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Health insurance is an insurance used for medical needs, like surgery, medicine, visits to the doctors. In the United States there are around 31 million Americans who do not have health insurance. A person with health insurance either will have to pay a certain amount or might not have to pay at all depending on how much the persons plan covers. Health insurance can cover medical, dental, and vision services. Jobs can also offer health insurance for their employees.

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Health insurance is a tool for managing the financial risks of illness and injury through cost-sharing. An individual becomes protected from risk by paying into an insurance plan along with a large group of others. The monthly amount a person pays for insurance coverage is referred to as a premium. When covered individuals are ill, injured, or disabled, the costs of their care either partially or fully come out of the plan's pooled funds. As a group's overall risk varies over time, health insurance premiums are recalculated and adjusted periodically to best reflect the current group's risk level. According to the US Department of Labor, the health insurance sector includes organizations that offer coverage for medical, dental, and vision care services. Because comprehensive health plans for adults in the United States are not required to cover dental and vision care, however, the term "health insurance" is used more commonly to refer to coverage of medical care such as doctors' visits, prescription medications, surgeries, and other preventive, acute, or chronic health needs.

Until well into the twentieth century, almost all Americans could be counted among the uninsured. If medical care was available and affordable, people paid for it directly when they needed it. Nineteenth-century industrialization increased rates of injury and illness among workers, and when people missed work, they also lost wages. More than the cost of care, the loss of income made sickness and workplace injury major drivers of poverty. Labor activists and other social reformers began advocating protection of workers against unforeseen health-related hardship, first through fair-labor reforms such as sick pay and later through proposals for national health insurance programs.

As early campaigns for publicly funded health insurance failed or were abandoned, the United States' private health insurance industry emerged. Baylor University Hospital introduced a forerunner of the employment-based approach in 1929, when it offered the local Dallas teachers union a prepaid plan-six dollars for up to twenty-one days of service over a one-year period. Meanwhile, President Franklin D. Roosevelt (1882-1945) considered making universal health insurance part of the New Deal, his landmark package of economic-relief legislation during the Great Depression (1929-1939). While the New Deal established publicly funded income insurance for retirees through the Social Security Act of 1935, the health insurance component was dropped due largely to opposition from the American Medical Association (AMA). The AMA, which had adopted the stance that nationalized health insurance represented an "un-American" governmental intrusion into the medical profession, was also instrumental in blocking the program proposed in 1945 by President Harry S. Truman (1884-1972). Truman's plan would later form the basis of Medicare and Medicaid, the federal health insurance programs for elderly citizens, disabled workers, and low-income families established by the Medicare Act and signed into law by President Lyndon B. Johnson (1908-1973) in 1965.

Beginning in the 1950s, most insured Americans obtained private coverage through their employers, many of which began offering benefits packages during World War II (1939-1945) when wartime restrictions temporarily froze wages. Benefits packages were popular among companies and employees, and in the absence of a national program, labor unions started negotiating for health insurance coverage as part of their collective bargaining agreements. In this way, the United States' unique employer-based private health insurance model was established. According to the US Census Bureau, 91.2 percent of the population had health insurance coverage in 2017. Among those with insurance, 67.2 percent obtained private health insurance coverage and 37.7 percent received government coverage. Employment-based plans were used by 56 percent of the insured population for at least part of the year.

Main Ideas

Health insurance is a risk-protection tool that manages the costs of health care by spreading them across an entire group; individuals become protected by paying a monthly premium for coverage.

Health insurance for US workers and their families has traditionally been obtained through employer-based benefits packages, with public insurance programs established for elderly and disabled citizens, low-income families, and military service members.

Insurance plans spread the individual's out-of-pocket costs across a range of payments, including premiums, deductibles, and copays or coinsurance, and must include an out-of-pocket maximum for the life of the policy.

Proposals to create a nationalized health insurance program were made by multiple twentieth-century US presidents but were abandoned due to political opposition and resistance from medical and insurance industry lobbyists.

All comprehensive health insurance plans sold in the United States must cover services deemed "essential health benefits" under the Patient Protection and Affordable Care Act (ACA), which also prohibits preexisting conditions clauses.

