Supplimental coverage for insurance

Private insurers offer a variety of supplemental coverages in both the group and individual markets. These are not designed to provide the primary source of medical or disability protection for an individual, but can assist with unexpected expenses and provide additional peace of mind for insureds. Supplemental coverages include Medicare supplement insurance, hospital indemnity insurance, dental insurance, vision insurance, accidental death and dismemberment insurance and specified disease insurance.

Supplemental coverages are intended to:

• Supplement a primary medical expense plan by paying for expenses that are excluded or subject to the primary plan's cost-sharing requirements (e.g., co-payments, deductibles, etc.);
• Cover related expenses such as dental or vision care;
• Assist with additional expenses that may be associated with a serious illness or injury.

Medicare Supplement Coverage (Medigap)

Main article: Medigap

Medicare Supplement policies are designed to cover expenses not covered (or only partially covered) by the "original Medicare" (Parts A & B) fee-for-service benefits. They are only available to individuals enrolled in Medicare Parts A & B. Medigap plans may be purchased on a guaranteed issue basis (no health questions asked) during a six-month open enrollment period when an individual first becomes eligible for Medicare. The benefits offered by Medigap plans are standardized.

Hospital indemnity insurance

Hospital indemnity insurance provides a fixed daily, weekly or monthly benefit while the insured is confined in a hospital. The payment is not dependent on actual hospital charges, and is most commonly expressed as a flat dollar amount. Hospital indemnity benefits are paid in addition to any other benefits that may be available, and are typically used to pay out-of-pocket and non-covered expenses associated with the primary medical plan, and to help with additional expenses (e.g., child care) incurred while in the hospital.

Scheduled health insurance plan

Scheduled health insurance plans are an expanded form of Hospital Indemnity plans. In recent years, these plans have taken the name mini-med plans or association plans. These plans may provide benefits for hospitalization, surgical, and physician services. However, they are not meant to replace a traditional comprehensive health insurance plan. Scheduled health insurance plans are more of a basic policy providing access to day-to-day health care such as going to the doctor or getting a prescription drug, but these benefits will be limited and are not meant to be effective for catastrophic events. Payments are based upon the plan's "schedule of benefits" and are usually paid directly to the service provider. These plans cost much less than comprehensive health insurance. Annual benefit maximums for a typical scheduled health insurance plan may range from $1,000 to $25,000.^[120]

Dental insurance[edit]

Main article: Dental insurance

Dental insurance helps pay for the cost of necessary dental care. Few medical expense plans include coverage for dental expenses. About 97% of dental benefits in the United States is provided through separate policies from carriers—both stand-alone and medical affiliates—that specialize in this coverage. Typically, these dental plans offer comprehensive preventive benefits. However, major dental expenses, such as crowns and root canals, are just partially covered. Also, most carriers offer a lower rate if you select a plan that utilizes their Network providers. Discount dental programs are also available. These do not constitute insurance, but provide participants with access to discounted fees for dental work.

Vision care insurance

Main article: Vision insurance

Vision care insurance provides coverage for routine eye care and is typically written to complement other medical benefits. Vision benefits are designed to encourage routine eye examinations and ensure that appropriate treatment is provided.

Specified disease

Main article: Critical illness insurance

Specified disease provides benefits for one or more specifically identified conditions. Benefits can be used to fill gaps in a primary medical plan, such as co-payments and deductibles, or to assist with additional expenses such as transportation and child care costs.

Accidental death and dismemberment insurance[edit]

Main article: Accidental death and dismemberment insurance

AD&D insurance is offered by group insurers and provides benefits in the event of accidental death. It also provides benefits for certain specified types of bodily injuries (e.g., loss of a limb or loss of sight) when they are the direct result of an accident.

• Insurance companies have high administrative costs.Private health insurers are a significant portion of the U.S. economy directly employing (in 2004) almost 470,000 people at an average salary of $61,409.

• Health insurance companies are not actually providing traditional insurance, which involves the pooling of risk, because the vast majority of purchasers actually do face the harms that they are "insuring" against. Instead, as Edward Beiser and Jacob Appel have separately argued, health insurers are better thought of as low-risk money managers who pocket the interest on what are really long-term healthcare savings accounts.

• According to a study by a pro-health reform group published February 11, the nation's largest five health insurance companies posted a 56 percent gain in 2009 profits over 2008. The insurers (Wellpoint, UnitedHealth, Cigna, Aetna and Humana) cover the majority of Americans with health insurance.

