Health Care Policy

Health Care Policy

The debate over access to health care in the United States concerns whether or not the government should provide universal health care.

Background

Health care policy can be defined as the decisions, plans, and actions that are undertaken to achieve specific health care goals within a society. According to the World Health Organization (WHO), an explicit health policy achieves several things: it defines a vision for the future; it outlines priorities and the expected roles of different groups; and it builds consensus and informs people.

In many countries individuals must pay for health care directly out-of-pocket in order to gain access to health care goods and services. Individuals of these countries also have to pay private sector players in the medical and pharmaceutical industries to develop research. The planning and production of health human resources is distributed among labor market participants.

Health care in the United States is provided by many different organizations. Health care facilities are largely owned and operated by private sector businesses. The government primarily provides health insurance for public sector employees. 60-65 percent of healthcare provisions and spending comes from programs such as Medicare, Medicaid, TRICARE, the Children's Health Insurance Program, and the Veterans Health Administration. Most of the population under 65 is insured by his/her or a family member's employer, some buy health insurance on their own, and the remainder are uninsured.

The current active debate about health care reform in the United States concerns questions of a right to health care, access, fairness, efficiency, cost, choice, value, and quality. Some have argued that the system does not deliver equivalent value for the money spent. The United States pays twice as much for health care, yet lags behind other wealthy nations in measures such as infant mortality and life expectancy. In fact, the United States has a higher infant mortality rate than most of the world's industrialized nations.

The Role of Government in the Health Care Market

Numerous publicly funded health care programs help provide for the elderly, disabled, military service families, veterans, children, and the poor. Additionally, the federal law ensures public access to emergency services regardless of the ability to pay. However, a system of universal health care has not been implemented nation-wide. Nevertheless, as the Organization for Economic Co-operation and Development (OECD) has pointed out, the total U.S. public expenditure for this limited population would, in most other OECD countries, be enough for the government to provide primary health insurance for the entire population. Although the federal Medicare program and the federal-state Medicaid programs possess some monopolistic purchasing power, the highly fragmented buying side of the U.S. health system is relatively weak by international standards, and in some areas, some suppliers such as large hospital groups have a virtual monopoly on the supply side. In most OECD countries, there is a high degree of public ownership and public finance. The resulting economy of scale in providing health care services appears to enable a much tighter grip on costs. The United States, as a matter of oft-stated public policy, largely does not regulate prices of services from private providers, assuming the private sector could do it better.

Examples of Health Care Reform

Massachusetts has adopted a universal health care system through the Massachusetts 2006 Health Reform Statute. It mandates that all residents who can afford to purchase health insurance must do so, and it provides subsidized insurance plans so that nearly everyone can afford health insurance. The law also provides a "Health Safety Net Fund" to pay for necessary treatment for those who cannot find affordable health insurance or for those who are not eligible. In July 2009, Connecticut similarly passed a law called SustiNet, with the goal of achieving health-care coverage for 98 percent of its residents by 2014.

Advocates for single-payer health care often point to other countries, where national government-funded systems produce better health outcomes at a lower cost. A single-payer universal health care plan for an entire population can be financed from a pool to which many parties such as employees, employers, and the state have contributed. Opponents deride this type of system as socialized medicine, and it has not been one of the favored reform options by Congress or the President in both the Clinton and Obama reform efforts. It has been pointed out that socialized medicine is a system in which the government owns the means of providing medicine. Britain's health care system is an example of this socialized system, along with the Veterans Health Administration program in America. Medicare is an example of a mostly single-payer system, as is France's system. Both of these systems have private insurers to choose from, but the government is the dominant purchaser.

Medicaid and Medicare

Medicaid is a health program for people and families with low incomes and Medicare is for people over 65 and disabled.

Background

Medicaid is the United States' health program for qualified individuals and families with low incomes and resources. It is a means-tested program that is jointly funded by the states and federal government; however, it is managed by the states. Medicaid serves people who are U.S. citizens or legal permanent residents, including low-income adults, their children, and people with certain disabilities. Poverty alone does not necessarily qualify someone for Medicaid. Medicaid is the largest source of funding for medical and health-related services for people with limited incomes in the United States.

Medicare is a national social insurance program, administered by the U.S. federal government since 1965. It guarantees access to health insurance for Americans ages 65 and older in addition to younger people with disabilities and people with advanced renal disease. Medicare has a different social role from for-profit private insurers, which manage their risk portfolio to maximize profitability by denying coverage to those they anticipate will need it. As a social insurance program, Medicare spreads the financial risk associated with illness across society in order to protect everyone. In 2008, the U.S. Federal Government spent $391,266,000,000 on Medicare.

Features

Beginning in the 1990's, many states received waivers from the federal government to create Medicaid managed care programs. Under managed care, Medicaid recipients are enrolled in a private health plan, which receives a fixed monthly premium from the state. The health plan is then responsible for providing for all or most of the recipient's healthcare needs. Today, all but a few states use managed care to provide coverage to a significant proportion of Medicaid enrollees. Nationwide, roughly 60% of enrollees are enrolled in managed care plans. Core eligibility groups of poor children and parents are most likely to be enrolled in managed care, while the elderly and disabled eligibility groups more often remain in traditional "fee for service" Medicaid.

