Distribution of national health spending: ACA, Medicaid and Medicare

Distribution of national health spending: ACA, Medicaid and Medicare

Health care is one of the most debated provisions that governments are keen on. In the USA, a review into the health care spending statistics from 2011 to 2016 reveals that the money is distributed between private insurance, Medicare, Medicaid, other government programs, out of pocket and other private firms (RAND Corporation, 2010; Baicker& Chandra, 2008). During the period, private insurance has been seen to be the largest contributor to health care with a significant percentage to Medicare. This is closely followed by Medicaid and other government programs. Funds paid directly from out of pocket and other private farms have the lowest contribution.

In 2016 for example, private insurance contributed 33%, Medicare 20%, Medicaid 17%, other government programs 12%, out of pocket 10% and other private firms also contributing 8% (Bodenheimer, 2005). This indicates that private insurance is the largest contributor to healthcare. Private insurance usually receive money from employers which are companies with varied number of employees. They contribute the money on behalf of the employees who also make contributions from their pay. Medicare and Medicaid are almost having the same contribution level with 20% and 17% respectively (Blumenthal, 2006). It is also important to note that up to 10% of the care costs still come from out of pocket.

Distribution of Health Insurance Coverage among USA population

In USA, majority of people are covered by their employers taking care of 49% of the population. This is followed by Medicaid at 20% and Medicare at 14%. The non group insured people are about 7% and 2% for other public groups. Totally uninsured people are about 9% of the total population (RAND Corporation, 2010). In this analysis, those covered by Medicaid includes all the individuals covered by Medicaid directly, Children’s Health Insurance Program, and those with Medicaid and other types of coverage or those with dual coverage like Medicare (Kaiser Family Foundation, 2009).

Those indicated under Medicare includes the individuals covered by Medicare, Medicare advantage and every individual with Medicare and non Medicaid cover where Medicare is the primary payer. All the ones listed under the employer are those covered by the employer and all their dependants in the same household. The ones listed as other public groups include those covered by military and the veterans. The other uninsured are the individuals without any form of insurance or those under the Indian Health insurance only. This may also include those without stable employment and move from one job to another as casuals (Blumenthal, 2006).

Patient Protection and Affordable Care Act

The Patient Protection and Affordable Health Care Act 2010 (PPACA) also called the Affordable Care Act is the new health law in America also referred to as the Obamacare (Bodenheimer, 2005). It is made up of several acts such as the affordable health care for the American act, the patient protection act, health care and education reconciliation act, student aid and fiscal responsibility act and the amendments of the food, drug and cosmetics act and the Health and Public Services Act (Eibner, Hussey, & Girosi, 2010). The health care act attempts to reform the health care system and reduce the health care spending in the USA.

This act touches directly on the rights and protection of the Americans, sets rules for the insurance companies that involves taxation, funding sources and spending of the health care funds. This law gives more Americans access to quality and affordable health insurance. This means that the Americans can get treatment that they need when they need it and at affordable costs (Kaiser Family Foundation, 2009). In the past, the insurance industry made health care costs unaffordable for many people, the act has reduced the premiums and out of pocket costs to millions of families and small scale business owners.

The reduction of premiums has made it possible for over 32 million Americans who could not afford the costs before to do so. This has positively impacted the lives of millions of Americans. The law has also spread the risk to all the insured people equally without discrimination. Issues such as gender, sexual orientation and health status made the insurance companies to discriminate against some individuals with the argument that they were more risk averse than others. The act has made all the insurance companies consider all people to be equal. It has also prevented avenues of fraud and reduced government spending on health care.

The passing into law of the Affordable Care Act provided assistance to individuals who were uninsured due to pre-existing conditions. In order to address this problem, temporary high risk pools were established for people living with the preexisting conditions. The insurance companies were made not to charge them more due to their conditions and the health care providers were made to treat them equally as the rest of the citizens. The act also extended the dependants coverage of their children till the age of 26. This makes it possible for the dependants to remain covered by the parents till they get stable jobs elsewhere which can offer the service. Even though the act may not have been liked by the health care providers and the insurance companies, it has brought relief to the citizens of America (Claxton, 2008). It has also reduced the soaring expenditure on healthcare.

Employment Based Health Insurance

This has evolved over a long period of time. Initially, unions, mutual aid societies and other private groups developed various forms of protecting their members from financial catastrophe such as death of a bread winner. Even though such were described as sickness insurance, they did not cover medical bills. Later in the 19^th century, some mutual aid societies offered limited medical bills coverage. During this time, hospitals were houses of the sick and mostly poor people suffering contagious diseases (Baicker& Chandra, 2008). The advancement in public health and development of medicine in the fields of bacteriology and anesthesiology made painless treatment of some maladies a reality and some hospitals started advertising and costing their services.

Granite cutters union was among the first to establish national sick benefit program. This was more an income protection method than medical care plan. Later in some industries like lumbering industries, the workers organized for the medical service but the employer paid by a checkoff system. This was tricky for the employees and the employers. Some companies resorted to having company doctors. This was also not popular with the employees as they felt that the doctors served the interest of the companies but not the employees. These developments were seen in Europe as early as 1877.

These developments have been seen to be different in USA where voluntary private action has managed with some assistants from facilitating national legislation to extend coverage to the majority of non elderly population. This also gave birth to social insurance to which many companies subscribe to today.

