According to the Health Insurance Association of America, health insurance is defined as "coverage that provides for the payments of benefits as a result of sickness or injury. It includes insurance for losses from accident, medical expense, disability, or accidental death and dismemberment" (p. 225).
Background
- A contract between an insurance provider (e.g. an insurance company or a government) and an individual or his/her sponsor (e.g. an employer or a community organization). The contract can be renewable (e.g. annually, monthly) or lifelong in the case of private insurance, or be mandatory for all citizens in the case of national plans. The type and amount of health care costs that will be covered by the health insurance provider are specified in writing, in a member contract or "Evidence of Coverage" booklet for private insurance, or in a national health policy for public insurance.
- (US specific) Provided by an employer-sponsored self-funded ERISA plan. The company generally advertises that they have one of the big insurance companies. However, in an ERISA case, that insurance company "doesn't engage in the act of insurance", they just administer it. Therefore, ERISA plans are not subject to state laws. ERISA plans are governed by federal law under the jurisdiction of the US Department of Labor (USDOL). The specific benefits or coverage details are found in the Summary Plan Description (SPD). An appeal must go through the insurance company, then to the Employer's Plan Fiduciary. If still required, the Fiduciary's decision can be brought to the USDOL to review for ERISA compliance, and then file a lawsuit in federal court.
The individual insured person's obligations may take several forms:
- Premium: The amount the policy-holder or their sponsor (e.g. an employer) pays to the health plan to purchase health coverage.
- Deductible: The amount that the insured must pay out-of-pocket before the health insurer pays its share. For example, policy-holders might have to pay a $500 deductible per year, before any of their health care is covered by the health insurer. It may take several doctor's visits or prescription refills before the insured person reaches the deductible and the insurance company starts to pay for care. Furthermore, most policies do not apply co-pays for doctor's visits or prescriptions against your deductible.
- Co-payment: The amount that the insured person must pay out of pocket before the health insurer pays for a particular visit or service. For example, an insured person might pay a $45 co-payment for a doctor's visit, or to obtain a prescription. A co-payment must be paid each time a particular service is obtained.
- Coinsurance: Instead of, or in addition to, paying a fixed amount up front (a co-payment), the co-insurance is a percentage of the total cost that insured person may also pay. For example, the member might have to pay 20% of the cost of a surgery over and above a co-payment, while the insurance company pays the other 80%. If there is an upper limit on coinsurance, the policy-holder could end up owing very little, or a great deal, depending on the actual costs of the services they obtain.
- Exclusions: Not all services are covered. Billed items like use-and-throw, taxes, etc. are excluded from admissible claim. The insured are generally expected to pay the full cost of non-covered services out of their own pockets.
- Coverage limits: Some health insurance policies only pay for health care up to a certain dollar amount. The insured person may be expected to pay any charges in excess of the health plan's maximum payment for a specific service. In addition, some insurance company schemes have annual or lifetime coverage maxima. In these cases, the health plan will stop payment when they reach the benefit maximum, and the policy-holder must pay all remaining costs.
- Out-of-pocket maximum: Similar to coverage limits, except that in this case, the insured person's payment obligation ends when they reach the out-of-pocket maximum, and health insurance pays all further covered costs. Out-of-pocket maximum can be limited to a specific benefit category (such as prescription drugs) or can apply to all coverage provided during a specific benefit year.
- Capitation: An amount paid by an insurer to a health care provider, for which the provider agrees to treat all members of the insurer.
- In-Network Provider: (U.S. term) A health care provider on a list of providers preselected by the insurer. The insurer will offer discounted coinsurance or co-payments, or additional benefits, to a plan member to see an in-network provider. Generally, providers in network are providers who have a contract with the insurer to accept rates further discounted from the "usual and customary" charges the insurer pays to out-of-network providers.
- Prior Authorization: A certification or authorization that an insurer provides prior to medical service occurring. Obtaining an authorization means that the insurer is obligated to pay for the service, assuming it matches what was authorized. Many smaller, routine services do not require authorization.
