Health Insurance in the United States EXPLAINED
Table of Contents
- Health insurance in the United States
- Explaining the New Legislation and how it pertains to you
- What are the end results of this bill?
- Types of Plans Currently Available
- Private Health Insurance Coverage
- Private Benefits and Restrictions
- Public Insurance
- Best-Rated Insurance Plans
- Health Insurance Resources
Health insurance in the United States of America is a difficult concept to understand at times. With over 300-million residents in the country, 15.3% remain uninsured completely, while the other 84.7% have health care plans via employers' private pools, private companies, the Veterans Health Administration, the Children's Health Insurance Program and Medicare/Medicaid/TRICARE.
Insurance in general is an easy concept to understand, however. Paying a rate-usually monthly-to an entity of some sorts providing coverage will mean that, should you fall ill and need medical assistance, your insurance package should cover a percentage or all of the costs.
A larger problem the American public faces, besides the millions uninsured, is the "underinsured" crisis. Roughly 35% of all Americans with existing health care plans find that their particular packages do not cover the full costs of medicines, procedures, and more private plans fail to cover preexisting conditions.
Since most of the health care in the U.S. is provided by the private sector, individuals are paying out of pocket for health packages instead of paying into a single-pay subsidies pool, as with Canadian and UK health systems.
Changes have recently been made to America's health care industry, via legislation passed by Congress. With 2,000 pages of legislation that even the lawmakers failed to read, America's health care bill, dubbed "Obamacare," has become one of the most difficult things to understand in recent history. However, understanding the "gist" of how this legislation works will enable people to make crucial decisions about their and their family's health and other expenses.
Explaining the New Legislation and how it pertains to you
The health care bill passed in March of 2010 signaled the biggest change to America's health care system in decades. Politicians collectively decided something needed to be done. And with the bitter divide over which side was right, the American people saw little compromise in a 2000-page bill.
What are the end results of this bill?
One of the major problems the bill set out to address was the cost of health care for Americans. A high-risk pool was set up and insurance from employers is mandatory. This means every employed person in the U.S. will have healthcare and, basically, every person that cannot afford health insurance will have insurance provided for them.
Some of the fears associated with the health care legislation include the costs of small businesses and middle-class families, a threat of care rationing, a lack of doctors and medical treatment centers, and higher taxes over the long haul.
The new health care legislation can be explained in simple terms, however, by looking at the current status. The CBO has released an estimate of the costs over a ten year period. These costs are expected to rise to over one-trillion dollars. For this reason, the legislation is again put on hold.
For all parties concerned about this new health care, unfortunately, you will have to wait a longer duration now due to government's backtracking through the bill. Simply put, none of the bill's changes are expected to take effect, as the entire bill is going back through the ringer and may in fact be vetoed by the president.
Types of Plans Currently Available
Current health care plans in American can be broken into three separate categories - Private, Public and the Uninsured. Each category has subcategories, i.e. different plans, and the overall country's structure provides some form of care to every individual in the country. No one goes without care in America if they're in need.
Private Health Insurance Coverage Explained
The majority if insured Americans receive their health care (insurance) coverage via a private insurance company. Currently in the country, 59.3% of all insured Americans have coverage through an employer's group coverage package.
Unlike a normal high-risk pool, where individuals needing insurance for health reasons would share similar packages, a group coverage pool is simply an efficient way for people with something in common-in this case an employer-to pay into a health care package. Group pools usually cost less since they're not risk-based; however, not every individual in the pool pays the same rate. Premium prices are dependent on age, location, preexisting conditions and other factors, even though the insurance package will be relatively the same.
Group insurance through an employer can also cover spouses and children, based on the particular package. Many employers today are seeking smaller group packages due to the state-by-state restrictions on health care and the rising costs, so while the majority of insured Americans have employer-based insurance, that number is on the decline.
Employer-based insurance can also include self-funded plans. A self-funded plan doesn't deal with private insurance companies at all. Instead, money is pooled by employees and, should an employee need care, the funding is then available to pay the medical bills after treatment.
With private insurance, the other type of plan is an individually-purchased plan. This is a plan more along the lines of car insurance, meaning it's up to the individual to find a private insurer, choose the type of plan they want (single-person coverage, family coverage, etc), and pay a monthly rate the same as with any other bill.
Typically, health insurance plans of the private variety are handled the same way state to state. The two most popular types of insurance plans are indemnity plans or fee-for-service plans (basically the same thing).
With these plans, you will have the freedom to choose your doctor/medical provider, you will have input in the treatment options, and after you've received treatment, you will pay the bill out of pocket-if possible-and send a claim to your insurance company for reimbursement.
Another type, called a managed-care plan, accepts a flat rate per month for all theoretical services. This means, simply, that all care provided to you is automatically paid for by the insurance company, no matter what is needed, and you continue to pay only a monthly rate. Managed-care plans also cover preventative health services - the combination means these types of private plans cost more, whether they're employer or individual-based.
The two most popular types of managed-care plan providers in America are Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs).
An HMO plan will have a predetermined facility and doctor for you and/or family. When you need treatment, you will have to visit the contracted facilities and see the contracted physicians in order for the insurance to pay the bill.
PPOs basically work the same way. However, PPOs aren't written in stone. Members can seek outside care, but the out-of-pocket costs are added on.
Private Benefits and Restrictions
There are four types of major benefits provided to private plan holders: hospital-surgical benefits, basic provisions, major medical and riders.