Fully insured and self insured health plans

A fully insured health plan refers to the employer sponsored health plan where the company pays premium to the insurance carrier. Here the premium rates are fixed for a year depending on the number of employees. There may be changes in the monthly rates only when the number of employees change otherwise it remains constant. The insurance carrier collects the premiums and pays claims based on the coverage of beneficiaries. The covered individuals are expected to pay any deductable amounts or co payments required in accordance with the policy.

A self insured health plan refers to the health plan in which large companies operate their own health plans instead of purchasing the services from an insurer. This helps the employer companies to save some money which would have been made by the insurance companies. This means that the company may incur more expenses incase larger claims have to be paid than planned for and the company may also save a lot of money if the claims are less than as was planned for.

Health Insurance Coverage in California

California has a resident population of over 36million people. The number of uninsured residents is estimated at 18.45%. Many insurance companies have restrictions for the coverage of senior citizens who are usually 65years and above, children under 18years, low income families, the self employed, employees of large companies, employees of small companies, part time, seasonal and temporary employees, the unemployed and the college students. It is common knowledge that health complications increase with age. Health cover is very important especially in old age. In California, there are companies who offer cove specifically to those who are 65 years and above.

Children under 18 are usually considered as dependants by many insurance companies. They benefit from the premiums paid by their parents. There are many companies who specify the number of dependants they can allow per member contributor. For low income families, payment of premiums is a challenge. There are low cost insurance companies that can offer family packages for low income earners. For example, The First Family insurance can offer such packages. In cases where the parents are unemployed they can benefit from the Children’s Health Insurance Program (CHIP).The National Social of Social Responsible organization (NASRO) is a private nonprofit health insurance cooperation working to help families, individuals and self employed people to manage their health insurance. They guide the residents of California through all the options of the most affordable rates and make them understand the Affordable Care Act (Eibner, Hussey, & Girosi, 2010).

The law in America demands that companies with over 100 permanent staff should have insurance cover for their employees. Failing to have this can attract penalties and make the employer pay fines to the federal government. The employers have to ensure that the coverage meets certain minimum requirements to avoid penalties. In some cases, states such as California can allow companies with over 100 employees buy insurance through state based health insurance Market place. The affordable care acts demands that employees in small businesses also get insurance cover. The groups with 2 to 50 employees can get covered by UnitedHealth Care (RAND Corporation, 2010). They offer the services at reduced costs and help the employees understand insurance and the affordable care act.

Many people who are unemployed in California are able to get insurance cover through Market place based on your savings and size of the household. Based on your income unemployed persons can qualify for a market place insurance plan, Medicaid and Children’s health insurance program. Part time, seasonal and temporary employees can be covered by Medicaid. They need to fill in the forms that specify their income and the size of their household. Their children can be covered by the Children’s Health Insurance Program. The unemployed and the college students can all fit in the Medicaid and CHIP program.

It is evident that the Affordable Care Act or the Obamacare, has bore real fruits in America. Basically, every individual will find where to fit so far as health care costs is concerned and provided one is an America. There is provision of affordable Health care for all Americans. All that is necessary is the understanding the provisions of the law and knowing where you belong (Eibner, Hussey, & Girosi, 2010). There is provision of affordable health care for all categories of people including the aged, the unemployed, the low income earners and even people with preconditions. The Obama care has revolutionized health care services in USA.

The above mentioned groups can make contributions to the health care provision depending on their category. Individuals over 65 can make contributions because some of them have savings from their previous employers or at least still have some income. The unemployed may not have any income and subjecting them to make such payments would make them worse off (Blumenthal, 2006). Those who are completely unable to pay should not pay, while those who have some income can make payments to make them own the program.

References

Baicker K, & Chandra A. (2008). Myths and Misconceptions about U.S. Health Insurance. Health Affairs, 27(6), w533-43. Retrieved from ProQuest on 11/21/2012.

Blumenthal D. (2006). Employer-Sponsored Health Insurance in the United States – Origins and Implications. New England Medical Journal, 355(1), 82-88. Retrieved from ProQuest on 11/21/2012.

Bodenheimer, T. (2005). High and Rising Health Care Costs. Part 1:

Seeking an Explanation. Annals of Internal Medicine, 142 (10), 847-854. Available at: http://annals.org/article.aspx?articleid=718406

Choudhry, N., Rosenthal, M. & Milstein, A. (2010). Assessing the Evidence for Value-Based Insurance Design. Health Affairs, 29 (11), 1988-1994. Retrieved from ProQuest on 11/21/2012.

Claxton, G. (2008). How Private Health Care Coverage Works: A Primer. A Henry J. Kaiser Family Foundation Report. Available at http://www.kff.org/insurance/upload/7766.pdf (Retrieved 11/21/2012)

Eibner, C., Hussey, P., & Girosi, F. (2010) The Effects of the Affordable Care Act on Workers’ Health Insurance Coverage. New England Journal of Medicine, 363 (15), 1393-1395. Available at http://healthpolicyandreform.nejm.org/?p=12339 (Retrieved 11/21/2012)

RAND Corporation. (2010). US Health Care Today: Coverage. Available at http://www.randcompare.org/us-health-care-today/coverage#current-levels-of-coverage (Retrieved 11/21/2012)

Required Website

Kaiser Family Foundation (2009). Health Insurance and Access to Health Care: the Evidence. Available at: http://kff.org/interactive/health-insurance-and-access-to-health-care-tutorial/