also have co-payment schemes but exclusions are rare because of political pressure. The larger insurance schemes may also negotiate fees with providers.

Many forms of social insurance schemes control their costs by using the bargaining power of their community they represent to control costs in the health care delivery system. For example, by negotiating drug prices directly with pharmaceutical companies negotiating standard fees with the medical profession, or reducing unnecessary health care costs. Social schemes sometimes feature contributions related to earnings as part of a scheme to deliver universal health care, which may or may not also involve the use of commercial and non-commercial insurers. Essentially the more wealthy pay proportionately more into the scheme to cover the needs of the relatively poor who therefore contribute proportionately less. There are usually caps on the contributions of the wealthy and minimum payments that must be made by the insured (often in the form of a minimum contribution, similar to a deductible in commercial insurance models).

In addition to these traditional health care financing methods, some lower income countries and development partners are also implementing non-traditional or innovative financing mechanisms for scaling up delivery and sustainability of health care, such as micro-contributions, public-private partnerships, and market-based financial transaction taxes. For example, as of June 2011, UNITAID had collected more than one billion dollars from 29 member countries, including several from Africa, through an air ticket solidarity levy to expand access to care and treatment for HIV/AIDS, tuberculosis and malaria in 94 countries.


Capitation


In capitation payment systems, GPs are paid for each patient on their "list", usually with adjustments for factors such as age and gender. According to OECD, "these systems are used in Italy (with some fees), in all four countries of the United Kingdom (with some fees and allowances for specific services), Austria (with fees for specific services), Denmark (one third of income with remainder fee for service), Ireland (since 1989), the Netherlands (fee-for-service for privately insured patients and public employees) and Sweden (from 1994). Capitation payments have become more frequent in "managed care" environments in the United States."

According to OECD, "Capitation systems allow funders to control the overall level of primary health expenditures, and the allocation of funding among GPs is determined by patient registrations. However, under this approach, GPs may register too many patients and under-serve them, select the better risks and refer on patients who could have been treated by the GP directly. Freedom of consumer choice over doctors, coupled with the principle of "money following the patient" may moderate some of these risks. Aside from selection, these problems are likely to be less marked than under salary-type arrangements."

Salary arrangements


In several OECD countries, general practitioners (GPs) are employed on salaries for the government.[16] According to OECD, "Salary arrangements allow funders to control primary care costs directly; however, they may lead to under-provision of services (to ease workloads), excessive referrals to secondary providers and lack of attention to the preferences of patients." There has been movement away from this system.

Information resources


Sound information plays an increasingly critical role in the delivery of modern health care and efficiency of health systems. Health informatics – the intersection of information science, medicine and health care – deals with the resources, devices, and methods required to optimize the acquisition and use of information in health and biomedicine. Necessary tools for proper health information coding and management include clinical guidelines, formal medical terminologies, and computers and other information and communication technologies. The kinds of data processed may include patients' medical records, hospital administration and clinical functions, and human resources information.

The use of health information lies at the root of evidence-based policy and evidence-based management in health care. Increasingly, information and communication technologies are being utilised to improve health systems in developing countries through: the standardisation of health information; computer-aided diagnosis and treatment monitoring; informing population groups on health and treatment.

Management

The management of any health system is typically directed through a set of policies and plans adopted by government, private sector business and other groups in areas such as personal health care delivery and financing, pharmaceuticals, health human resources, and public health.

Public health is concerned with threats to the overall health of a community based on population health analysis. The population in question can be as small as a handful of people, or as large as all the inhabitants of several continents (for instance, in the case of a pandemic). Public health is typically divided into epidemiology, biostatistics and health services. Environmental, social, behavioral, and occupational health are also important subfields.


A child being immunized against polio.

Today, most governments recognize the importance of public health programs in reducing the incidence of disease, disability, the effects of ageing and health inequities, although public health generally receives significantly less government funding compared with medicine. For example, most countries have a vaccination policy, supporting public health programs in providing vaccinations to promote health. Vaccinations are voluntary in some countries and mandatory in some countries. Some governments pay all or part of the costs for vaccines in a national vaccination schedule.

The rapid emergence of many chronic diseases, which require costly long-term care and treatment, is making many health managers and policy makers re-examine their health care delivery practices. An important health issue facing the world currently is HIV/AIDS. Another major public health concern is diabetes. In 2006, according to the World Health Organization, at least 171 million people worldwide suffered from diabetes. Its incidence is increasing rapidly, and it is estimated that by the year 2030, this number will double. A controversial aspect of public health is the control of tobacco smoking, linked to cancer and other chronic illnesses.

Antibiotic resistance is another major concern, leading to the reemergence of diseases such as tuberculosis. The World Health Organization, for its World Health Day 2011 campaign, is calling for intensified global commitment to safeguard antibiotics and other antimicrobial medicines for future generations.