Some states operate a program known as the Health Insurance Premium Payment Program (HIPP). This program allows a Medicaid recipient to have private health insurance paid for by Medicaid. As of 2008, only a few states had premium assistance programs and enrollment was relatively low. However, interest in this approach remained high.

Medicare Advantage plans are required to offer coverage that meets or exceeds the standards set by the original Medicare program, but they do not have to cover every benefit in the same way. If a plan chooses to pay less than Medicare for some benefits, like skilled nursing facility care, the savings may be passed along to consumers by offering lower co-payments for doctor visits. Medicare Advantage plans use a portion of the payments they receive from the government for each enrollee to offer supplemental benefits. All plans limit their members' annual out-of-pocket spending on medical care, with a yearly limit of $6,700. Some plans offer dental coverage, vision coverage, and other services not covered by Medicare Parts A or B. These plans are a good value for the health care dollar, if an individual wants to use the provider included in the plan's network.

Comparing Medicare and Medicaid

Unlike Medicare, which is solely a federal program, Medicaid is a joint federal-state program. Each state operates its own Medicaid system, but this system must conform to federal guidelines in order for the state to receive matching funds and grants. The matching rate provided to states is determined using a federal matching formula (called Federal Medical Assistance Percentages), which generates payment rates that vary from state to state, depending on each state's respective per capita income. The wealthiest states only receive a federal match of 50% while poorer states receive a larger match.

Medicaid funding has become a major budgetary issue for many states over the last few years. On average, states spend 16.8% of their general funds on the program. If the federal match expenditure is also counted, the program usually takes up 22% of each state's budget.

Medicare is a earned entitlement. Entitlement is most commonly based on a record of contributions to the Medicare fund. As a result, it is a form of social insurance that makes it feasible for people to pay for insurance for sickness in old age. They contribute to the fund when they are young and able to work. Medicare offers assurance that contributing individuals will receive benefits when they are older and no longer working. Some people will pay in more than they receive back and others will get back more than they paid in, but this is the practice with any form of insurance, public or private.

Universal Coverage

Universal healthcare coverage provides healthcare and financial protection to all citizens; however the United States has not adopted it.

Background

Universal healthcare--sometimes referred to as universal health coverage, universal coverage, universal care, or social health protection--usually refers to a healthcare system that provides healthcare and financial protection to all citizens. It is organized to provide a specified package of benefits to all members of a society with the end goal of providing financial risk protection, improved access to health services, and improved health outcomes. Universal healthcare is not a one-size-fits-all concept, nor does it imply unlimited coverage for all people. Three critical dimensions can determine universal healthcare: who is covered, what services are covered, and how much of the cost is covered.

Universal healthcare systems vary according to the extent of government involvement in providing care and/or health insurance. In some countries, such as the United Kingdom, Spain, Italy, and the Nordic countries, the government has a high degree of involvement in the commissioning and delivery of healthcare services. In these countries, access is based on residence rights, and not on the purchase of insurance. Other countries have a much more pluralistic delivery system of obligatory health insurance, with contributory rates based on salaries or income and usually funded jointly by employers and beneficiaries. Sometimes the healthcare funds are derived from a combination of insurance premiums, salary-based mandatory contributions by employees and/or employers to regulated sickness funds, and by government taxes.

Proponents of Universal Healthcare in the United States

Proponents of healthcare reforms that call for the expansion of government involvement in order to achieve universal healthcare argue that the need to provide profits to investors in a predominantly free-market health system, and the additional administrative spending, tends to drive up costs and lead to more expensive healthcare.

According to economist and former US Secretary of Labor, Robert Reich, only a "big, national, public option" can force insurance companies to cooperate, share information, and reduce costs. Scattered, localized, "insurance cooperatives" are too small to do that and are "designed to fail" by the moneyed forces opposing Democratic healthcare reform.

The United States has instead adopted a single-payer system for healthcare. The term "single-payer healthcare" is used in the United States to describe a funding mechanism meeting the costs of medical care from a single fund. Although the fund holder is usually the government, some forms of single-payer employ a public-private system.

Health Care Reform Under Obama

There have been many changes in healthcare reform, but as of 2012, President Obama has introduced some of the most controversial changes.

Background

In March 2010, President Obama gave a speech at a rally in Pennsylvania explaining the necessity of health insurance reform. The speech called on Congress to hold a final up or down vote on reform. As of 2012, the legislation remains controversial, with some states challenging it in federal court. There has also been opposition from some voters. In June 2012, in a 5–4 decision, the U.S. Supreme Court found the law to be constitutional.