Other types of health insurance (non-medical)

While the term "health insurance" is most commonly used by the public to describe coverage for medical expenses, the insurance industry uses the term more broadly to include other related forms of coverage, such as disability income and long-term care insurance.

Disability income insurance

Main article: Disability insurance

Disability income (DI) insurance pays benefits to individuals who lose their ability to work due to injury or illness. DI insurance replaces income lost while the policyholder is unable to work during a period of disability (in contrast to medical expense insurance, which pays for the cost of medical care). For most working age adults, the risk of disability is greater than the risk of premature death, and the resulting reduction in lifetime earnings can be significant. Private disability insurance is sold on both a group and an individual basis. Policies may be designed to cover long-term disabilities (LTD coverage) or short-term disabilities (STD coverage). Business owners can also purchase disability overhead insurance to cover the overhead expenses of their business while they are unable to work.

A basic level of disability income protection is provided through the Social Security Disability Insurance (SSDI) program for qualified workers who are totally and permanently disabled (the worker is incapable of engaging in any "substantial gainful work" and the disability is expected to last at least 12 months or result in death).

Long-term care insurance[edit]

Main article: Long term care insurance

Long-term care (LTC) insurance reimburses the policyholder for the cost of long-term or custodial care services designed to minimize or compensate for the loss of functioning due to age, disability or chronic illness.^[118] LTC has many surface similarities to long-term disability insurance. There are at least two fundamental differences, however. LTC policies cover the cost of certain types of chronic care, while long-term-disability policies replace income lost while the policyholder is unable to work. For LTC, the event triggering benefits is the need for chronic care, while the triggering event for disability insurance is the inability to work .Priivate LTC insurance is growing in popularity in the US. Premiums have remained relatively stable in recent years. However, the coverage is quite expensive, especially when consumers wait until retirement age to purchase it. The average age of new purchasers was 61 in 2005, and has been dropping.

Supplemental coverage

Private insurers offer a variety of supplemental coverages in both the group and individual markets. These are not designed to provide the primary source of medical or disability protection for an individual, but can assist with unexpected expenses and provide additional peace of mind for insureds. Supplemental coverages include Medicare supplement insurance, hospital indemnity insurance, dental insurance, vision insurance, accidental death and dismemberment insurance and specified disease insurance.

Supplemental coverages are intended to:

• Supplement a primary medical expense plan by paying for expenses that are excluded or subject to the primary plan's cost-sharing requirements (e.g., co-payments, deductibles, etc.);
• Cover related expenses such as dental or vision care;
• Assist with additional expenses that may be associated with a serious illness or injury.

Health care markets and pricing

The US health insurance market is highly concentrated, as leading insurers have carried out over 400 mergers from the mid-1990s to the mid-2000s (decade). In 2000, the two largest health insurers (Aetna and UnitedHealth Group) had total membership of 32 million. By 2006 the top two insurers, WellPoint and UnitedHealth, had total membership of 67 million. The two companies together had more than 36% of the national market for commercial health insurance. The AMA has said that it "has long been concerned about the impact of consolidated markets on patient care." A 2007 AMA study found that in 299 of the 313 markets surveyed, one health plan accounted for at least 30% of the combined health maintenance organization (HMO)/preferred provider organization (PPO) market. In 90% of markets, the largest insurer controls at least 30% of the market, and the largest insurer controls more than 50% of the market in 54% of metropolitan areas The US Department of Justice has recognized this percentage of market control as conferring substantial monopsony power in the relations between insurer and physicians.^[109]

Most provider markets (especially hospitals) are also highly concentrated, - roughly 80%, according to criteria established by the FTC and Department of Justice^[110] - so insurers usually have little choice about which providers to include in their networks, and consequently little leverage to control the prices they pay. Large insurers frequently negotiate most-favored nation clauses with providers, agreeing to raise rates significantly while guaranteeing that providers will charge other insurers higher rates.^[111]

According to some experts, such as Uwe Reinhardt,^[112] Sherry Glied, Megan Laugensen,^[113] Michael Porter, and Elizabeth Teisberg,^[114] this pricing system is highly inefficient and is a major cause of rising health care costs. Health care costs in the United States vary enormously between plans and geographical regions, even when input costs are fairly similar, and rise very quickly. Health care costs have risen faster than economic growth at least since the 1970s. Public health insurance programs typically have more bargaining power as a result of their greater size and typically pay less for medical services than private plans, leading to slower cost growth, but the overall trend in health care prices have led public programs’ costs to grow at an rapid pace as well.

New types of medical plans

In recent years, various new types of medical plans have been introduced.