Health systems performance


Since 2000, more and more initiatives have been taken at the international and national levels in order to strengthen national health systems as the core components of the global health system. Having this scope in mind, it is essential to have a clear, and unrestricted, vision of national health systems that might generate further progresses in global health. The elaboration and the selection of performance indicators are indeed both highly dependent on the conceptual framework adopted for the evaluation of the health systems performances. Like most social systems, health systems are complex adaptive systems where change does not necessarily follow rigid epidemiological models. In complex systems path dependency, emergent properties and other non-linear patterns are under-explored and unmeasured, which can lead to the development of inappropriate guidelines for developing responsive health systems

An increasing number of tools and guidelines are being published by international agencies and development partners to assist health system decision-makers to monitor and assess health systems strengthening[26] including human resources development using standard definitions, indicators and measures. In response to a series of papers published in 2012 by members of the World Health Organization's Task Force on Developing Health Systems Guidance, researchers from the Future Health Systems consortium argue that there is insufficient focus on the 'policy implementation gap'. Recognizing the diversity of stakeholders and complexity of health systems is crucial to ensure that evidence-based guidelines are tested with requisite humility and without a rigid adherence to models dominated by a limited number of disciplines.

Health Policy and Systems Research (HPSR) is an emerging multidisciplinary field that challenges 'disciplinary capture' by dominant health research traditions, arguing that these traditions generate premature and inappropriately narrow definitions that impede rather than enhance health systems strengthening. HPSR focuses on low- and middle-income countries and draws on the relativist social science paradigm which recognises that all phenomena are constructed through human behaviour and interpretation. In using this approach, HPSR offers insight into health systems by generating a complex understanding of context in order to enhance health policy learning. HPSR calls for greater involvement of local actors, including policy makers, civil society and researchers, in decisions that are made around funding health policy research and health systems strengthening.

Health insurance


Health insurance is insurance against the risk of incurring medical expenses among individuals. By estimating the overall risk of health care and health system expenses, among a targeted group, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to ensure that money is available to pay for the health care benefits specified in the insurance agreement. The benefit is administered by a central organization such as a government agency, private business, or not-for-profit entity. According to the Health Insurance Association of America, health insurance is defined as "coverage that provides for the payments of benefits as a result of sickness or injury. Includes insurance for losses from accident, medical expense, disability, or accidental death and dismemberment" .




A health insurance policy is:

A contract between an insurance provider (e.g. an insurance company or a government) and an individual or his/her sponsor (e.g. an employer or a community organization). The contract can be renewable (e.g. annually, monthly) or lifelong in the case of private insurance, or be mandatory for all citizens in the case of national plans. The type and amount of health care costs that will be covered by the health insurance provider are specified in writing, in a member contract or "Evidence of Coverage" booklet for private insurance, or in a national health policy for public insurance.
Provided by an employer-sponsored self-funded ERISA plan. The company generally advertises that they have one of the big insurance companies. However, in an ERISA case, that insurance company "doesn't engage in the act of insurance", they just administer it. Therefore, ERISA plans are not subject to state laws. ERISA plans are governed by federal law under the jurisdiction of the US Department of Labor (USDOL). The specific benefits or coverage details are found in the Summary Plan Description (SPD). An appeal must go through the insurance company, then to the Employer's Plan Fiduciary. If still required, the Fiduciary's decision can be brought to the USDOL to review for ERISA compliance, and then file a lawsuit in federal court.
The individual insured person's obligations may take several forms:

Premium: The amount the policy-holder or their sponsor (e.g. an employer) pays to the health plan to purchase health coverage.
Deductible: The amount that the insured must pay out-of-pocket before the health insurer pays its share. For example, policy-holders might have to pay a $500 deductible per year, before any of their health care is covered by the health insurer. It may take several doctor's visits or prescription refills before the insured person reaches the deductible and the insurance company starts to pay for care. Furthermore, most policies do not apply co-pays for doctor's visits or prescriptions against your deductible.
Co-payment: The amount that the insured person must pay out of pocket before the health insurer pays for a particular visit or service. For example, an insured person might pay a $45 co-payment for a doctor's visit, or to obtain a prescription. A co-payment must be paid each time a particular service is obtained.
Coinsurance: Instead of, or in addition to, paying a fixed amount up front (a co-payment), the co-insurance is a percentage of the total cost that insured person may also pay. For example, the member might have to pay 20% of the cost of a surgery over and above a co-payment, while the insurance company pays the other 80%. If there is an upper limit on coinsurance, the policy-holder could end up owing very little, or a great deal, depending on the actual costs of the services they obtain.
Exclusions: Not all services are covered. The insured are generally expected to pay the full cost of non-covered services out of their own pockets.
Coverage limits: Some health insurance policies only pay for health care up to a certain dollar amount. The insured person may be expected to pay any charges in excess of the health plan's maximum payment for a specific service. In addition, some insurance company schemes have annual or lifetime coverage maxima. In these cases, the health plan will stop payment when they reach the benefit maximum, and the policy-holder must pay all remaining costs.
Out-of-pocket maxima: Similar to coverage limits, except that in this case, the insured person's payment obligation ends when they reach the out-of-pocket maximum, and health insurance pays all further covered costs. Out-of-pocket maxima can be limited to a specific benefit category (such as prescription drugs) or can apply to all coverage provided during a specific benefit year.
Capitation: An amount paid by an insurer to a health care provider, for which the provider agrees to treat all members of the insurer.
In-Network Provider: (U.S. term) A health care provider on a list of providers preselected by the insurer. The insurer will offer discounted coinsurance or co-payments, or additional benefits, to a plan member to see an in-network provider. Generally, providers in network are providers who have a contract with the insurer to accept rates further discounted from the "usual and customary" charges the insurer pays to out-of-network providers.
Prior Authorization: A certification or authorization that an insurer provides prior to medical service occurring. Obtaining an authorization means that the insurer is obligated to pay for the service, assuming it matches what was authorized. Many smaller, routine services do not require authorization.
Explanation of Benefits: A document that may be sent by an insurer to a patient explaining what was covered for a medical service, and how payment amount and patient responsibility amount were determined.
Prescription drug plans are a form of insurance offered through some health insurance plans. In the U.S., the patient usually pays a copayment and the prescription drug insurance part or all of the balance for drugs covered in the formulary of the plan. Such plans are routinely part of national health insurance programs. For example, in the province of Quebec, Canada, prescription drug insurance is universally required as part of the public health insurance plan, but may be purchased and administered either through private or group plans, or through the public plan.

