Almost everyone has some sort of insurance. It is primarily intended to be a hedge against risk, e. G., in the event of a death, life insurance on the deceased provides his or her dependents with an alternate source of funds. Health insurance is somewhat like that, but it has other properties as well, mostly related to its complex history as an employee benefit in the United States. Let’s take a look at this very controversial subject.
Early forms of coverage appeared in the nineteenth century. In its current form of medical expense coverage, which pays for hospitalization and other medical expenses, it first became available in the early twentieth century. There are many variations on what is and is not covered, and the extent to which different expenses are reimbursed.
The provider may be a private company, or it may be a government agency, as is the case with Medicare. Payments may either go to the insured party, or directly to the provider of services. The premium may be paid by the insured party, a government agency, an employer, some other organization such as a labor union, or some combination of the above.
Many Americans are covered by plans offered as a benefit by their employers. This is not typical in most of the world. During World War II, American employers were competing for scarce labor and were not allowed to wage raises. This caused them to compete by enhancing the benefits available. This employee benefit was often free or very highly subsidized. However, as medical costs have skyrocketed in recent years, the employee paid portion of the cost has drastically increased. There are income tax provisions that allow the employee paid portion to be subtracted from taxable income.
Health plans are offered by health maintenance organizations as a replacement for conventional coverage, though they could be considered to be insurance. They generally have a fixed payment that covers all medical expenses. It is not clear if they work better than conventional plans, though many people advocate their use. They have the advantage of being biased towards preventive care. On the other hand, they have been accused of rationing, i. E., limiting access to health care.
Unfortunately, many Americans don’t have medical coverage. One reason for this is its high cost. Also, people who are not employed, or whose employer doesn’t offer this benefit, are at a huge cost disadvantage. Not only are they lacking any employer subsidy, but also they are generally limited to personal plans, which tend to be much more expensive than group plans.
In 2010 the United States enacted major health care reforms. Many of the changes will not be effective for several years, and thus may possibly be modified before they take effect. One change effective now is that parents can continue to cover their children till they reach the age of 26. Also, coverage of pre-existing conditions is now required. Both of these changes will tend to increase the cost of insurance while they also extend its coverage.
There is still a lot of discussion about this subject in the United States, and it is likely that more changes will be coming. The Medicare model, where a single payer, the government, provides the coverage, is favored by many. On the other hand, many are opposed to this kind of increase in the size of the government. It is hard to imagine what health insurance will be like in ten years.