- Explanation of Benefits: A document that may be sent by an insurer to a patient explaining what was covered for a medical service, and how payment amount and patient responsibility amount were determined.
Prescription drug plans are a form of insurance offered through some
health insurance plans. In the U.S., the patient usually pays a
copayment and the prescription drug insurance part or all of the balance
for drugs covered in the formulary
of the plan. Such plans are routinely part of national health insurance
programs. For example, in the province of Quebec, Canada, prescription
drug insurance is universally required as part of the public health
insurance plan, but may be purchased and administered either through
private or group plans, or through the public plan.
Some, if not most, health care providers in the United States
will agree to bill the insurance company if patients are willing to sign
an agreement that they will be responsible for the amount that the
insurance company doesn't pay. The insurance company pays out of network
providers according to "reasonable and customary" charges, which may be
less than the provider's usual fee. The provider may also have a
separate contract with the insurer to accept what amounts to a
discounted rate or capitation to the provider's standard charges. It
generally costs the patient less to use an in-network provider.
Comparisons
Health Expenditure per capita (in PPP-adjusted US$) among several OECD member nations. Data source: OECD's iLibrary
The Commonwealth Fund, in its annual survey, "Mirror, Mirror on the
Wall", compares the performance of the health care systems in Australia,
New Zealand, the United Kingdom, Germany, Canada and the U.S. Its 2007
study found that, although the U.S. system is the most expensive, it
consistently under-performs compared to the other countries.
One difference between the U.S. and the other countries in the study is
that the U.S. is the only country without universal health insurance
coverage.
Life
Expectancy of the total population at birth from 2000 until 2011 among
several OECD member nations. Data source: OECD's iLibrary
The Commonwealth Fund completed its thirteenth annual health policy survey in 2010.
A study of the survey "found significant differences in access, cost
burdens, and problems with health insurance that are associated with
insurance design".
Of the countries surveyed, the results indicated that people in the
United States had more out-of-pocket expenses, more disputes with
insurance companies than other countries, and more insurance payments
denied; paperwork was also higher although Germany had similarly high
levels of paperwork.
Australia
The Australian public health system is called Medicare,
which provides free universal access to hospital treatment and
subsidised out-of-hospital medical treatment. It is funded by a 2% tax
levy on all taxpayers, an extra 1% levy on high income earners, as well
as general revenue.
The private health system is funded by a number of private health insurance organizations. The largest of these is Medibank Private Limited, which was, until 2014, a government-owned entity, when it was privatized and listed on the Australian Stock Exchange.
Australian health funds can be either 'for profit' including Bupa and nib; 'mutual' including Australian Unity; or 'non-profit' including GMHBA, HCF
and the HBF Health Fund (HBF). Some, such as Police Health, have
membership restricted to particular groups, but the majority have open
membership. Membership to most health funds is now also available
through comparison websites like moneytime, Compare the Market,
iSelect Ltd., Choosi, ComparingExpert and YouCompare. These comparison
sites operate on a commission-basis by agreement with their
participating health funds. The Private Health Insurance Ombudsman also
operates a free website which allows consumers to search for and compare
private health insurers' products, which includes information on price
and level of cover.
Most aspects of private health insurance in Australia are regulated by the Private Health Insurance Act 2007. Complaints and reporting of the private health industry is carried out by an independent government agency, the Private Health Insurance Ombudsman.
The ombudsman publishes an annual report that outlines the number and
nature of complaints per health fund compared to their market share.
The private health system in Australia operates on a "community
rating" basis, whereby premiums do not vary solely because of a person's
previous medical history, current state of health, or (generally
speaking) their age (but see Lifetime Health Cover below). Balancing
this are waiting periods, in particular for pre-existing conditions
(usually referred to within the industry as PEA, which stands for
"pre-existing ailment"). Funds are entitled to impose a waiting period
of up to 12 months on benefits for any medical condition the signs and
symptoms of which existed during the six months ending on the day the
person first took out insurance. They are also entitled to impose a
12-month waiting period for benefits for treatment relating to an
obstetric condition, and a 2-month waiting period for all other benefits
when a person first takes out private insurance. Funds have the
discretion to reduce or remove such waiting periods in individual cases.
