Insurance in United States

According to the United States Census Bureau, roughly 55% obtain insurance through an employer, while about 10% purchase it directly. About 31% of Americans were enrolled in a public health insurance program: 14.5% (45 million – although that number has since risen to 48 million) had Medicare, 15.9% (49 million) had Medicaid, and 4.2% (13 million) had military health insurance (there is some overlap, causing percentages to add up to more than 100%). Employers are allowed to pay employees cash in lieu of health insurance, but this is uncommon as it is subject to strict IRS regulations.

Trends in private coverage

The percentage of non-elderly workers with employer-sponsored coverage has been falling, from 68% in 2000 to 61% in 2009, the latest year for which data is available. While the primary cause of falling rates of insurance is the rising cost of health care for employers, the economic downturn since 2008 has swelled the ranks of the uninsured, in large part because workers who lose their jobs also lose employer-sponsored insurance. Over 1 million workers lost their health care coverage in January, February and March 2009. Approximately, 268,400 more workers lost health care coverage in March 2009 than in March 2008, so the decline of employer sponsored insurance has likely accelerated in recent years.

Trends in public coverage

As a smaller and smaller share of the public is covered by private insurance, public insurance has grown more essential. In 2000, 10.5% of the public was covered by Medicaid, while 13.5% had Medicare. By 2010, those figures had risen to 14.5% and 15.9% respectively.

A report published by the Kaiser Family Foundation in April 2008 found that economic downturns dramatically increase the public's reliance on state Medicaid and SCHIP and can cause significant financial strain for the programs. The authors estimated that a 1% increase in the unemployment rate would increase Medicaid and SCHIP enrollment by 1 million, and increase the number uninsured by 1.1 million. State spending on Medicaid and SCHIP would increase by $1.4 billion (total spending on these programs would increase by $3.4 billion). This increased spending would occur at the same time state government revenues were declining. During the last downturn, the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) included federal assistance to states, which helped states avoid tightening their Medicaid and SCHIP eligibility rules. The authors conclude that Congress should consider similar relief for the current economic downturn.Funding for Medicaid and SCHIP was in fact expanded significantly under the 2010 health reform bill.

Status of the uninsured[edit]

The numbers of uninsured Americans and the uninsured rate from 1987 to 2008.

Percentage of people without health insurance coverage by state in 2009 (darker means higher percentage).

Based on self-reported census data, in 2010, more than 49 million people in the US (more than 16% of the population) were without health insurance as defined in the questions asked. The percentage of the non-elderly population who are uninsured has been generally increasing since the year 2000. Among the uninsured population, some 40 million were employment-age adults (ages 18 to 64), and more than 28 million worked at least part-time. About 37% of the uninsured live in households with incomes over $50,000.

According to the Census Bureau, more than 40 million of the uninsured are US citizens. Another 9.7 million are non-citizens, but the Census Bureau does not distinguish in its estimate between documented and undocumented migrants. It has been estimated that nearly one fifth of the uninsured population is able to afford insurance, almost one quarter is eligible for public coverage, and the remaining 56% need financial assistance (8.9% of all Americans). An estimated 5 million of those without health insurance are considered "uninsurable" because of pre-existing conditions.

A 2011 study found that there were 2.1 million hospital stays for uninsured patients, accounting for 4.4 percent ($17.1 billion) of total aggregate inpatient hospital costs in the United States.The costs of treating the uninsured must often be absorbed by providers as charity care, passed on to the insured via cost-shifting and higher health insurance premiums, or paid by taxpayers through higher taxes.

Death

Since people who lack health insurance are unable to obtain timely medical care, they have a 40 percent higher risk of death in any given year than those with health insurance, according to a study published in the American Journal of Public Health. The study estimated that in 2005 in the United States, there were 45,000 deaths associated with lack of health insurance.

A Johns Hopkins Hospital study found that heart transplant complications occurred most often amongst the uninsured, and that patients who had private health plans fared better than those covered by Medicaid or Medicare.

Reform

The Affordable Care Act of 2010 was designed primarily to extend health coverage to those without it by expanding Medicaid, creating financial incentives for employers to offer coverage, and requiring those without employer or public coverage to purchase insurance in newly created state-run health insurance exchanges. The CBO has estimated that roughly 33 million who would have otherwise been uninsured will receive coverage because of the act by 2022.

History

Accident insurance was first offered in the United States by the Franklin Health Assurance Company of Massachusetts. This firm, founded in 1850, offered insurance against injuries arising from railroad and steamboat accidents. Sixty organizations were offering accident insurance in the US by 1866, but the industry consolidated rapidly soon thereafter. While there were earlier experiments, the origins of sickness coverage in the US effectively date from 1890. The first employer-sponsored group disability policy was issued in 1911, but this plan's primary purpose was replacing wages lost due to an inability to work, not medical expenses.

Before the development of medical expense insurance, patients were expected to pay all other health care costs out of their own pockets, under what is known as the fee-for-service business model. During the middle to late 20th century, traditional disability insurance evolved into modern health insurance programs. Today, most comprehensive private health insurance programs cover the cost of routine, preventive, and emergency health care procedures, and also most prescription drugs, but this was not always the case. The rise of private insurance was accompanied by the gradual expansion of public insurance programs for those who could not acquire coverage through the market.

Hospital and medical expense policies were introduced during the first half of the 20th century. During the 1920s, individual hospitals began offering services to individuals on a pre-paid basis, eventually leading to the development of Blue Cross organizations in the 1930s.The first employer-sponsored hospitalization plan was created by teachers in Dallas, Texas in 1929.Because the plan only covered members' expenses at a single hospital, it is also the forerunner of today's health maintenance organizations (HMOs).

In the 1930s, The Roosevelt Administration explored possibilities for creating a national health insurance program, while it was designing the Social Security system. But it abandoned the project because the American Medical Association (AMA) fiercely opposed it, along with all forms of health insurance at that time.