For
details about the number of uninsured persons, see Health insurance coverage in
the United States.
MAIN ARTICLES:
HEALTH INSURANCE, INSURANCE IN THE UNITED STATES, AND HEALTH CARE IN THE UNITED
STATES
Health care in
the United States
Government Health
Programs
Federal Employees Health Benefits Program
Indian Health Service
Veterans Health Administration
Military Health System / TRICARE
Medicare
Medicaid / State Health Insurance
Assistance Program (SHIP)
State Children's Health Insurance Program
(CHIP)
Program of All-Inclusive Care for the
Elderly (PACE)
Prescription Assistance (SPAP)
PRIVATE HEALTH
COVERAGE
Health
insurance in the United States
Consumer-driven
health care
Flexible
spending account (FSA)
Health
Reimbursement Account
Health
savings account
High-deductible
health plan (HDHP)
Medical
savings account (MSA)
Private
Fee-For-Service (PFFS)
Managed
care (CCP)
Health
maintenance organization (HMO)
Preferred
provider organization (PPO)
Medical
underwriting
HEALTH CARE
REFORM LAW
Emergency Medical Treatment and Active
Labor Act (1986)
Health Insurance Portability and
Accountability Act (1996)
Medicare Prescription Drug, Improvement,
and Modernization Act (2003)
Patient Safety and Quality Improvement Act
(2005)
Health Information Technology for Economic
and Clinical Health Act (2009)
Patient Protection and Affordable Care Act
(2010)
STATE LEVEL
REFORM
Massachusetts health care reform
Oregon Health Plan
Vermont health care reform
SustiNet (Connecticut)
Dirigo Health (Maine)
MUNICIPAL HEALTH
COVERAGE
Fair Share Health Care Act (Maryland)
Healthy Howard (Howard Co., Maryland)
Healthy San Francisco
The
term health insurance is commonly used in the United States to describe any
program that helps pay for medical expenses, whether through privately
purchased insurance, social insurance or a social welfare program funded by the
government.[1] 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.[2]
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.[3]
ENROLLMENT AND
THE UNINSURED
File:Videotaped-Patient-Stories-Impact-on-Medical-Students-Attitudes-Regarding-Healthcare-for-the-pone.0051827.s007.ogv
Uninsured
patients share their experience with the health care system in the United
States.
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%).[3] Employers are
allowed to pay employees cash in lieu of health insurance, but this is uncommon
as it is subject to strict IRS regulations.[4]
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.[5] While the primary cause of falling rates of insurance is the
rising cost of health care for employers,[6] 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.[7] 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.
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.[3]
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.[9] Funding for Medicaid and SCHIP was in fact
expanded significantly under the 2010 health reform bill.[10]
STATUS OF THE
UNINSURED
The
numbers of uninsured Americans and the uninsured rate from 1987 to 2008.
Percentage
of people without health insurance coverage by state in 2009 (darker means
higher percentage).
MAIN ARTICLE:
UNINSURED IN THE UNITED STATES
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.[6] 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.[3]
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.[3] 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).[11] An
estimated 5 million of those without health insurance are considered
"uninsurable" because of pre-existing conditions.[12]
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.[13] 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.[14]
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.[15]
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.[16]
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.[17]
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.[18]
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.[18] The first employer-sponsored
hospitalization plan was created by teachers in Dallas, Texas in 1929.[19]
Because the plan only covered members' expenses at a single hospital, it is also
the forerunner of today's health maintenance organizations (HMOs).[19][20][21]
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.[22]
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.[19] 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.[19]
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.”[23]
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. 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,[24] and by 1958, 75% of Americans had some form of
health coverage.[25]
Medicare
and Medicaid
Elderly
poverty has declined substantially as Medicare spending has risen.
The
blue line indicates per capita Social Security expenditure (in 2010 dollars),
while the red line indicates the percentage of the population aged 65 or older
with an income at or below the poverty line.
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.[26] 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.[27] Medicare was later expanded to cover people with disabilities,
end-stage renal disease, and ALS. The program has helped dramatically reduce
poverty among seniors since its inception more than 45 years ago,[28] while
containing costs more effectively than the private sector.[29]
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.[30]
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.[10] 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.[31] In 2011, approximately 60 percent of
stays were billed to Medicare and Medicaid—up from 52 percent in 1997.[32]