They are also free not to impose them to begin with, but this would
place such a fund at risk of "adverse selection", attracting a
disproportionate number of members from other funds, or from the pool of
intending members who might otherwise have joined other funds. It would
also attract people with existing medical conditions, who might not
otherwise have taken out insurance at all because of the denial of
benefits for 12 months due to the PEA Rule. The benefits paid out for
these conditions would create pressure on premiums for all the fund's
members, causing some to drop their membership, which would lead to
further rises in premiums, and a vicious cycle of higher
premiums-leaving members would ensue.
The Australian government has introduced a number of incentives
to encourage adults to take out private hospital insurance. These
include:
- Lifetime Health Cover: If a person has not taken out private hospital cover by 1 July after their 31st birthday, then when (and if) they do so after this time, their premiums must include a loading of 2% per annum for each year they were without hospital cover. Thus, a person taking out private cover for the first time at age 40 will pay a 20 percent loading. The loading is removed after 10 years of continuous hospital cover. The loading applies only to premiums for hospital cover, not to ancillary (extras) cover.
- Medicare Levy Surcharge: People whose taxable income is
greater than a specified amount (in the 2011/12 financial year $80,000
for singles and $168,000 for couples)
and who do not have an adequate level of private hospital cover must
pay a 1% surcharge on top of the standard 1.5% Medicare Levy. The
rationale is that if the people in this income group are forced to pay
more money one way or another, most would choose to purchase hospital
insurance with it, with the possibility of a benefit in the event that
they need private hospital treatment – rather than pay it in the form of
extra tax as well as having to meet their own private hospital costs.
- The Australian government announced in May 2008 that it proposes to increase the thresholds, to $100,000 for singles and $150,000 for families. These changes require legislative approval. A bill to change the law has been introduced but was not passed by the Senate. An amended version was passed on 16 October 2008. There have been criticisms that the changes will cause many people to drop their private health insurance, causing a further burden on the public hospital system, and a rise in premiums for those who stay with the private system. Other commentators believe the effect will be minimal.
- Private Health Insurance Rebate: The government subsidises the premiums for all private health insurance cover, including hospital and ancillary (extras), by 10%, 20% or 30%, depending on age. The Rudd Government announced in May 2009 that as of July 2010, the Rebate would become means-tested, and offered on a sliding scale. While this move (which would have required legislation) was defeated in the Senate at the time, in early 2011 the Gillard Government announced plans to reintroduce the legislation after the Opposition loses the balance of power in the Senate. The ALP and Greens have long been against the rebate, referring to it as "middle-class welfare".
Canada
As per the Constitution of Canada,
health care is mainly a provincial government responsibility in Canada
(the main exceptions being federal government responsibility for
services provided to aboriginal peoples covered by treaties, the Royal Canadian Mounted Police,
the armed forces, and Members of Parliament). Consequently, each
province administers its own health insurance program. The federal
government influences health insurance by virtue of its fiscal powers –
it transfers cash and tax points to the provinces to help cover the
costs of the universal health insurance programs. Under the Canada Health Act,
the federal government mandates and enforces the requirement that all
people have free access to what are termed "medically necessary
services," defined primarily as care delivered by physicians or in
hospitals, and the nursing component of long-term residential care. If
provinces allow doctors or institutions to charge patients for medically
necessary services, the federal government reduces its payments to the
provinces by the amount of the prohibited charges. Collectively, the
public provincial health insurance systems in Canada are frequently
referred to as Medicare.