Proponents of health care reform argue that changes to the ACA in 2017 and 2018 have weakened its ability to expand coverage, manage costs and affordability, and regulate discriminatory practices in the private insurance industry.

Plans and Coverage

All comprehensive health insurance plans sold in the United States, whether publicly or privately funded or offered by an employer, must cover all services deemed essential health benefits under the Patient Protection and Affordable Care Act (ACA) of 2010. To be available for purchase through the federal health insurance marketplace, or a similar exchange offered by individual state governments, plans must provide coverage for ambulatory, emergency, preventive, and laboratory services; hospitalization; prenatal and newborn care; mental health and substance use disorder treatment; prescription drugs; rehabilitation services and devices; chronic disease management; and pediatric medical, oral, and vision care. Plans must also cover contraceptive and breastfeeding benefits, although certain types of religious and nonprofit employers may seek exemption from covering contraceptives. The ACA additionally made it illegal for health insurers to deny coverage or charge higher premiums to people with preexisting conditions, which are health conditions that an individual had prior to the effective date of a new insurance policy.

Both public and private insurance policies apply cost-sharing in many ways, with most plans spreading the individual's total out-of-pocket costs across a range of payments. In addition to a premium, most insurance plans include a deductible, or the amount of services the individual pays in full before the insurer begins covering costs. With a deductible of $1,000, for example, the plan begins paying its agreed-upon share of services when a covered individual has paid for $1,000 worth of services, regardless of how much of the policy year has elapsed. Plans with relatively high premiums tend to have relatively low deductibles and vice versa. Health insurance plans with very low premiums and very high deductibles are called catastrophic coverage and are only available to young people and those with special exemptions. In 2019 the deductible for all catastrophic plans was $7,900-more than five times the average deductible of $1,573 for individual employer-based plans in 2018, according to the Kaiser Family Foundation (KFF).

Once the deductible is met, individuals are responsible for copayments or coinsurance, which determine their out-of-pocket share for services. Copays are flat rates, such as $25 per primary care visit; coinsurance is percentage-based, such as 20 percent of services billed. In either case, the insurance plan pays the provider for the difference. All plans also have an annual out-of-pocket maximum that caps the total amount covered individuals will have to pay for services, not including their monthly premiums. If the out-of-pocket maximum is met, the plan pays 100 percent of covered services billed for the remainder of the policy.

Most insurance policies leverage provider-group partnerships to manage costs. For example, exclusive provider organizations (EPOs) and preferred provider organizations (PPOs) are plans that charge less for services from predetermined networks of providers. In-network care also costs less with health maintenance organizations (HMOs) and point of service (POS) plans, but these plans usually require referrals, or written orders, from primary care providers before approving coverage of certain services. Referrals are commonly required for short-term or recurring treatments such as physical therapy and expensive testing such as magnetic resonance imaging (MRI) scans to prevent unnecessary services from raising the group's premiums.

Critical Thinking Questions

How did the employer-based insurance model in the United States contribute to there being less awareness of health care costs among insured Americans?

Do you think the United States should replace its private health insurance industry with some other kind of system? Why or why not?

Should large employers be required by law to include coverage of contraceptives and reproductive health care in the insurance plans they offer their employees, regardless of all other factors? Why or why not?

An Industry in Flux

The rise of employment-based health insurance coverage in the decades following World War II had the effect of separating US consumers from the costs of their health care. Because employers paid for most or all of their employees' monthly premiums, insurers, hospitals, and other health care interests were able to negotiate prices behind closed doors. While nontransparent pricing practices artificially drove up the cost of services, industry growth, corporate consolidation, administrative bloat, and growing rates of chronic illness among the population all contributed to periods of dramatically rising health care costs in the late twentieth century. Rising costs spurred businesses to revisit employee benefits packages, and comprehensive employment-based plans became both less common and less affordable for workers, many of whom were simultaneously experiencing wage stagnation. High monthly premiums and high out-of-pocket costs, often for plans that covered fewer services or denied coverage for preexisting conditions, meant that health care costs became increasingly burdensome in the United States, even for individuals and families with health insurance coverage. According to the American Journal of Medicine, more than 62 percent of US bankruptcies in 2007 had a medical cause, up from an estimated low of 8 percent in 1981.