High-deductible health plan (HDHP)

Plans with much higher deductibles than traditional health plans – primarily providing coverage for catastrophic illness – have been introduced. Because of the high deductible, these provide little coverage for everyday expenses – and thus have potentially high out-of-pocket expenses – but do cover major expenses. Couple with these are various forms of savings plans.

Tax-preferenced health care spending account

Coupled with high-deductible plans are various tax-advantaged savings plans – funds (such as salary) can be placed in a savings plan, and then go to pay the out-of-pocket expenses. This approach to addressing increasing premiums is dubbed "consumer driven health care", and received a boost in 2003, when President George W. Bush signed into law the Medicare Prescription Drug, Improvement, and Modernization Act. The law created tax-deductible Health Savings Accounts (HSAs), untaxed private bank accounts for medical expenses, which can be established by those who already have health insurance. Withdrawals from HSAs are only penalized if the money is spent on non-medical items or services. Funds can be used to pay for qualified expenses, including doctor's fees, Medicare Parts A and B, and drugs, without being taxed.

Consumers wishing to deposit pre-tax funds in an HSA must be enrolled in a high-deductible insurance plan (HDHP) with a number of restrictions on benefit design; in 2007, qualifying plans must have a minimum deductible of US$1,050. Currently, the minimum deductible has risen to $1.200 for individuals and $2,400 for families. HSAs enable healthier individuals to pay less for insurance and deposit money for their own future health care, dental and vision expenses.

HSAs are one form of tax-preferenced health care spending accounts. Others include Flexible Spending Accounts (FSAs), Archer Medical Savings Accounts (MSAs), which have been superseded by the new HSAs (although existing MSAs are grandfathered), and Health Reimbursement Accounts (HRAs). These accounts are most commonly used as part of an employee health benefit package. While there are currently no government-imposed limits to FSAs, legislation currently being reconciled between the House of Representatives and Senate would impose a cap of $2,500. While both the House and Senate bills would adjust the cap to inflation, approximately 7 million Americans who use their FSAs to cover out-of-pocket health care expenses greater than $2,500 would be forced to pay higher taxes and health care costs.

In July 2009, Save Flexible Spending Plans, a national grassroots advocacy organization, was formed to protect against the restricted use of FSAs in health care reform efforts, Save Flexible Spending Accounts is sponsored by the Employers Council on Flexible Compensation (ECFC), a non-profit organization “dedicated to the maintenance and expansion of the private employee benefits on a tax-advantaged basis”. ECFC members include companies such as WageWorks Inc., a benefits provider based in San Mateo, California.

Most FSA participants are middle income Americans, earning approximately $55,000 annually.Individuals and families with chronic illnesses typically receive the most benefit from FSAs; even when insured, they incur annual out-of-pocket expenses averaging $4,398 .Approximately 44 percent of Americans have one or more chronic conditions .

Limited benefit plan                                                                          

Opposite to high-deductible plans are plans which provide limited benefits – up to a low level – have also been introduced. These limited medical benefit plans pay for routine care and do not pay for catastrophic care, they do not provide equivalent financial security to a major medical plan. Annual benefit limits can be as low as $2,000. Lifetime maximums can be very low as well.

Discount medical card

One option that is becoming more popular is the discount medical card. These cards are not insurance policies, but provide access to discounts from participating health care providers. While some offer a degree of value, there are serious potential drawbacks for the consumer.

Types of medical insurance

Traditional indemnity or fee-for-service

Early hospital and medical plans offered by insurance companies paid either a fixed amount for specific diseases or medical procedures (schedule benefits) or a percentage of the provider's fee. The relationship between the patient and the medical provider was not changed. The patient received medical care and was responsible for paying the provider. If the service was covered by the policy, the insurance company was responsible for reimbursing or indemnifying the patient based on the provisions of the insurance contract ("reimbursement benefits"). Health insurance plans that are not based on a network of contracted providers, or that base payments on a percentage of provider charges, are still described as indemnity or fee-for-service plans.

Blue Cross Blue Shield Association

The Blue Cross and Blue Shield Association (BCBSA) is a federation of 38 separate health insurance organizations and companies in the United States. Combined, they directly or indirectly provide health insurance to over 100 million Americans. BCBSA insurance companies are franchisees, independent of the association (and traditionally each other), offering insurance plans within defined regions under one or both of the association's brands. Blue Cross Blue Shield insurers offer some form of health insurance coverage in every U.S. state. They also act as administrators of Medicare in many states or regions of the U.S., and provide coverage to state government employees as well as to the federal government employees under a nationwide option of the Federal Employees Health Benefit Plan.