Expanding Medicaid and Subsidizing Insurance

The law includes health-related provisions that take effect over several years. The law intends to expand Medicaid eligibility for people making up to 133% of the federal poverty level (FPL). It would subsidize insurance premiums for people making up to 400% of the FPL ($88,000 for family of 4 in 2010) so their maximum "out-of-pocket" payment for annual premiums would be on sliding scale from 2% to 9.5% of income. The law also intends to provide incentives for businesses to offer health care benefits, prohibit denial of coverage and denial of claims based on pre-existing conditions, establish health insurance exchanges, prohibit insurers from establishing annual coverage caps, and provide support for medical research.

Guaranteed Issue, Community Rating, Individual Mandate

Starting in 2014, the law will prohibit insurers from denying coverage (see guaranteed issue) to sicker applicants or imposing special conditions such as higher premiums or payments (see community rating). Health care expenditures are highly concentrated with the most expensive 5% of the population accounting for half of aggregate health care spending. The bottom 50% of spenders account for only 3% of health care spending. This means that what insurance companies gain from avoiding the sick greatly outweighs any possible gains from managing their care. As a result, insurers devoted resources to such avoidance at a direct cost to effective care management, which is against the interests of the insured. Instead of providing health security, the health insurance industry had, since the 1970's, begun to compete by becoming risk differentiators. They sought to only insure people with good or normal health profiles and exclude those considered to be or likely to become unhealthy and therefore less profitable. According to a study from Cambridge Hospital, Harvard Law School, and Ohio University, 62% of all 2007 personal bankruptcies in the United States were driven by medical incidents, with (75% having had) health insurance.

Also beginning in 2014, the law will generally require uninsured individuals to buy government-approved health insurance — the individual mandate. Government-run exchanges may present information to facilitate comparison among competing plans, if available, but previous attempts at creating similar exchanges only produced mixed results. This requirement is expected to reduce the number of the uninsured from 19% of all residents in 2010 to 8% by 2016. Some analysts believe that the 8% figure of uninsured are expected to be mostly illegal immigrants (5%), with the rest paying the fine unless exempted. Whether or not this is true remains unclear based on the present available data.

Some analysts have argued that the insurance premium structure may shift more costs onto younger and healthier people. Approximately $43 billion was spent in 2008 providing non-reimbursed emergency services for the uninsured, which the Act's supporters argued increased the average family's insurance premiums. Other studies claim the opposite that the argument for reduced ER visits has been shown to be largely a canard [...] insuring the uninsured will lead to, very approximately, a doubling of health expenditures for the currently uninsured. The studies suggest that making insurance mandatory rather than voluntary will tend to bring younger, healthier people into the insurance pool, shifting the cost of the Act's increased spending onto them.

Public Health

The role of public health is to improve the quality of society by protecting people from disease.

Background

The dramatic increase in the average life span during the 20^th century is widely credited to public health achievements, such as vaccination programs and control of many infectious diseases including polio, diphtheria, yellow fever, and smallpox; effective health and safety policies such as road traffic safety and occupational safety; improved family planning; tobacco control measures; and programs designed to decrease non-communicable diseases by acting on known risk factors such as a person's background, lifestyle and environment.

One of the major sources of the increase in average life span in the early 20^th century was the decline in the urban penalty brought on by improvements in sanitation. These improvements included chlorination of drinking water, filtration, and sewage treatment, which led to the decline in deaths caused by infectious waterborne diseases such as cholera and intestinal diseases. Cutler and Miller in "The Role of Public Health Improvements in Health Advances" demonstrate how typhoid fever deaths in Chicago, Baltimore, Cincinnati, and Cleveland declined after these American cities adopted chlorination, filtration, and sewage treatment.

Since the 1980s, the growing field of population health has broadened the focus of public health from individual behaviors and risk factors to population-level issues such as inequality, poverty, and education. Modern public health is often concerned with addressing determinants of health across a population. There is recognition that our health is affected by many factors including where we live, genetics, income, education and social relationships - these are known as the social determinants of health. A social gradient in health runs through society, with those who are poorest generally suffering poor health. However even those in the middle classes will generally have poorer health than those of a higher social stratum. Newer public health policies seeks to address these health inequalities by advocating for population-based policies that improve health in an equitable manner.

Additionally, with the onset of the epidemiological transition and as the prevalence of infectious diseases decreased through the 20^th century, the focus of public health has recently turned to chronic diseases such as cancer and heart disease.

Public Health and the Government

Public health plays an important role in disease prevention efforts in both the developing world and in developed countries, through local health systems and non-governmental organizations. The World Health Organization (WHO) is the international agency that coordinates and acts on global public health issues. Most countries have their own government public health agencies, sometimes known as ministries of health, to respond to domestic health issues. For example in the United States, the front line of public health initiatives is state and local health departments. The United States Public Health Service (PHS), led by the Surgeon General of the United States, and the Centers for Disease Control and Prevention, headquartered in Atlanta, are involved with several international health activities, in addition to their national duties. In Canada, the Public Health Agency of Canada is the national agency responsible for public health, emergency preparedness and response, and infectious and chronic disease control and prevention. The public health system in India is managed by the Ministry of Health & Family Welfare of the government of India with state owned health care facilities.