Some, if not most, health care providers in the United States will agree to bill the insurance company if patients are willing to sign an agreement that they will be responsible for the amount that the insurance company doesn't pay. The insurance company pays out of network providers according to "reasonable and customary" charges, which may be less than the provider's usual fee. The provider may also have a separate contract with the insurer to accept what amounts to a discounted rate or capitation to the provider's standard charges. It generally costs the patient less to use an in-network provider.

Private healthcare


Private healthcare or private medicine is healthcare and medicine provided by entities other than the government. The term is generally used more in Europe and other countries which have publicly funded health care, to differentiate the arrangement from systems where private healthcare is the norm.

Ethical issues relating to private healthcare primarily concerns the argument that the seriously ill be entitled to spend money on saving their lives. On the other hand, private healthcare can sometimes be more efficient than public sector provision. Private operators may be more innovative in areas such as telemedicine. Due to the profit motive, they can be more productive. Public healthcare tends to be limited by the amount of tax that individuals are willing to pay.

Some would argue that private healthcare needs to be more carefully regulated to ensure that it achieves standards set by the state, predominantly regarding safety, value, and efficiency.

Charging patients or private insurers for work

Europeans in all countries are willing to pay a charge for some private healthcare, whether to avoid long queues, to access cosmetic surgery, or to avoid the perceived risk of infection in public-sector hospitals. This is not a small market. In Finland it is estimated that it is worth some €700m a year. In Greece, half the income of private hospitals is from one-off payments from patients. Maternity is a particularly large private market, as it is the demand for fertility both at home and abroad, where more than 18% of medical internet based searches are related to infertility conditions and treatment.[1] Healthcare tourism is also thriving within the EU, in which patients (mainly from the UK) travel to Eastern Europe for low-cost dental work. The particularly wealthy Russians and Saudi Arabians tend to go to private hospitals in Switzerland or Germany.

As most Europeans have access to public sector provision either through their mandatory social insurance fund or through taxes, private healthcare insurance remains a relatively small market, with levels typically in the range of 2%-8% of the population. Many consumers prefer to pay single fees as and when necessary. In addition, any occupational healthcare paid for by employers renders private healthcare insurance unnecessary. Nonetheless, around 10% of Germans have some form of private healthcare insurance which enables them to experience a slightly higher level of comfort during hospital stays. The most notable development in this area has been the Netherlands, which in 2005 moved to a system whereby all citizens are forced to take out private healthcare insurance rather than social insurance. This is being closely monitored by many European countries.


Occupational healthcare

In many European countries with a state-run national health service, employers are obliged to pay for some level of healthcare for their employees. This is the case in Romania, Poland and Finland, for instance, and one can find networks of small clinics in large cities in these countries. In other countries, such as the UK and Sweden, many employers are willing to pay for occupational healthcare for their workforce so that key workers can avoid delays in seeing a doctor when they are unwell. Naturally though, the occupational health department of a publicly funded hospital will provide a similar standard of healthcare to that provided for patients.

Health insurance in the United States



In the United States, health insurance is any program that helps pay for medical expenses, whether through privately purchased insurance,

social insurance or a social welfare program funded by the government. Synonyms for this usage include "health coverage," "health care

coverage" and "health benefits."

In a more technical sense, the term is used to describe any form of insurance that provides protection against the costs of medical services.

This usage includes private insurance and social insurance programs such as Medicare, which pools resources and spreads the financial

risk associated with major medical expenses across the entire population to protect everyone, as well as social welfare programs such as

Medicaid and the State Children's Health Insurance Program, which provide assistance to people who cannot afford health coverage.

In addition to medical expense insurance, "health insurance" may also refer to insurance covering disability or long-term nursing or custodial

care needs. Different health insurance provides different levels of financial protection and the scope of coverage can vary widely, with more

than 40 percent of insured individuals reporting that their plans do not adequately meet their needs as of 2007.