The resurgence of health-related poverty and financial hardship in the United States reinvigorated calls for health care reform. A study conducted by the Organization for Economic Cooperation and Development (OECD) in 2010, for example, indicated that, while Americans did not consume more hospital services than citizens of other developed nations, the costs of such services were up to 60 percent higher than those in comparable countries. Supporters of reform argued that such findings showed it was possible to achieve more affordable insurance coverage for all residents. Since US businesses, lobbyists, and politicians had repeatedly rejected single-payer programs, the ACA was designed to work with the existing private industry to expand access to affordable comprehensive health insurance. According to KFF, in 2013, the year before most of the ACA's provisions went into effect, forty-four million nonelderly Americans did not have health insurance; by 2016, the number of uninsured had fallen below twenty-seven million.

Despite its impact on decreasing the uninsured rate, however, many of the ACA's key provisions for keeping coverage affordable have been openly undermined and challenged by Republican lawmakers. For example, the ACA included an annual tax to be levied on individual taxpayers who did not have ACA-compliant insurance coverage for the corresponding tax year. Commonly called the individual mandate and officially called the shared responsibility payment, the tax was intended to incentivize purchasing comprehensive coverage, and effectively made all taxpayers-even those who chose to remain uninsured or paid for non-ACA-compliant insurance-contribute something to the public system. The individual mandate was effectively repealed through tax legislation signed by President Donald Trump in 2017, and as of March 2019, there was no penalty for going without insurance or buying into a non-ACA-compliant plan. Opponents of the individual mandate argued that it was un-American because it allowed the government to intrude into citizens' lives and dictate their choices. Supporters, however, continue to assert that it was the backbone of the ACA and that its repeal weakens the law's other provisions for keeping costs low and preventing unequal access to affordable coverage. As of early 2019, the administration's efforts to repeal the remainder of the ACA through the courts continued.

The Trump administration has also sought to increase access to short-term insurance plans, which are private plans designed to fill short lapses in coverage and are not required to be ACA-compliant. The stated intent of such rule changes is to free individuals from having to purchase plans that they determine to be too expensive, disagree with on principle, or cover services they do not use. Use of such plans was originally capped at ninety days without the option of renewal. However, a change by the federal government in 2018 expanded the permitted duration to twelve months and allowed the plans to be renewed for up to three years.

Source Citation

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Health insurance is a tool for managing the financial risks of illness and injury through cost-sharing. An individual becomes protected from risk by paying into an insurance plan along with a large group of others. The monthly amount a person pays for insurance coverage is referred to as a premium.

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According to Central for Global Development  “..over 17,000 Thai children under five died each year, two-thirds from easily preventable infectious diseases, and out-of-pocket health spending tipped one in five of the poorest Thai households below the national poverty line. The United States should learn from other countries like Thailand. In Thailand they have a program where almost 98% of Thai citizens are enrolled in it. It’s called the “30 Baht Treats All Diseases”. Thai citizens pay as little as a dollar for every medical need. Before this program was created, 1 in 4 people did not have insurance and if they did the insurance coverage would not be much. The United States can create a similar system like this for everyone because everyone deserves the right to have access to good health care. In the United States more than 26,000 Americans die yearly because they don’t have a health insurance to pay for their medical needs.

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"30 Baht Treats All Diseases"

In Thailand, UCS followed a long string of efforts to improve equity in health. In 1975, the government had made health services available to the poor free of charge. Recognizing the problem of a lack of health centers in rural areas, the government froze all new capital investment in urban hospitals between 1982 and 1986. It reallocated those resources to rural district hospitals and health centers, trained and employed doctors and community health workers, and recruited and trained village volunteers to strengthen primary care.

The compromise allowed for the passage of the National Health Security Act in 2002, and the UCS was ready to take flight. source Rollout was swift: starting with six provinces in mid-2001, the scheme was extended to nearly all Thialand's 75 provinces by the end of the year. source As the UCS reached an additional 18 million people by combining existing pools form the MWS and the HCS, the group of uninsured Thais shrunk dramatically. By 2001, the UCS was covering 48 million members and their families, leaving less than 2 percent of the Thai population without health insurance coverage. source

One of the scheme's central administrative features was that the provider and the purchaser of health services were two discrete entities. The Ministry of Public Health was responsible for providing health services, and a new independent entity, the National Health Security Office (NHSO), managed and operated the UCS.