This public insurance is tax-funded out of general government revenues,
although British Columbia and Ontario levy a mandatory premium with
flat rates for individuals and families to generate additional revenues -
in essence, a surtax. Private health insurance is allowed, but in six
provincial governments only for services that the public health plans do
not cover (for example, semi-private or private rooms in hospitals and
prescription drug plans). Four provinces allow insurance for services
also mandated by the Canada Health Act, but in practice there is no
market for it. All Canadians are free to use private insurance for
elective medical services such as laser vision correction surgery,
cosmetic surgery, and other non-basic medical procedures. Some 65% of
Canadians have some form of supplementary private health insurance; many
of them receive it through their employers. Private-sector services not paid for by the government account for nearly 30 percent of total health care spending.
In 2005, the Supreme Court of Canada ruled, in Chaoulli v. Quebec,
that the province's prohibition on private insurance for health care
already insured by the provincial plan violated the Quebec Charter of
Rights and Freedoms, and in particular the sections dealing with the right to life and security,
if there were unacceptably long wait times for treatment, as was
alleged in this case. The ruling has not changed the overall pattern of
health insurance across Canada, but has spurred on attempts to tackle
the core issues of supply and demand and the impact of wait times.
France
The national system of health insurance was instituted in 1945, just
after the end of the Second World War. It was a compromise between Gaullist and Communist
representatives in the French parliament. The Conservative Gaullists
were opposed to a state-run healthcare system, while the Communists were
supportive of a complete nationalisation of health care along a British Beveridge model.
The resulting programme is profession-based: all people working
are required to pay a portion of their income to a not-for-profit health
insurance fund, which mutualises the risk of illness, and which
reimburses medical expenses at varying rates. Children and spouses of
insured people are eligible for benefits, as well. Each fund is free to
manage its own budget, and used to reimburse medical expenses at the
rate it saw fit, however following a number of reforms in recent years,
the majority of funds provide the same level of reimbursement and
benefits.
The government has two responsibilities in this system.
- The first government responsibility is the fixing of the rate at which medical expenses should be negotiated, and it does so in two ways: The Ministry of Health directly negotiates prices of medicine with the manufacturers, based on the average price of sale observed in neighboring countries. A board of doctors and experts decides if the medicine provides a valuable enough medical benefit to be reimbursed (note that most medicine is reimbursed, including homeopathy). In parallel, the government fixes the reimbursement rate for medical services: this means that a doctor is free to charge the fee that he wishes for a consultation or an examination, but the social security system will only reimburse it at a pre-set rate. These tariffs are set annually through negotiation with doctors' representative organisations.
- The second government responsibility is oversight of the health-insurance funds, to ensure that they are correctly managing the sums they receive, and to ensure oversight of the public hospital network.
Today, this system is more or less intact. All citizens and legal
foreign residents of France are covered by one of these mandatory
programs, which continue to be funded by worker participation. However,
since 1945, a number of major changes have been introduced. Firstly, the
different health care funds (there are five: General, Independent,
Agricultural, Student, Public Servants) now all reimburse at the same
rate. Secondly, since 2000, the government now provides health care to
those who are not covered by a mandatory regime (those who have never
worked and who are not students, meaning the very rich or the very
poor). This regime, unlike the worker-financed ones, is financed via
general taxation and reimburses at a higher rate than the
profession-based system for those who cannot afford to make up the
difference. Finally, to counter the rise in health care costs, the
government has installed two plans, (in 2004 and 2006), which require
insured people to declare a referring doctor in order to be fully
reimbursed for specialist visits, and which installed a mandatory co-pay
of €1 for a doctor visit, €0.50 for each box of medicine prescribed,
and a fee of €16–18 per day for hospital stays and for expensive
procedures.
An important element of the French insurance system is
solidarity: the more ill a person becomes, the less the person pays.
This means that for people with serious or chronic illnesses, the
insurance system reimburses them 100% of expenses, and waives their
co-pay charges.
Finally, for fees that the mandatory system does not cover, there
is a large range of private complementary insurance plans available.
The market for these programs is very competitive, and often subsidised
by the employer, which means that premiums are usually modest. 85% of
French people benefit from complementary private health insurance.
