Health Insurance
Types of Health Insurance
With the massive amount of media coverage that the healthcare reform movement in receiving in the United States right now, it has never been more important to understand the healthcare industry in American and what makes it tick. With the conflict surrounding a proposed “public option” of health insurance, an understanding of the current types of health insurance offered and their shortcomings can only help consumers when forming their opinions.
There are two major kinds of insurance: public and government-sponsored. We’ll tackle them one at a time.
There are three major types of private insurance: employment-based, own employment-based, and direct-purchase. Basically, these programs provide health insurance through an employer or a union to an individual or his family (in the case of employment-based insurance) or an individual takes out a private plan with an insurance company (through direct-purchase).
However, the time of fee-for-service or traditional indemnity plans is over. Most private insurers have shifted towards Point-of-Service or HMO-style plans that seek to cut costs by limiting the options that individuals have in choosing their own doctors and style of medical treatment while the overall costs skyrocket. According to the National Coalition on Health Care, the average family of four spent $12,700 while an individual faced a premium of $4,700 (which is nearly half the poverty level for a single person in America). Further, while the overall price of healthcare soars, insurance pays less, with the average employee contribution growing 120% and out of pockets climbing 115% since 2000.
In addition to private insurance, there are several government-sponsored forms of health insurance that are already in existence. These are Medicare, Medicaid, SCHIP, Military Healthcare, and Indian Health Service.
Medicare is a federal program that provides health insurance for people 65 and older and those with long-term disabilities. Medicaid, unlike Medicare, is administered at the state level and provides medical assistance and health insurance to the needy. Known under a variety of names, its main goal is to provide support for the destitute, the aged, and those with long-term disabilities. SCHIP (provides state-level assistance to children whose parents do not qualify for Medicaid. Military healthcare includes TRICARE/CHAMPUS for active and retired military personnel and CHAMPVA for the support of veterans and their dependents. Indian Health Service (ISH) provides support for eligible American Indians at ISH facilities.
However, despite the large availability of both public and individual health insurance, over 45.7 million people remained uninsured in 2007 according to the Census Bureau. Further, of the 336.4 million people who have health insurance, approximately 20% have governmental as opposed to private insurance with only 67.5% of the population being insured by the private sector. Individuals consistently rank the high cost of health insurance as a primary cause that they remain uninsured or under-insured. Further, according to the Journal of the American Medical Association, the uninsured are more than twice-as-likely as the insured to not seek medical attention for new conditions and to use the emergency room as a primary care option (because they cannot legally turn anyone away).
Health insurance is reaching a crisis point. The costs of the uninsured migrate through the market, and everyone ends up feeling this burden on national productivity and commerce. Hopefully, contemporary reform efforts will have some effect on this burgeoning and long-standing issue.