If you take references from the National Health Expenditures Summary Health Expenditure and Financing, you will see that the share of GDP is affected due to the high cost of health care services. In addition to that you can also take help from different other sources to understand the healthcare scenario of the United States. These sources could be:
- Centers for Medicare and Medicaid Services reports
- Healthcare expenditure and financing collection report of the Joint OECD
- EUROSTAT for proper comparison and
- WHO Health Accounts SHA Questionnaires, JHAQ.
These sources will give you a clear picture of health care funding in the United States. Ideally, you will come to know that the health care providers that include the doctors and hospitals are normally paid by the following sources:
- Government insurance programs
- Private insurance and by the
- People themselves from their personal savings and out of pocket funds.
In addition, you will also come to know the money lending sector that helps the people to meet their medical bills. Apart from that, you will also come to know about the different ways in which the government provides some health care directly through different government hospitals and clinics that are staffed by government employees, for example, the Veterans Health Administration.
The private insurance
Private insurance comes first in the list as this is the most common source for health care funding and payments. These insurances can be bought from a for-profit and not-for-profit insurance company. There are different such health insurance companies in the United States but when it comes to a specific state, the number of these companies seems to be very limited.
- In most of the cases, private insurance is acquired by the corporations to provide their employees with a benefit.
- The costs of such insurance are typically shared by both the employers as well as the employees.
- In such insurances the amount of money spent by the employers is typically not considered as a taxable income for the employee.
That means, in effect the government usually subsidizes this insurance to some extent. However, individuals can also purchase private health insurance on their own.
Reforms in private health care
According to the Patient Protection and Affordable Care Act, PPACA and the Affordable Care Act, ACA that can into effect in 2014, there have been many reforms intended in the US health care. These reforms are made with intent to provide the desired funding to the health care practices and lend money to the people who need to avail such health care services. It is in fact intended to increase the affordability and availability of use of health insurance.
- It is therefore required by the private insurance market to expand their operation and services,
- To create incentives for the employers to provide health insurance and
- To cover all people who are not covered by any government or employer insurance program.
According to the ACA, it is required that these companies create health insurance exchanges that will be regulated by the government and sell standardized health plans to the people. The federal governments also establish exchanges in those states where it does not provide such benefits.
These exchanges will ensure that people will not need to borrow more money to meet their medical bills as before from traditional as well as unconventional sources such as Liberty Lending. Therefore, they will not only have easy access to health care services but will also be able to stay away from debt.
There are separate exchanges for small businesses and individuals. The ACA requires that private insurance plans have:
- No lifetime or annual limits on coverage
- No exclusions for guaranteed issue or preexisting conditions
- Allowances to children remain on the health insurance of their parents up to 26 years of age
- Provision for limited variations in price
- Premiums evaluated on the basis of all factors such as geographic area, age, number of family members and tobacco use
- Allowances for limited out-of-pocket expenses up to $5950 for individuals and $11,900 for families
- No discontinuation clause in the coverage called rescission except if it is a case of fraud
- Coverage for specifically defined preventive services that has no cost sharing and
- A spend clause of at least 80% to 85% of the premiums.
However, there have been a few recent imminent changes made in the ACA that include:
- Stopping government funding of cost sharing reductions and premium tax credits
- Expansion of Association Health Plans and Health Reimbursement Arrangements
- Reduced regulatory burden levied by the Notice of Benefit and Payment Parameters, NBPP and
- Repeal of the individual mandate.
All these changes brought in by the ACA are intended to reduce spending and lending of funds by the government as well as the individuals on health care service and plans.
Government insurance programs
The largest government insurance programs are Medicare that funds the elderly, disabled, and patients receiving long term dialysis treatment and Medicaid that funds people with low income, living below the poverty level or who have disabilities.
However, a few other types of government programs include:
- State Children’s Health Insurance Program to cover the uninsured children of those families earning below average and cannot afford Medicaid
- Children and Youth with Special Health Care Needs to coordinate funding and resources
- Tricare that covers retired and active duty military personnel and their families
- Veterans Health Administration for eligible military veterans
- Indian Health Service for the American Indians and Alaskan natives living near or on reservation
- The Federal Employee Health Benefits Program for active and retired federal employees and their survivors
- Substance Abuse and Mental Health Services Administration to develop the behavioral health of the nation and
- Refugee Health Promotion Program.
As per the record, more than 35% people are covered by different government insurance and care programs.
As for the out of pocket sources, people pay out medical bills through their savings if it is small or borrow to pay large bills using credit cards or other money lending sources, provided they do not have any health savings accounts like 17% of the population does in the US.