Germany
Germany has the world's oldest national social health insurance system, with origins dating back to Otto von Bismarck's Sickness Insurance Law of 1883.
Beginning with 10% of blue-collar workers in 1885, mandatory
insurance has expanded; in 2009, insurance was made mandatory on all
citizens, with private health insurance for the self-employed or above
an income threshold. As of 2016, 85% of the population is covered by the compulsory Statutory Health Insurance (SHI) (Gesetzliche Krankenversicherung or GKV), with the remainder covered by private insurance (Private Krankenversicherung or PKV) Germany's health care system was 77% government-funded and 23% privately funded as of 2004.
While public health insurance contributions are based on the
individual's income, private health insurance contributions are based on
the individual's age and health condition.
Reimbursement is on a fee-for-service
basis, but the number of physicians allowed to accept Statutory Health
Insurance in a given locale is regulated by the government and
professional societies.
Co-payments were introduced in the 1980s in an attempt to prevent
over utilization. The average length of hospital stay in Germany has
decreased in recent years from 14 days to 9 days, still considerably
longer than average stays in the United States (5 to 6 days).
Part of the difference is that the chief consideration for hospital
reimbursement is the number of hospital days as opposed to procedures or
diagnosis. Drug costs have increased substantially, rising nearly 60%
from 1991 through 2005. Despite attempts to contain costs, overall
health care expenditures rose to 10.7% of GDP in 2005, comparable to
other western European nations, but substantially less than that spent
in the U.S. (nearly 16% of GDP).
Germans are offered three kinds of social security insurance
dealing with the physical status of a person and which are co-financed
by employer and employee: health insurance, accident insurance, and
long-term care insurance. Long-term care insurance (Gesetzliche Pflegeversicherung) emerged in 1994, but it is not mandatory. Accident insurance
(gesetzliche Unfallversicherung) is covered by the employer and
basically covers all risks for commuting to work and at the workplace.
Japan
There are two major types of insurance programs available in Japan – Employees Health Insurance (健康保険 Kenkō-Hoken), and National Health Insurance
(国民健康保険 Kokumin-Kenkō-Hoken). National Health insurance is designed for
people who are not eligible to be members of any employment-based
health insurance program. Although private health insurance is also
available, all Japanese citizens, permanent residents, and non-Japanese
with a visa lasting one year or longer are required to be enrolled in
either National Health Insurance or Employees Health Insurance.
Netherlands
In 2006, a new system of health insurance came into force in the
Netherlands. This new system avoids the two pitfalls of adverse
selection and moral hazard associated with traditional forms of health
insurance by using a combination of regulation and an insurance equalization pool.
Moral hazard is avoided by mandating that insurance companies provide
at least one policy which meets a government set minimum standard level
of coverage, and all adult residents are obliged by law to purchase this
coverage from an insurance company of their choice. All insurance
companies receive funds from the equalization pool to help cover the
cost of this government-mandated coverage. This pool is run by a
regulator which collects salary-based contributions from employers,
which make up about 50% of all health care funding, and funding from the
government to cover people who cannot afford health care, which makes
up an additional 5%.
The remaining 45% of health care funding comes from insurance
premiums paid by the public, for which companies compete on price,
though the variation between the various competing insurers is only
about 5%.
However, insurance companies are free to sell additional policies to
provide coverage beyond the national minimum. These policies do not
receive funding from the equalization pool, but cover additional
treatments, such as dental procedures and physiotherapy, which are not
paid for by the mandatory policy.
Funding from the equalization pool is distributed to insurance
companies for each person they insure under the required policy.
However, high-risk individuals get more from the pool, and low-income
persons and children under 18 have their insurance paid for entirely.
Because of this, insurance companies no longer find insuring high risk
individuals an unappealing proposition, avoiding the potential problem
of adverse selection.
Insurance companies are not allowed to have co-payments, caps, or
deductibles, or to deny coverage to any person applying for a policy,
or to charge anything other than their nationally set and published
standard premiums. Therefore, every person buying insurance will pay the
same price as everyone else buying the same policy, and every person
will get at least the minimum level of coverage.