The share of Americans with health insurance has been steadily declining since at least 2000. As of 2010 just under 84% of Americans had

some form of health insurance, which meant that more than 49 million people went without coverage for at least part of the year. Declining

rates of coverage and underinsurance are largely attributable to rising insurance costs and high unemployment. As the pool of people with

private health insurance has shrunk, Americans are increasingly reliant on public insurance. Public programs now cover 31% of the population

and are responsible for 44% of health care spending. Public insurance programs tend to cover more vulnerable people with greater health

care needs. Many of the reforms instituted by the Affordable Care Act of 2010 were designed to extend health care coverage to those without it.

Enrollment and the Uninsured

According to the United States Census Bureau, roughly 55% obtain insurance through an employer, while about 10% purchase it directly.

About 31% of Americans were enrolled in a public health insurance program: 14.5% (45 million – although that number has since risen to 48

million) had Medicare, 15.9% (49 million) had Medicaid, and 4.2% (13 million) had military health insurance (there is some overlap, causing

percentages to add up to more than 100%). Employers may also provide reimbursement for health insurance purchased individually by their

employees through a Defined contribution health benefits plan. Employers are allowed to pay employees cash in lieu of health insurance, but

this is uncommon as it is subject to strict IRS regulations.

Trends in private coverage

The percentage of non-elderly workers with employer-sponsored coverage has been falling, from 68% in 2000 to 61% in 2009, the latest year

for which data is available. While the primary cause of falling rates of insurance is the rising cost of health care for employers, the

economic downturn since 2008 has swelled the ranks of the uninsured, in large part because workers who lose their jobs also lose employer-

sponsored insurance. Over 1 million workers lost their health care coverage in January, February and March 2009. Approximately, 268,400

more workers lost health care coverage in March 2009 than in March 2008,[8] so the decline of employer sponsored insurance has likely

accelerated in recent years.

Industry experts expect that in the coming decade there will be a shift to defined contribution health benefits plans, similar to the recent shift in

retirement plans from defined benefit to defined contribution.

Trends in public coverage

As a smaller and smaller share of the public is covered by private insurance, public insurance has grown more essential. In 2000, 10.5% of the

public was covered by Medicaid, while 13.5% had Medicare. By 2010, those figures had risen to 14.5% and 15.9% respectively.

A report published by the Kaiser Family Foundation in April 2008 found that economic downturns dramatically increase the public's reliance on

state Medicaid and SCHIP and can cause significant financial strain for the programs. The authors estimated that a 1% increase in the

unemployment rate would increase Medicaid and SCHIP enrollment by 1 million, and increase the number uninsured by 1.1 million. State

spending on Medicaid and SCHIP would increase by $1.4 billion (total spending on these programs would increase by $3.4 billion). This

increased spending would occur at the same time state government revenues were declining. During the last downturn, the Jobs and Growth

Tax Relief Reconciliation Act of 2003 (JGTRRA) included federal assistance to states, which helped states avoid tightening their Medicaid and

SCHIP eligibility rules. The authors conclude that Congress should consider similar relief for the current economic downturn. Funding for

Medicaid and SCHIP was in fact expanded significantly under the 2010 health reform bill.

Status of the uninsured

Based on self-reported census data, in 2010, more than 49 million people in the US (more than 16% of the population) were without health

insurance as defined in the questions asked. The percentage of the non-elderly population who are uninsured has been generally increasing

since the year 2000. Among the uninsured population, some 40 million were employment-age adults (ages 18 to 64), and more than 28

million worked at least part-time. About 37% of the uninsured live in households with incomes over $50,000.

According to the Census Bureau, more than 40 million of the uninsured are US citizens. Another 9.7 million are non-citizens, but the Census

Bureau does not distinguish in its estimate between documented and undocumented migrants. It has been estimated that nearly one fifth of

the uninsured population is able to afford insurance, almost one quarter is eligible for public coverage, and the remaining 56% need financial

assistance (8.9% of all Americans). An estimated 5 million of those without health insurance are considered "uninsurable" because of pre-

existing conditions.

A 2011 study found that there were 2.1 million hospital stays for uninsured patients, accounting for 4.4 percent ($17.1 billion) of total aggregate

inpatient hospital costs in the United States. The costs of treating the uninsured must often be absorbed by providers as charity care,

passed on to the insured via cost-shifting and higher health insurance premiums, or paid by taxpayers through higher taxes.

Death


Since people who lack health insurance are unable to obtain timely medical care, they have a 40 percent higher risk of death in any given year

than those with health insurance, according to a study published in the American Journal of Public Health. The study estimated that in 2005 in

the United States, there were 45,000 deaths associated with lack of health insurance.

A Johns Hopkins Hospital study found that heart transplant complications occurred most often amongst the uninsured, and that patients who

had private health plans fared better than those covered by Medicaid or Medicare. Gallup issued a report in July 2014 stating that the

uninsured rate for adults 18 and over declined from 18% in 2013 to 13.4% by in 2014, largely due to new coverage options and market reforms

under the Affordable Care Act.[19] Rand Corporation had similar findings

Reform


The Affordable Care Act of 2010 was designed primarily to extend health coverage to those without it by expanding Medicaid, creating financial

incentives for employers to offer coverage, and requiring those without employer or public coverage to purchase insurance in newly created

state-run health insurance exchanges. The CBO has estimated that roughly 33 million who would have otherwise been uninsured will receive

coverage because of the act by 2022.