Hospital-surgical benefits will provide members with coverage for all inpatient services, including diagnostic tests, procedures, nursing, and room and board.
Basic provisions cover far less and include: ambulance/transportation services, and predetermined medical tests, oxygen and smaller treatments.
Major medical benefits cover the most, including both inpatient and outpatient care. Basically, this comprehensive coverage provides from all aspects of treatment.
A rider is like an add-on and covers various items like prescription meds, glasses, perhaps prosthetics, and other supplementary benefits.
In terms of restrictions, it's important to realize that all insurance, be it government-provided/taxpayer subsidy or private-based, has restrictions. Each individual plan will have its own restrictions, but there are a few you can expect universally.
For starters, plans will deal with deductibles and copayments. A deductible is the monetary amount which the insurance holder must pay before the insurance company takes over and starts its coverage. These deductibles range depending on which type of plan you have and which carrier you choose.
Copay is what the insurance holder pays the insurance company every time a medical service is received. Most insurance plans have small copayment restrictions. In reality, copayment clauses are in place to prevent moral hazard. When individuals are forced to pay in and contribute to their own health care costs, it eliminates a lot of unnecessary produces and thus makes the private insurance process more efficient.
Other restrictions follow along those same lines and work to eliminate unnecessary hospital visits and procedures. Some insurance plans will deem that a treatment must be medically necessary in order to pay the bill, and almost every plan is subject to use a statistical analysis to ensure the treatments received are reasonably priced.
One of the biggest criticisms of all private insurers has to do with preexisting conditions. Since 1996, with the Health Insurance Portability and Accountability Act, pregnancies and preexisting conditions of a newborn if insured within 30 days of birth will not make parties ineligible to receive insurance. However, most insurance companies will charge more or outright refuse to insure someone with a preexisting condition, based on its severity.
Public insurance can be classified as either state or federally-funded insurance plans. Public plans cover 83-million Americans, 27.8% of the population, including disables peoples, veterans, elderly and the indigent.
The public health care options are far easier to explain, simply because there is only one body controlling the quality of care - the government. However, the intricacies of public care, including financing and eligibility, are nearly impossible to comprehend, much less provide a simple definition for. The attempted health care overhaul was 2000 pages; explaining Medicare and Medicaid properly would take 20,000.
It can be put in simple terms, however. Medicare, for example, is a brand of publically-funded health care available to U.S. citizens of over 65 years of age and disabled individuals. Medicare is funded by social security taxes, and it's not so much an entitlement in America, because everyone working pays for it.
Medicare is a federal program, where its smaller counterpart, Medicaid, is a state-run program. Medicaid is smaller in size and is available for children, pregnant women and disabled individuals. Medicaid receives funding from both state and federal taxes.
Children also have the State Children's Health Insurance Program available to them, providing for low-income children not qualifying for Medicaid. Essentially, it's an extension of Medicaid and also administered by the individual states with matching funds.
TRICARE is the revamped Civilian Health and Medical Program of the Uniformed Services health care program intended for military personnel and their families. It's part of the Military Health System, also caring for American vets, and uses an HMO-like plan and receives public funding.
There are currently over 30-million uninsured individuals in America. Some people are simply not aware of the public options available to them, so they fail to apply for publically-funded benefits. Others fail to quality for public health insurance but still cannot afford private insurance.
For people falling between the cracks, there are still plenty of options for health care. For starters, all emergency rooms in America will accept anyone. By law, emergency rooms must offer care and may not turn you away due to a lack of insurance.
There are also many clinics operated in America, both privately and publically funded. Clinics will turn you away if you earn x amount of dollars, but their criteria isn't nearly as strict as government-controlled health insurance programs. This means clinics are always a good option for people seeking care in the short term.
Best-Rated Insurance Plans - Affordable Health Insurance ?
Unfortunately, private insurance companies must operate within their state. This is part of the reason that health insurance is so expensive today. And equally unfortunate is the fact that the health care legislation did not attempt to open up competition over state lines. This means the best-rated private plans are only available in that state.
If you're looking for solid affordable health insurance plans, you will have to check out what's available in your state. The information is easy to find.
Federal/state-funded programs are different. For Medicare, you can apply for this program no matter which state you live in. Kaiser Foundation Health Plan of Colorado, Fallon Community Health Plan and the Geisinger Health Plan are the top-three Medicare plans available.
Kaiser Foundation and Fallon Community also have two of the top-three Medicaid plans, with the Boston Medical Center HealthNet Plan scoring big as well.
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Health Insurance Resources
The Health Insurance Resource Center is designed to help consumers make informed decisions when purchasing health insurance for themselves and their families.
Official information and services from the U.S. government.
Health insurance is a formal agreement to provide and/or pay for medical care. The health insurance policy describes what medical services are "covered" by the insurance company. There are medical services that are not "covered" and will not be paid by your insurance company.
This guide describes different kinds of health insurance plans and answers common questions. There is a glossary of health insurance terms as well as resources for more information.
Centers for Medicare & Medicaid Services.
Medicare.gov provides information about the parts of Medicare, what’s new, and how to find Medicare plans, facilities, or providers.
We are helping solve the challenges facing the health care system. Our goal is to get everyone covered, improve the quality of health outcomes, and provide better value for each dollar spent on care. We will continue to work toward these goals.
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