New Zealand
Since 1974, New Zealand has had a system of universal no-fault health insurance for personal injuries through the Accident Compensation Corporation
(ACC). The ACC scheme covers most of the costs of related to treatment
of injuries acquired in New Zealand (including overseas visitors)
regardless of how the injury occurred, and also covers lost income (at
80 percent of the employee's pre-injury income) and costs related to
long-term rehabilitation, such as home and vehicle modifications for
those seriously injured. Funding from the scheme comes from a
combination of levies on employers' payroll (for work injuries), levies
on an employee's taxable income (for non-work injuries to salary
earners), levies on vehicle licensing fees and petrol (for motor vehicle
accidents), and funds from the general taxation pool (for non-work
injuries to children, senior citizens, unemployed people, overseas
visitors, etc.)
Rwanda
Rwanda is one of a handful of low income countries
that has implemented community-based health insurance schemes in order
to reduce the financial barriers that prevent poor people from seeking
and receiving needed health services. This scheme has helped reach 90%
of the country's population with health care coverage.
Switzerland
Healthcare in Switzerland is universal and is regulated by the Swiss Federal Law on Health Insurance. Health insurance is compulsory for all persons residing in Switzerland (within three months of taking up residence or being born in the country).
It is therefore the same throughout the country and avoids double
standards in healthcare. Insurers are required to offer this basic
insurance to everyone, regardless of age or medical condition. They are
not allowed to make a profit off this basic insurance, but can on
supplemental plans.
The universal compulsory coverage provides for treatment in case
of illness or accident and pregnancy. Health insurance covers the costs
of medical treatment, medication and hospitalization of the insured.
However, the insured person pays part of the costs up to a maximum,
which can vary based on the individually chosen plan, premiums are then
adjusted accordingly. The whole healthcare system is geared towards to
the general goals of enhancing general public health and reducing costs
while encouraging individual responsibility.
The Swiss healthcare system is a combination of public,
subsidised private and totally private systems. Insurance premiums vary
from insurance company to company, the excess level individually chosen (franchise),
the place of residence of the insured person and the degree of
supplementary benefit coverage chosen (complementary medicine, routine
dental care, semi-private or private ward hospitalisation, etc.).
The insured person has full freedom of choice among the
approximately 60 recognised healthcare providers competent to treat
their condition (in their region) on the understanding that the costs
are covered by the insurance up to the level of the official tariff.
There is freedom of choice when selecting an insurance company to which
one pays a premium, usually on a monthly basis. The insured person pays
the insurance premium for the basic plan up to 8% of their personal
income. If a premium is higher than this, the government gives the
insured person a cash subsidy to pay for any additional premium.
The compulsory insurance can be supplemented by private
"complementary" insurance policies that allow for coverage of some of
the treatment categories not covered by the basic insurance or to
improve the standard of room and service in case of hospitalisation.
This can include complementary medicine, routine dental treatment and
private ward hospitalisation, which are not covered by the compulsory
insurance.
As far as the compulsory health insurance is concerned, the
insurance companies cannot set any conditions relating to age, sex or
state of health for coverage. Although the level of premium can vary
from one company to another, they must be identical within the same
company for all insured persons of the same age group and region,
regardless of sex or state of health. This does not apply to
complementary insurance, where premiums are risk-based.
Switzerland has an infant mortality rate of about 3.6 out of 1,000. The general life expectancy in 2012 was for men 80.5 years compared to 84.7 years for women. These are the world's best figures.
United Kingdom
The UK's National Health Service (NHS) is a publicly funded healthcare
system that provides coverage to everyone normally resident in the UK.
It is not strictly an insurance system because (a) there are no premiums
collected, (b) costs are not charged at the patient level and (c) costs
are not pre-paid from a pool. However, it does achieve the main aim of
insurance which is to spread financial risk arising from ill-health. The
costs of running the NHS (est. £104 billion in 2007-8) are met directly from general taxation. The NHS provides the majority of health care in the UK, including primary care, in-patient care, long-term health care, ophthalmology, and dentistry.
