Low Cost Health Insurance - Health Insurance in the United States

Low Cost Health Insurance - Health Insurance in the United States

Health Care in the United States

According to the latest United States Census Bureau figures, approximately 85% of Americans have health insurance. Approximately 60% obtain health insurance through their place of employment or as individuals, and various government agencies provide health insurance to over 29% of Americans. In 2005, there were 41.2 million people in the U.S. (14.2 percent of the population) who were without healthcare insurance for at least part of that year.(ibid) For many people, however, this does not boil down to a simple question of affordability. Part of this population might include young and healthy individuals with low risk of serious illness who don't believe that health insurance would be cost-effective. In fact, approximately one-third of these 41.2 million live in households with an income over $50,000, with half of these having an income of over $75,000. Additionally, one third of these 41.2 million are eligible for public health insurance programs but have not signed up for them. People living in the western and southern United States are more likely to be uninsured.

Medicare

In the United States, government-funded Medicare programs help to insure the elderly and end stage renal disease patients. Some health care economists (Uwe Reinhardt of Princeton and Stuart Butler among others) assert that (the third party payment feature) these programs have had the unintended consequence of distorting the price of medical procedures. As a result, the Health Care Financing Administration has set up a list of procedures and corresponding prices under the Resource-Based Relative Value Scale.

Starting in 2006, Medicare Part D provides a program for the elderly to buy insurance for the purchase of prescription drugs.

Medicare Advantage

Medicare Advantage plans expand the health care options for Medicare beneficiaries. The option for Medicare Advantage plans is a result of 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.

Medicaid

While Medicaid was instituted for the very poor, beginning in 1972, the number of individuals in the United States who lacked any form of health insurance for any period during the year increased each year, every year with the exceptions of the years 1999 and 2000.[citation needed] It has been reported that the number of physicians accepting Medicaid has decreased in recent years due to relatively high administrative costs and low reimbursements.

Commercial Health Insurance

Health insurance paid for by business entities generally on behalf of their employees and other immediate stakeholders. Broadly classified as "Traditional/Indemnity" and "Managed/Preferred Provider."

Individual Health Insuance

Policies of health insurance obtained by individuals not otherwise covered under policies or programs elsewhere classified. Generally major medical, short term medical, and student policies.

The shift to managed care in the U.S.

Through the 1990s, managed care grew from about 25% of U.S. employees to the vast majority.

Rise of managed care in the U.S. Year Conventional plans HMOs PPOs POS plans HDHPs
1998 14% 27% 35% 24% ~
1999 10% 28% 39% 24% ~
2000 8% 29% 42% 21% ~
2001 7% 24% 46% 23% ~
2002 4% 27% 52% 18% ~
2003 5% 24% 54% 17% ~
2004 5% 25% 55% 15% ~
2005 3% 21% 61% 15% ~
2006 5% 20% 60% 13% 4%

According the Centers for Medicare and Medicaid Services, nearly 100% of large firms offer health insurance to their employees.[6] 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.[7]

New Types of Medical plans in the United States

On December 8, 2003, President Bush signed The Medicare Prescription Drug, Improvement and Modernization Act of 2003 into law, creating tax-deductible Health Savings Accounts. This gives consumers a new alternative to pay for health care expenses. The HSA is a private bank account which is un-taxed and only penalized if spent on non-medical items or services. Because it must be part of a high deductible insurance plan, the HSA insurance generally has a reasonably priced monthly premium and allows mostly healthy people to bank money for their own healthcare expenses rather than give it to the insurance company.

Limited Medical Benefit Plans pay for routine care and do not pay for catastrophic care. Most people would be well served by such a plan, but financial security is not guaranteed like a major medical plan. Annual Benefit Limits can be as low as $2000. Life time maximums can be very low as well.

Medicare Part D Prescription Drug Plan (PDP) is a prescription benefit available to Medicare eligible individuals.