Health Maintenance Organizations

A health maintenance organization (HMO) is a type of managed care organization (MCO) that provides a form of health care coverage that is fulfilled through hospitals, doctors, and other providers with which the HMO has a contract. The Health Maintenance Organization Act of 1973 required employers with 25 or more employees to offer federally certified HMO options. Unlike traditionalindemnity insurance, an HMO covers only care rendered by those doctors and other professionals who have agreed to treat patients in accordance with the HMO's guidelines and restrictions in exchange for a steady stream of customers. Benefits are provided through a network of providers. Providers may be employees of the HMO ("staff model"), employees of a provider group that has contracted with the HMO ("group model"), or members of an independent practice association ("IPA model"). HMOs may also use a combination of these approaches ("network model").

Managed care

The term managed care is used to describe a variety of techniques intended to reduce the cost of health benefits and improve the quality of care. It is also used to describe organizations that use these techniques ("managed care organization").Many of these techniques were pioneered by HMOs, but they are now used in a wide variety of private health insurance programs. Through the 1990s, managed care grew from about 25% US employees with employer-sponsored coverage to the vast majority.

Rise of managed care in the US

Year	Conventional plans	HMOs	PPOs	POS plans	HDHP/SOs
1998	14%	27%	35%	24%	~
1999	10%	28%	39%	24%	~
2000	8%	29%	42%	21%	~
2001	7%	24%	46%	23%	~
2002	4%	27%	52%	18%	~
2003	5%	24%	54%	17%	~
2004	5%	25%	55%	15%	~
2005	3%	21%	61%	15%	~
2006	3%	20%	60%	13%	4%
2007	3%	21%	57%	15%	5%
2008	2%	20%	58%	12%	8%

Network-based managed care

Many managed care programs are based on a panel or network of contracted health care providers. Such programs typically include:

• A set of selected providers that furnish a comprehensive array of health care services to enrollees;
• Explicit standards for selecting providers;
• Formal utilization review and quality improvement programs;
• An emphasis on preventive care; and
• Financial incentives to encourage enrollees to use care efficiently.

Provider networks can be used to reduce costs by negotiating favorable fees from providers, selecting cost effective providers, and creating financial incentives for providers to practice more efficiently.A survey issued in 2009 by America's Health Insurance Plans found that patients going to out-of-network providers are sometimes charged extremely high fees.                                             

Network-based plans may be either closed or open. With a closed network, enrollees' expenses are generally only covered when they go to network providers. Only limited services are covered outside the network—typically only emergency and out-of-area care. Most traditional HMOs were closed network plans. Open network plans provide some coverage when an enrollee uses non-network provider, generally at a lower benefit level to encourage the use of network providers. Most preferred provider organization plans are open-network (those that are not are often described as exclusive provider organizations, or EPOs), as are point of service (POS) plans.

The terms "open panel" and "closed panel" are sometimes used to describe which health care providers in a community have the opportunity to participate in a plan. In a "closed panel" HMO, the network providers are either HMO employees (staff model) or members of large group practices with which the HMO has a contract. In an "open panel" plan the HMO or PPO contracts with independent practitioners, opening participation in the network to any provider in the community that meets the plan's credential requirements and is willing to accept the terms of the plan's contract.

Other managed care techniques

Other managed care techniques include such elements as disease management, case management, wellness incentives, patient education, utilization management and utilization review. These techniques can be applied to both network-based benefit programs and benefit programs that are not based on a provider network. The use of managed care techniques without a provider network is sometimes described as "managed indemnity."

Blurring lines

Over time, the operations of many Blue Cross and Blue Shield operations have become more similar to those of commercial health insurance companies. However, some Blue Cross and Blue Shield plans continue to serve as insurers of last resort. Similarly, the benefits offered by Blues plans, commercial insurers, and HMOs are converging in many respects due to market pressures. One example is the convergence of preferred provider organization (PPO) plans offered by Blues and commercial insurers and the point of service plans offered by HMOs. Historically, commercial insurers, Blue Cross and Blue Shield plans, and HMOs might be subject to different regulatory oversight in a state (e.g., the Department of Insurance for insurance companies, versus the Department of Health for HMOs). Today, it is common for commercial insurance companies to have HMOs as subsidiaries, and for HMOs to have insurers as subsidiaries (the state license for an HMO is typically different from that for an insurance company). At one time the distinctions between traditional indemnity insurance, HMOs and PPOs were very clear; today, it can be difficult to distinguish between the products offered by the various types of organization operating in the market.