Private health care has continued parallel to the NHS, paid for
largely by private insurance, but it is used by less than 8% of the
population, and generally as a top-up to NHS services.
There are many treatments that the private sector does not provide. For
example, health insurance on pregnancy is generally not covered or covered with restricting clauses. Typical exclusions for Bupa schemes (and many other insurers) include:
... ageing, menopause and puberty; AIDS/HIV; allergies or allergic disorders; birth control, conception, sexual problems and sex changes; chronic conditions; complications from excluded or restricted conditions/ treatment; convalescence, rehabilitation and general nursing care ; cosmetic, reconstructive or weight loss treatment; deafness; dental/oral treatment (such as fillings, gum disease, jaw shrinkage, etc); dialysis; drugs and dressings for out-patient or take-home use; experimental drugs and treatment; eyesight; HRT and bone densitometry; learning difficulties, behavioural and developmental problems; overseas treatment and repatriation; physical aids and devices; pre-existing or special conditions; pregnancy and childbirth; screening and preventive treatment; sleep problems and disorders; speech disorders; temporary relief of symptoms.
There are a number of other companies in the United Kingdom which include, among others, ACE Limited, AXA, Aviva, Bupa, Groupama Healthcare, WPA and PruHealth. Similar exclusions apply, depending on the policy which is purchased.
Recently (2009) the main representative body of British Medical
physicians, the British Medical Association, adopted a policy statement
expressing concerns about developments in the health insurance market in
the UK. In its Annual Representative Meeting which had been agreed
earlier by the Consultants Policy Group (i.e. Senior physicians)
stating that the BMA was "extremely concerned that the policies of some
private healthcare insurance companies are preventing or restricting
patients exercising choice about (i) the consultants who treat them;
(ii) the hospital at which they are treated; (iii) making top up
payments to cover any gap between the funding provided by their
insurance company and the cost of their chosen private treatment." It
went in to "call on the BMA to publicise these concerns so that patients
are fully informed when making choices about private healthcare
insurance."
The practice of insurance companies deciding which consultant a patient
may see as opposed to GPs or patients is referred to as Open Referral. The NHS offers patients a choice of hospitals and consultants and does not charge for its services.
The private sector has been used to increase NHS capacity despite
a large proportion of the British public opposing such involvement. According to the World Health Organization,
government funding covered 86% of overall health care expenditures in
the UK as of 2004, with private expenditures covering the remaining 14%.
Nearly one in three patients receiving NHS hospital treatment is
privately insured and could have the cost paid for by their insurer.
Some private schemes provide cash payments to patients who opt for NHS
treatment, to deter use of private facilities. A report, by private
health analysts Laing and Buisson, in November 2012, estimated that more
than 250,000 operations were performed on patients with private medical
insurance each year at a cost of £359 million. In addition, £609
million was spent on emergency medical or surgical treatment. Private
medical insurance does not normally cover emergency treatment but
subsequent recovery could be paid for if the patient were moved into a
private patient unit.
United States
Short Term Health Insurance
On the 1st of August, 2018 the DHHS issued a final rule which made federal changes to Short-Term, Limited-Duration Health Insurance (STLDI) which lengthened the maximum contract term to 364 days and renewal for up to 36 months. This new rule, in combination with the expiration of the penalty for the Individual Mandate of the Affordable Care Act, has been the subject of independent analysis.
The United States health care system relies heavily on private
health insurance, which is the primary source of coverage for most
Americans. As of 2012 about 61% of Americans had private health insurance according to the Centers for Disease Control and Prevention. The Agency for Healthcare Research and Quality
(AHRQ) found that in 2011, private insurance was billed for 12.2
million U.S. inpatient hospital stays and incurred approximately $112.5
billion in aggregate inpatient hospital costs (29% of the total national
aggregate costs).