History

Accident insurance was first offered in the United States by the Franklin Health Assurance Company of Massachusetts. This firm, founded in

1850, offered insurance against injuries arising from railroad and steamboat accidents. Sixty organizations were offering accident insurance in

the US by 1866, but the industry consolidated rapidly soon thereafter. While there were earlier experiments, the origins of sickness coverage in

the US effectively date from 1890. The first employer-sponsored group disability policy was issued in 1911, but this plan's primary purpose was

replacing wages lost due to an inability to work, not medical expenses.

Before the development of medical expense insurance, patients were expected to pay all other health care costs out of their own pockets,

under what is known as the fee-for-service business model. During the middle to late 20th century, traditional disability insurance evolved into

modern health insurance programs. Today, most comprehensive private health insurance programs cover the cost of routine, preventive, and

emergency health care procedures, and also most prescription drugs, but this was not always the case. The rise of private insurance was

accompanied by the gradual expansion of public insurance programs for those who could not acquire coverage through the market.

Hospital and medical expense policies were introduced during the first half of the 20th century. During the 1920s, individual hospitals began

offering services to individuals on a pre-paid basis, eventually leading to the development of Blue Cross organizations in the 1930s. The first

employer-sponsored hospitalization plan was created by teachers in Dallas, Texas in 1929. Because the plan only covered members'

expenses at a single hospital, it is also the forerunner of today's health maintenance organizations (HMOs).

In the 1930s, The Roosevelt Administration explored possibilities for creating a national health insurance program, while it was designing the

Social Security system. But it abandoned the project because the American Medical Association (AMA) fiercely opposed it, along with all forms

of health insurance at that time.

The rise of employer-sponsored coverage


Employer-sponsored health insurance plans dramatically expanded as a direct result of wage controls imposed by the federal government

during World War II. The labor market was tight because of the increased demand for goods and decreased supply of workers during the

war. Federally imposed wage and price controls prohibited manufacturers and other employers from raising wages enough to attract workers.

When the War Labor Board declared that fringe benefits, such as sick leave and health insurance, did not count as wages for the purpose of

wage controls, employers responded with significantly increased offers of fringe benefits, especially health care coverage, to attract workers.



President Harry S. Truman proposed a system of public health insurance in his November 19, 1945, address. He envisioned a national system

that would be open to all Americans, but would remain optional. Participants would pay monthly fees into the plan, which would cover the cost

of any and all medical expenses that arose in a time of need. The government would pay for the cost of services rendered by any doctor who

chose to join the program. In addition, the insurance plan would give a cash balance to the policy holder to replace wages lost due to illness or

injury. The proposal was quite popular with the public, but it was fiercely opposed by the Chamber of Commerce, the American Hospital

Association, and the AMA, which denounced it as "socialism."

Foreseeing a long and costly political battle, many labor unions chose to campaign for employer-sponsored coverage, which they saw as a

less desirable but more achievable goal, and as coverage expanded the national insurance system lost political momentum and ultimately

failed to pass. Using health care and other fringe benefits to attract the best employees, private sector, white-collar employers nationwide

expanded the U.S. health care system. Public sector employers followed suit in an effort to compete. Between 1940 and 1960, the total number

of people enrolled in health insurance plans grew seven-fold, from 20,662,000 to 142,334,000, and by 1958, 75% of Americans had some

form of health coverage.

Medicare and Medicaid


Still, private insurance remained unaffordable or simply unavailable to many, including the poor, the unemployed, and the elderly. Before 1965,

only half of seniors had health care coverage, and they paid three times as much as younger adults, despite having lower incomes.

Consequently, interest persisted in creating public health insurance for those left out of the private marketplace.

The 1960 Kerr-Mills Act provided matching funds to states assisting patients with their medical bills. In the early 1960s, Congress rejected a

plan to subsidize private coverage for people with Social Security as unworkable, and an amendment to the Social Security Act creating a

publicly run alternative was proposed. Finally, President Lyndon B. Johnson signed the Medicare and Medicaid programs into law in 1965,

creating publicly run insurance for the elderly and the poor. Medicare was later expanded to cover people with disabilities, end-stage renal

disease, and ALS.

Towards universal coverage

Persistent lack of insurance among many working Americans continued to create pressure for a comprehensive national health insurance

system. In the early 1970s, there was fierce debate between two alternative models for universal coverage. Senator Ted Kennedy proposed a

universal single-payer system, while President Nixon countered with his own proposal based on mandates and incentives for employers to

provide coverage while expanding publicly run coverage for low-wage workers and the unemployed. Compromise was never reached, and

Nixon's resignation and a series of economic problems later in the decade diverted Congress's attention away from health reform.

Shortly after his inauguration, President Clinton offered a new proposal for a universal health insurance system. Like Nixon's plan, Clinton's

relied on mandates, both for individuals and for insurers, along with subsidies for people who could not afford insurance. The bill would have

also created "health-purchasing alliances" to pool risk among multiple businesses and large groups of individuals. The plan was staunchly

opposed by the insurance industry and employers' groups and received only mild support from liberal groups, particularly unions, which

preferred a single payer system. Ultimately it failed after the Republican takeover of Congress in 1994.