The blurring of distinctions between the different types of health care coverage can be seen in the history of the industry's trade associations. The two primary HMO trade associations were the Group Health Association of America and the American Managed Care and Review Association. After merging, they were known as American Association of Health Plans (AAHP). The primary trade association for commercial health insurers was the Health Insurance Association of America (HIAA). These two have now merged, and are known as America’s Health Insurance Plans(AHIP).

The rise of employer-sponsored insurance coverage

Employer-sponsored health insurance plans dramatically expanded as a direct result of wage controls imposed by the federal government during World War II. The labor market was tight because of the increased demand for goods and decreased supply of workers during the war. Federally imposed wage and price controls prohibited manufacturers and other employers from raising wages enough to attract workers. When the War Labor Board declared that fringe benefits, such as sick leave and health insurance, did not count as wages for the purpose of wage controls, employers responded with significantly increased offers of fringe benefits, especially health care coverage, to attract workers.

President Harry S. Truman proposed a system of public health insurance in his November 19, 1945, address. He envisioned a national system that would be open to all Americans, but would remain optional. Participants would pay monthly fees into the plan, which would cover the cost of any and all medical expenses that arose in a time of need. The government would pay for the cost of services rendered by any doctor who chose to join the program. In addition, the insurance plan would give a cash balance to the policy holder to replace wages lost due to illness or injury. The proposal was quite popular with the public, but it was fiercely opposed by the Chamber of Commerce, the American Hospital Association, and the AMA, which denounced it as “socialism.

Foreseeing a long and costly political battle, many labor unions chose to campaign for employer-sponsored coverage, which they saw as a less desirable but more achievable goal, and as coverage expanded the national insurance system lost political momentum and ultimately failed to pass. Between 1940 and 1960, the total number of people enrolled in health insurance plans grew seven-fold, from 20,662,000 to 142,334,000, and by 1958, 75% of Americans had some form of health coverage.

Medicare and Medicaid[edit]

The blue line indicates per capita Social Security expenditure (in 2010 dollars), while the red line indicates the percentage of the population aged 65 or older with an income at or below the poverty line.

Still, private insurance remained unaffordable or simply unavailable to many, including the poor, the unemployed, and the elderly. Before 1965, only half of seniors had health care coverage, and they paid three times as much as younger adults, despite having lower incomes. Consequently, interest persisted in creating public health insurance for those left out of the private marketplace.

The 1960 Kerr-Mills Act provided matching funds to states assisting patients with their medical bills. In the early 1960s, Congress rejected a plan to subsidize private coverage for people with Social Security as unworkable, and an amendment to the Social Security Act creating a publicly run alternative was proposed. Finally, President Lyndon B. Johnson signed the Medicare and Medicaid programs into law in 1965, creating publicly run insurance for the elderly and the poor. Medicare was later expanded to cover people with disabilities, end-stage renal disease, and ALS. The program has helped dramatically reduce poverty among seniors since its inception more than 45 years ago, while containing costs more effectively than the private sector.

Towards universal coverage

Persistent lack of insurance among many working Americans continued to create pressure for a comprehensive national health insurance system. In the early 1970s, there was fierce debate between two alternative models for universal coverage. Senator Ted Kennedy proposed a universal single-payer system, while President Nixon countered with his own proposal based on mandates and incentives for employers to provide coverage while expanding publicly run coverage for low-wage workers and the unemployed. Compromise was never reached, and Nixon’s resignation and a series of economic problems later in the decade diverted Congress’s attention away from health reform.

Shortly after his inauguration, President Clinton offered a new proposal for a universal health insurance system. Like Nixon’s plan, Clinton’s relied on mandates, both for individuals and for insurers, along with subsidies for people who could not afford insurance. The bill would have also created “health-purchasing alliances” to pool risk among multiple businesses and large groups of individuals. The plan was staunchly opposed by the insurance industry and employers’ groups and received only mild support from liberal groups, particularly unions, which preferred a single payer system. Ultimately it failed after the Republican takeover of Congress in 1994.

Finally achieving universal health coverage remained a top priority among Democrats, and passing a health reform bill was one of the Obama Administration’s top priorities. The Patient Protection and Affordable Care Act was similar to the Nixon and Clinton plans, mandating coverage, penalizing employers who failed to provide it, and creating mechanisms for people to pool risk and buy insurance collectively. Earlier versions of the bill included a publicly run insurer that could compete to cover those without employer sponsored coverage (the so-called public option), but this was ultimately stripped to secure the support of moderates. The bill passed in March 2010.

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.