Public programs provide the primary source of coverage for most senior
citizens and for low-income children and families who meet certain
eligibility requirements. The primary public programs are Medicare, a federal social insurance program for seniors and certain disabled individuals; and Medicaid,
funded jointly by the federal government and states but administered at
the state level, which covers certain very low income children and
their families. Together, Medicare and Medicaid accounted for
approximately 63 percent of the national inpatient hospital costs in
2011. SCHIP
is a federal-state partnership that serves certain children and
families who do not qualify for Medicaid but who cannot afford private
coverage. Other public programs include military health benefits
provided through TRICARE and the Veterans Health Administration and benefits provided through the Indian Health Service. Some states have additional programs for low-income individuals.
In the late 1990s and early 2000s, health advocacy
companies began to appear to help patients deal with the complexities
of the healthcare system. The complexity of the healthcare system has
resulted in a variety of problems for the American public. A study found
that 62 percent of persons declaring bankruptcy in 2007 had unpaid
medical expenses of $1000 or more, and in 92% of these cases the medical debts exceeded $5000. Nearly 80 percent who filed for bankruptcy had health insurance. The Medicare and Medicaid programs were estimated to soon account for 50 percent of all national health spending.
These factors and many others fueled interest in an overhaul of the
health care system in the United States. In 2010 President Obama signed
into law the Patient Protection and Affordable Care Act.
This Act includes an 'individual mandate' that every American must have
medical insurance (or pay a fine). Health policy experts such as David Cutler and Jonathan Gruber, as well as the American medical insurance lobby group America's Health Insurance Plans,
argued this provision was required in order to provide "guaranteed
issue" and a "community rating," which address unpopular features of
America's health insurance system such as premium weightings, exclusions
for pre-existing conditions, and the pre-screening of insurance
applicants. During 26–28 March, the Supreme Court heard arguments
regarding the validity of the Act. The Patient Protection and Affordable
Care Act was determined to be constitutional on 28 June 2012. The
Supreme Court determined that Congress had the authority to apply the
individual mandate within its taxing powers.
History and evolution
In the late 19th century, "accident insurance" began to be available, which operated much like modern disability insurance.
This payment model continued until the start of the 20th century in
some jurisdictions (like California), where all laws regulating health
insurance actually referred to disability insurance.
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 U.S. by 1866, but the industry consolidated rapidly
soon thereafter. While there were earlier experiments, the origins of
sickness coverage in the U.S. effectively date from 1890. The first
employer-sponsored group disability policy was issued in 1911.
Before the development of medical expense insurance, patients were expected to pay 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. One
major obstacle to this development was that early forms of comprehensive
health insurance were enjoined by courts for violating the traditional
ban on corporate practice of the professions by for-profit corporations.
State legislatures had to intervene and expressly legalize health
insurance as an exception to that traditional rule. Today, most
comprehensive private health insurance programs cover the cost of
routine, preventive, and emergency health care procedures, and most
prescription drugs (but this is not always the case).
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. The predecessors of today's Health Maintenance Organizations (HMOs) originated beginning in 1929, through the 1930s and on during World War II.
The Employee Retirement Income Security Act
of 1974 (ERISA) regulated the operation of a health benefit plan if an
employer chooses to establish one, which is not required. The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) gives an ex-employee the right to continue coverage under an employer-sponsored group health benefit plan.
Through the 1990s, managed care insurance schemes including health maintenance organizations (HMO), preferred provider organizations, or point of service plans grew from about 25% US employees with employer-sponsored coverage to the vast majority.
With managed care, insurers use various techniques to address costs and
improve quality, including negotiation of prices ("in-network"
providers), utilization management, and requirements for quality assurance such as being accredited by accreditation schemes such as the Joint Commission and the American Accreditation Healthcare Commission.
Employers and employees may have some choice in the details of plans, including health savings accounts, deductible, and coinsurance. As of 2015, a trend has emerged for employers to offer high-deductible plans,
called consumer-driven healthcare plans which place more costs on
employees; some employers will offer multiple plans to their employees.