Finally achieving universal health coverage remained a top priority among Democrats, and passing a health reform bill was one of the Obama

Administration's top priorities. The Patient Protection and Affordable Care Act was similar to the Nixon and Clinton plans, mandating coverage,

penalizing employers who failed to provide it, and creating mechanisms for people to pool risk and buy insurance collectively. Earlier

versions of the bill included a publicly run insurer that could compete to cover those without employer sponsored coverage (the so-called

public option), but this was ultimately stripped to secure the support of moderates. The bill passed the Senate in December 2009 with all

Democrats voting in favor and the House in March 2010 with the support of most Democrats. Not a single Republican voted in favor of it either

time.

Public health care coverage


Public programs provide the primary source of coverage for most seniors and also low-income children and families who meet certain

eligibility requirements. The primary public programs are Medicare, a federal social insurance program for seniors (generally persons aged 65

and over) and certain disabled individuals; Medicaid, funded jointly by the federal government and states but administered at the state level,

which covers certain very low income children and their families; and SCHIP, also a federal-state partnership that serves certain children and

families who do not qualify for Medicaid but who cannot afford private coverage. Other public programs include military health benefits

provided through TRICARE and the Veterans Health Administration and benefits provided through the Indian Health Service. Some states have

additional programs for low-income individuals. In 2011, approximately 60 percent of stays were billed to Medicare and Medicaid—up from

52 percent in 1997.

Medicare

In the United States, Medicare is a federal social insurance program that provides health insurance to people over the age of 65, individuals

who become totally and permanently disabled, end stage renal disease (ESRD) patients, and people with ALS. Recent research has found that

the health trends of previously uninsured adults, especially those with chronic health problems, improves once they enter the Medicare

program. Traditional Medicare requires considerable cost-sharing, but ninety percent of Medicare enrollees have some kind of

supplemental insurance - either employer-sponsored or retiree coverage, Medicaid, or a private Medigap plan – that covers some or all of their

cost-sharing. With supplemental insurance, Medicare ensures that its enrollees have predictable, affordable health care costs regardless

of unforeseen illness or injury.

As the population covered by Medicare grows, its costs are projected to rise from slightly over 3 percent of GDP to over 6 percent, contributing

substantially to the federal budget deficit. In 2011, Medicare was the primary payer for an estimated 15.3 million inpatient stays,

representing 47.2 percent ($182.7 billion) of total aggregate inpatient hospital costs in the United States. The Affordable Care Act took

some steps to reduce Medicare spending, and various other proposals are circulating to reduce it further.

Medicare Advantage


Medicare Advantage plans expand the health insurance options for people with Medicare. Medicare Advantage was created under the

Balanced Budget Act of 1997, with the intent to better control the rapid growth in Medicare spending, as well as to provide Medicare

beneficiaries more choices. But on average, Medicare Advantage plans cost 12% more than traditional Medicare. The ACA took steps to

align payments to Medicare Advantage plans with the cost of traditional Medicare.

There is some evidence that Medicare Advantage plans select patients with low risk of incurring major medical expenses to maximize profits

at the expense of traditional Medicare.

Medicaid


Medicaid was instituted for the very poor in 1965. Since enrollees must pass a means test, Medicaid is a social welfare or social protection

program rather than a social insurance program. Despite its establishment, the percentage of US residents who lack any form of health

insurance has increased since 1994. It has been reported that the number of physicians accepting Medicaid has decreased in recent

years due to lower reimbursement rates.

The Affordable Care Act dramatically expanded Medicaid. The program will now cover everyone with incomes under 133% of the federal

poverty level who does not qualify for Medicare, provided this expansion of coverage has been accepted by the state where the person resides.

Meanwhile, Medicaid benefits must be the same as the essential benefit in the newly created state exchanges. The federal government will

fully fund the expansion of Medicaid initially, with some of the financial responsibility gradually devolving back to the states by 2020.

In 2011, there were 7.6 million hospital stays billed to Medicaid, representing 15.6% (approximately $60.2 billion) of total aggregate inpatient

hospital costs in the United States.

State Children's Health Insurance Program (SCHIP)

The State Children's Health Insurance Program (SCHIP) is a joint state/federal program to provide health insurance to children in families who

earn too much money to qualify for Medicaid, yet cannot afford to buy private insurance. The statutory authority for SCHIP is under title XXI of

the Social Security Act. SCHIP programs are run by the individual states according to requirements set by the federal Centers for Medicare and

Medicaid Services, and may be structured as independent programs separate from Medicaid (separate child health programs), as expansions

of their Medicaid programs (SCHIP Medicaid expansion programs), or combine these approaches (SCHIP combination programs). States

receive enhanced federal funds for their SCHIP programs at a rate above the regular Medicaid match.

Military health benefits


Health benefits are provided to active duty service members, retired service members and their dependents by the Department of Defense

Military Health System (MHS). The MHS consists of a direct care network of Military Treatment Facilities and a purchased care network known

as TRICARE. Additionally, veterans may also be eligible for benefits through the Veterans Health Administration.