The UCS budget, determined by the number of beneficiaries multiplied by a standard per-person rate, also increased in absolute and per capita terms. In 2002, the government allocated roughly BHT1,200 (US$35) per beneficiary, and increased this to about BHT2,700 (US$80) by 2012. source Meanwhile, government expenditure on other schemes, such as the SSS, remained flat. Thailand has achieved near universal coverage at slightly lower cost to the government relative to the country's GDP source than other upper-middle-income countries such as Colombia and South Africa. source

Thai reformers were quick to learn from international experience, existing Thai health coverage schemes, and initial stages of the UCS rollout. In particular, the implementation of the SSS informed the decision to separate the healthcare purchasing and healthcare provision. The government also procured medicines and devices at the central level, leveraging the sheer size of UCS coverage to negotiate lower prices. UCS architects' ability to craft a strategy based on past experiences ultimately improved the scheme's efficiency.

Another important factor in the program's success was the country's judicious approach to determining which health services and technologies the program would cover. These decisions are made through an evidence-based, systematic process conducted by the Health Intervention and Technology Assessment Program (HITAP), an autonomous public arm of the Ministry of Public Health.

Paying for Provincial Performance in Health

A Step Up for the Children Apartheid Left Behind

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"30 Baht Treats All Diseases" In Thailand, UCS followed a long string of efforts to improve equity in health. In 1975, the government had made health services available to the poor free of charge. Recognizing the problem of a lack of health centers in rural areas, the government froze all new capital investment in urban hospitals between 1982 and 1986.

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“Government Money is limited, and the only way to get more is by extracting it from individuals” If we were to give everyone health insurance at the cost of $2-4 per person then the government would have some way of extracting money from individuals at a low cost and those who would like to pay can have a way of having access to doctors, dentist, etc... Also the government could use money from things that aren’t as important. They could also start making the wealthy pay taxes. If they did that then they would have more than enough money for health insurance and healthcare workers.

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I like the idea of my site being a snapshot of my thoughts that I can point to people when having a discussion.

I don't like repeating the same arguments over and over.

So here are some of my thoughts on "Socialised Healthcare"[1] for wider exposure and future reference.

I'll start with 5 agreeable axioms and use them systematically to derive "Healthcare should not be free"

1. People own their own time

2. Markets are the most efficient price discovery system

3. We want the best treatment possible for the most people possible

4. People respond to incentives

5. Government Money is limited, and the only way to get more is by extracting it from individuals (governments don't create value, individuals do)

2 + "Free Healthcare" -> 6a 6b

In a world of free healthcare (no market) we can't know if we're paying too much or too little for healthcare.

So let's branch out this deduction in the two different cases, 6a and 6b.

6a is with free healthcare we're paying too much for healthcare

6b is with free healthcare we're paying too little for healthcare

6a + 5 -> 7

If people pay too much for healthcare and government money is limited, then more money is taken from productive places and invested in less productive places.

The price of healthcare becomes unfair. Everyone is forced to pay an unfair price.

7 + 4 -> 8

If people have incentives to do things that aren't productive, the world is less prosperous.

8 + 3 -> Conclusion

If the world is less prosperous and socialised healthcare is more expensive than individually paid healthcare, we're getting a really bad deal.

To get the best treatment possible for the most people possible we should then just pay for our own care. (and for the one of the people that are close to us)

1 + 4 -> 9

As people own their own time and they'll optimize their lives for either more free time, more wealth or status.

A higher income allows individuals to pick the mix of things they want from life.

6b + 9 -> 10

If people are paid less then what they should be for healthcare work they'll move to other areas, and medical research will be slower.

Healthcare will also be crowded by less skilled people.

10 + 3 -> Conclusion

With more incompetent doctors in the short term people get worse healthcare.

In the long term you get even worse results, because of less incentives for research.

[1] We'll talk about "Free Healthcare" and "Socialised Healthcare" as interchangeable terms.

Featured image adapted from BestServedBold 's Dribbble

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An axiomatic deduction of "Healthcare should not be free" starting from 5 agreeable axioms. I like the idea of my site being a snapshot of my thoughts that I can point to people when having a discussion. I don't like repeating the same arguments over and over.

