Healthcare Insurance in USA:
In the United States of America, nearly everyone
is covered under some type of insurance. What is the need for this healthcare
insurance and how long has insurance been around?
Insurance has been around in USA for about 100
years. After the world war II, the initial reason insurance was launched was
due to wage freeze brought about by the Federal Govt which prohibited employers
from hiking the wages of employees beyond a certain limit to curb inflation. To
deviate from this and to offer a better salary package for deserving employees
and to entice top performers in the industry, employers offered fringe benefits
in the form of insurance. This grew popular and insurance payers sensed the
market was set to grow immensely in the future and started investing in it.
Some countries offer universal health care. This
simply means everyone is covered under the health insurance and so there is no
need to worry about medical cost during a sudden medical emergency situation.
There will be a copayment depending on the service offered but mostly the
health care of the whole nation will be taken care of. But this did not work
out in the USA. There are many reasons for this. The primary among them is the
fear that doctors will be forced to join HMO (health maintenance organization)
and the rising healthcare cost which would form a substantial portion in the
budget. So this led to the failure of HillaryCare which was a form of universal
health care for all including aliens settled in the US.
Managed care is quite widespread throughout the
country. Managed care simply means that there is a tie-up between the insurance
and doctors and they agree to provide care at a fixed amount for patients who
are enrolled in that insurance.
So what exists now is HMO, PPO and EPO. The
government funds Medicare and Medicaid for the underprivileged and elderly
population. Medicare and Medicaid form the biggest chunk in the US budget.
Based on data from April 2017, here is a rundown
of the top 5 largest health insurance payers in the US:
1. United
Health Group – 2016 Net revenue - $184.8 billion.
2. Anthem
– 2016 net revenue - $89.1 billion
3. Aetna
– 2016 net revenue - $63.1 billion
4. Humana
– 2016 net revenue - $54.3 billion
5. Cigna
– 2016 net revenue - $39.7 billion
Health insurance premiums are nontaxable. IRS
brought this rule in 1954. Due to this USA endures a deficit of $250 billion
every year.
After the Affordable Care Act (ACA) was passed,
more people were included in the health care insurance fold which of course
puts more pressure on the federal budget. Now roughly about 90% of Americans
are covered under the insurance. The total healthcare expense for 2015 was a
whopping amount of $3.2 trillion. And quite surprisingly a big chunk of that
amount is earned by the hospitals and not doctors. Surgeons are the highest
paid doctors. Anesthesiologists also earn a lot.
Defensive Medicine: This term refers to “Attack is
the best form of defense.” In Medicine, this boils down to some doctors who
practice defensive medicine by ordering numerous tests like x-rays, lab tests
to diagnose a disease or at least to prevent any new developments. Though this
helps prevent the disease in some patients, a huge number of patients are being
subjected to these unnecessary tests who may never develop the illnesses.
Ultimately the healthcare costs expand even more due to this.
As President Trump has recently acknowledged, healthcare is
a complicated affair in the US.
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