Pre-existing Condition Insurance Plan

The Pre-existing Condition Insurance Plan, or PCIP, is a transitional program created in the Patient Protection and Affordable Care Act

(PPACA). Those eligible for PCIP are citizens of the United States or those legally residing in the U.S., who have been uninsured for the last 6

months and "have a pre-existing condition or have been denied health coverage because of their health condition." However, if one has health

insurance or is enrolled in a state high risk pool, they are not eligible for PCIP, even if that coverage does not cover their medical condition.

PCIP is run by the individual states or through the U.S. Department of Health and Human Services, which has a contract with the Government

Employees Health Association, or GEHA, to administer benefits. Both will be funded by the federal government and provide three plan options.

These options are the standard, extended, and the Health Savings Account option. PCIP only covers the individual enrollee and does not

include family members or dependents. In 2014, the Affordable Care Act provision banning discrimination based on pre-existing conditions will

be implemented and PCIP enrollees will be transitioned into new state-based health care exchanges.


Private health care coverage


Private health insurance may be purchased on a group basis (e.g., by a firm to cover its employees) or purchased by individual consumers.

Most Americans with private health insurance receive it through an employer-sponsored program. According to the United States Census

Bureau, some 60% of Americans are covered through an employer, while about 9% purchase health insurance directly. Private insurance

was billed for 12.2 million inpatient hospital stays in 2011, incurring approximately 29% ($112.5 billion) of the total aggregate inpatient hospital

costs in the United States.

The US has a joint federal and state system for regulating insurance, with the federal government ceding primary responsibility to the states

under the McCarran-Ferguson Act. States regulate the content of health insurance policies and often require coverage of specific types of

medical services or health care providers. State mandates generally do not apply to the health plans offered by large employers, due to

the preemption clause of the Employee Retirement Income Security Act.

Employer sponsored


Employer-sponsored health insurance is paid for by businesses on behalf of their employees as part of an employee benefit package. Most

private (non-government) health coverage in the US is employment-based. Nearly all large employers in America offer group health insurance

to their employees.[56] The typical large-employer PPO plan is typically more generous than either Medicare or the Federal Employees Health

Benefits Program Standard Option.

The employer typically makes a substantial contribution towards the cost of coverage. Typically, employers pay about 85% of the insurance

premium for their employees, and about 75% of the premium for their employees' dependents. The employee pays the remaining fraction of

the premium, usually with pre-tax/tax-exempt earnings. These percentages have been stable since 1999. Health benefits provided by

employers are also tax-favored: Employee contributions can be made on a pre-tax basis if the employer offers the benefits through a section

125 cafeteria plan.

Although workers are effectively paid less than they would be, because of the cost of insurance premiums to the employer, employer-sponsored

health insurance offers several benefits to workers, including economies of scale, a reduction in adverse selection pressures on the insurance

pool (premiums are lower when all employees participate rather than just the sickest), and reduced income taxes. The disadvantages

include disruptions related to changing jobs, the regressive tax effect (high-income workers benefit far more from the tax exemption for

premiums than low-income workers), and increased spending on healthcare.

Costs for employer-paid health insurance are rising rapidly: since 2001, premiums for family coverage have increased 78%, while wages have

risen 19% and inflation has risen 17%, according to a 2007 study by the Kaiser Family Foundation. Employer costs have risen noticeably

per hour worked, and vary significantly. In particular, average employer costs for health benefits vary by firm size and occupation. The cost per

hour of health benefits is generally higher for workers in higher-wage occupations, but represent a smaller percentage of payroll.[60] The

percentage of total compensation devoted to health benefits has been rising since the 1960s. Average premiums, including both the

employer and employee portions, were $4,704 for single coverage and $12,680 for family coverage in 2008.

However, in a 2007 analysis, the Employee Benefit Research Institute concluded that the availability of employment-based health benefits for

active workers in the US is stable. The "take-up rate," or percentage of eligible workers participating in employer-sponsored plans, has fallen

somewhat, but not sharply. EBRI interviewed employers for the study, and found that others might follow if a major employer discontinued

health benefits. Effective by January 1, 2014, the Patient Protection and Affordable Care Act will impose a $2000 per employee tax penalty on

employers with over 50 employees who do not offer health insurance to their full-time workers. (In 2008, over 95% of employers with at least 50

employees offered health insurance. On the other hand, public policy changes could also result in a reduction in employer support for

employment-based health benefits.

Although much more likely to offer retiree health benefits than small firms, the percentage of large firms offering these benefits fell from 66% in

1988 to 34% in 2002.

Small employer group coverage


According to a 2007 study, about 59% of employers at small firms (3-199 workers) in the US provide employee health insurance. The

percentage of small firms offering coverage has been dropping steadily since 1999. The study notes that cost remains the main reason cited

by small firms who do not offer health benefits.[66] Small firms that are new are less likely to offer coverage than ones that have been in

existence for a number of years. For example, using 2005 data for firms with fewer than 10 employees, 43% of those that had been in existence

at least 20 years offered coverage, but only 24% of those that had been in existence less than 5 years did. The volatility of offer rates from year to

year also appears to be higher for newer small businesses.