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According to Robert Hughes “I think it’s very disturbing that people have to go to GoFundMe in order to get their medical treatments paid for. It creates a power imbalance,” Here he talks about how bad it gets for some people that they have to raise money from websites like GoFundMe just to get their medical bills. In 2018 there were 119,373 fundraisers just to pay for medical bills on GoFundMe. It just goes to show how expensive it is to seek medical help in the United States. Some people rather not even seek for help and just die and give up because they can’t continue paying for their treatments.

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Nothing quite exposes the inequalities that exist in American society more than the health care system. It's a complex combination of private insurance, public programs and politics that drives up costs, creating significant barriers to lifesaving medical treatment for large segments of the population. In America, access to quality health care often depends on income, employment and status.

Robert Hughes, professor of business ethics and legal studies at Wharton, is an advocate for universal health care coverage. Drawing deeply on his research in philosophy, Hughes believes that equal access to medical care is beneficial for both liberty and social stability. Health, he says, should not be tied to wealth.

"I think it's very disturbing that people have to go to GoFundMe in order to get their medical treatments paid for. It creates a power imbalance," he said, referring to the crowdsourcing platform used to help raise money for patient bills. "That's why I say that truly universal health care would be good for people's liberty. Because you're not really free if you're depending on charity, especially discretionary charity like the kind you see on GoFundMe, for a basic need like health care."

Hughes recently joined the Wharton Business Daily radio show on SiriusXM to discuss universal health care in the context of the presidential election. (Listen to the podcast at the top of this page.) President-elect Joe Biden has said he will protect and rebuild the Affordable Care Act, which has been under attack since it was enacted in 2010 under President Barack Obama.

The ACA, commonly referred to as Obamacare, brought the U.S. closer to providing universal health care through subsidized private health insurance, but Hughes said there's still a wide gap. He believes policymakers should ensure that everyone has coverage and access to the same needed treatments.

"It's very disturbing that people have to go to GoFundMe in order to get their medical treatments paid for. It creates a power imbalance."

"I think it's totally feasible for us to change the health care system, if we all were willing to do the right thing. But we're not all willing to do the right thing," Hughes said.

The professor argued the case for universal health care in a paper titled "Egalitarian Provision of Necessary Medical Treatment," which was published last year in the Journal of Ethics. (The author-accepted version is here.) He examined the health care systems of the U.K., Australia and Canada, concluding that Canada's single-payer system is the most advantageous for the U.S.

Private insurance would still exist under such a setup, but it could not be used to pay for treatments already covered under universal health care. This provision would eliminate wealth as the controlling factor in health.

"I don't understand why there's so much resistance to the idea of truly universal health insurance in the United States, given that this is something that other industrial countries just do," Hughes said.

He acknowledged that the U.S. doesn't have the "political will" to change a system that's been entrenched since the end of World War II, when employers began offering health insurance to their workers instead of higher wages.

"We can't wave a magic wand and go back to 1946," he said. "I don't see the United States completely uprooting all these insurances. And that means we might need to create a model that keeps a lot of what we have, making it more accessible to more people, rather than creating all new institutions from scratch."

Knowledge@Wharton interviewed Hughes last year about his paper. For an in-depth look into his research and advocacy, read the interview here.

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Does the U.S. Need Universal Health Care? - Knowledge@Wharton

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Nothing quite exposes the inequalities that exist in American society more than the health care system. It's a complex combination of private insurance, public programs and politics that drives up costs, creating significant barriers to lifesaving medical treatment for large segments of the population.

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Health Care Should Be More Affordable in The United States

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Health Care Should Be More Affordable in The United States

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In this video, they talk about how Medicaid should be extended to all Americans. They also talk about how 50 million Americans would rather not go to seek medical help because they can’t afford it.

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DEVASTATING Number Of Americans Can't Afford Healthcare

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In this video you can see that Bonne says that she is sick and she can’t go to the doctor because she can’t afford the medical bills

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Health Care in America: Insurance Gaps and Medical Deserts

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This is a graph of how many Americans don’t have insurance. You can see around 2013/2014 the numbers start going down but in 2019 it had started going up but it lowered during 2020.