The types of coverage available to small employers are similar to those offered by large firms, but small businesses do not have the same

options for financing their benefit plans. In particular, self-funded health care (whereby an employer provides health or disability benefits to

employees with its own funds rather than contracting an insurance company[68]) is not a practical option for most small employers.[69] A

RAND Corporation study published in April 2008 found that the cost of health care coverage places a greater burden on small firms, as a

percentage of payroll, than on larger firms. A study published by the American Enterprise Institute in August 2008 examined the effect of

state benefit mandates on self-employed individuals, and found that "the larger the number of mandates in a state, the lower the probability that

a self-employed person will be a significant employment generator." Beneficiary cost sharing is, on average, higher among small firms than

large firms.

When small group plans are medically underwritten, employees are asked to provide health information about themselves and their covered

family members when they apply for coverage. When determining rates, insurance companies use the medical information on these

applications. Sometimes they will request additional information from an applicant's physician or ask the applicants for clarification.

States regulate small group premium rates, typically by placing limits on the premium variation allowable between groups (rate bands).

Insurers price to recover their costs over their entire book of small group business while abiding by state rating rules. Over time, the effect of

initial underwriting "wears off" as the cost of a group regresses towards the mean. Recent claim experience - whether better or worse than

average - is a strong predictor of future costs in the near term. But the average health status of a particular small employer group tends to

regress over time towards that of an average group. The process used to price small group coverage changes when a state enacts small

group reform laws.

Insurance brokers play a significant role in helping small employers find health insurance, particularly in more competitive markets. Average

small group commissions range from 2 percent to 8 percent of premiums. Brokers provide services beyond insurance sales, such as assisting

with employee enrollment and helping to resolve benefits issues.

College-sponsored health insurance for students


Many colleges, universities, graduate schools, professional schools and trade schools offer a school-sponsored health insurance plan. Many

schools require that you enroll in the school-sponsored plan unless you are able to show that you have comparable coverage from another

source.

Effective group health plan years beginning after September 23, 2010, if an employer-sponsored health plan allows employees' children to

enroll in coverage, then the health plan must allow employees' adult children to enroll as well as long as the adult child is not yet age 26. Some

group health insurance plans may also require that the adult child not be eligible for other group health insurance coverage, but only before

2014.

This extension of coverage will help cover one in three young adults, according to White House documents.

Federal employees health benefit plan (FEHBP)


In addition to such public plans as Medicare and Medicaid, the federal government also sponsors a health benefit plan for federal

employees—the Federal Employees Health Benefits Program (FEHBP). FEHBP provides health benefits to full-time civilian employees.

Active-duty service members, retired service members and their dependents are covered through the Department of Defense Military Health

System (MHS). FEHBP is managed by the federal Office of Personnel Management.

"Portability" of group coverage

Two federal laws address the ability of individuals with employment-based health insurance coverage to maintain coverage.

The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) enables certain individuals with employer-sponsored coverage to

extend their coverage if certain "qualifying events" would otherwise cause them to lose it. Employers may require COBRA-qualified individuals

to pay the full cost of coverage, and coverage cannot be extended indefinitely. COBRA only applies to firms with 20 or more employees,

although some states also have "mini-COBRA" laws that apply to small employers.

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) provides for forms of both "group-to-group" and "group-to-individual"

portability. When an individual moves from one employer's benefit plan to another's, the new plan must count coverage under the old plan

against any waiting period for pre-existing conditions, as long as there is not a break in coverage of more than 63 days between the two plans.

When certain qualified individuals lose group coverage altogether, they must be guaranteed access to some form of individual coverage. To

qualify, they must have at least 18 months of prior continuous coverage. The details of access and the price of coverage are determined on a

state-by-state basis.

Association group health insurance


Regular health insurance is sometimes available to members of associations. Associations such as the American Bar Association offer health

insurance to their members,[not in citation given] using an established insurance company to write the policies for a group plan.

Individually purchased


According to the US Census Bureau, about 9% of Americans are covered under health insurance purchased directly. The range of

products available is similar to those provided through employers. However, average out-of-pocket spending is higher in the individual market,

with higher deductibles, co-payments and other cost-sharing provisions. Major medical is the most commonly purchased form of

individual health insurance. Although a major medical health insurance policy is primarily a catastrophic plan, qualified preventive benefits are

still covered at 100% without any waiting period or copay.

In the individual market, the consumer pays the entire premium without benefit of an employer contribution.[80][82] While self-employed

individuals receive a tax deduction for their health insurance and can buy health insurance with additional tax benefits, most consumers in the

individual market do not receive any tax benefit.[83]

Premiums vary significantly by age. In states that allow individual medical plan underwriting, premiums also vary by health status.[80]

However, with the Patient Protection and Affordable Care Act, effective by 2014, all insurers will be fully prohibited from discriminating against or

charging higher rates for any individuals based on pre-existing medical conditions.

In August 2008, the Hartford Courant reported that competition was increasing in the individual health insurance market, with more insurers

entering the market, an increased variety of products, and a broader spread of prices.

Individual health insurance is primarily regulated at the state level, consistent with the McCarran-Ferguson Act. Model acts and regulations

promulgated by the National Association of Insurance Commissioners (NAIC) provide some degree of uniformity state to state. These models

do not have the force of law and have no effect unless they are adopted by a state. They are, however, used as guides by most states, and some

states adopt them with little or no change.
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