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Health Insurance comes where there is a chance of bringing oneself to paying medical bills that are incurred by individuals. Health Insurance companies develop a system by determining the expenses incurred in the health care system, where they develop a standard financial structure, where they decide the premiums or such related payments. This is to ensure that the money is available to pay for the health care benefits as mentioned in the insurance agreements.
The earliest health insurance plans were for accidents incurred from travelling from railways or steamboats. During Civil War (1861-1865), the first insurance plans rolled out, by covering all injuries and illnesses. Massachusetts Health Insurance of Boston in 1847 had rolled out the first ever group policy. The first individual disability and illness policies by insurance companies rolled out in 1890 .
During World War II, government imposed a wage freeze. Employers added health care in the salary packages, hence improving the benefits package of an employee. There was a greater acceptance of group health care, and its growth accelerated .
During the 1950’s and 1960s, government increased the budgets for covering health care. In 1954, disability benefits were included in the social security. Government instituted Medicare and Medicaid program in 1965. 75% of the health care costs were sourced privately. By 1995, government bore 50% of the cost and 50% by individuals/companies .
General cost of living during 1980’s and 1990’s increased substantially, so did the cost of health care. As a result, many company sponsored group insurance plans were switched to ‘Managed Care Plans’ from ‘Fee-for-Service’. Subsequently, by 1990’s many Americans enrolled themselves in ‘Managed Care Plans’ .
Managed care is a type of a health insurance, where the health care company does agreements with specific hospitals, doctors of health care professional, where they provide range of services to the members of managed care institutions for a cost which is reduced from the normal cost .
If we look at the brief history of the health insurance, in 1910, health insurance was a pre-paid activity. By 1929, pre-paid hospital care was established by Blue Cross plans. By 1930, physician charges were reimbursed by Blue Shield plans. In 1935, The National Labour Relation act was passed, which helped health care sector. By 1955, 70% of the population was under health care system.
With the changes that are happening on the legal side of healthcare in the country, there are many changes that are happening in the healthcare front. The United States health insurance plays a very important role in the national economy. Changes like the employer activism, greater involvement in the state sponsored plans, Affordable Healthcare Act 2010 and other aspects are changing how the horizon would look like in few years to come. The employers have contributed the lion’s share in the employee health insurance in the past decades.
There are three important changes that are happening in the health insurance industry today.
- Changing role of the employers. Many American employees are to choose from a basket of policies pre-chosen by their employees for a variety of factors. Smaller employers have begun to drop the coverage. Rest of them are choosing to share the burden with their employees. Now employees also play an active role in choosing a policy. Also, another wind of change is that the employers are choosing to work with a fewer providers only, unlike in the past. As employees become involved with the insurance aspect, there is also a rising awareness on wellbeing and preventive care
- There is also a trend to enroll in the government programs like Medicare, Medicaid, Employee Health Plan, etc. This is increasing the role the government is playing the medical insurance front.
- Finally, the Affordable Healthcare Act. Before this Act there, it was not mandatory for either employers or individuals to buy healthcare insurance. Today any employer with more than 50 employees is mandated by law to buy healthcare insurance. If they do not they have to pay a penalty of $2000 per employee per year of default. And from this year on if an individual not eligible for Medicaid, must purchase health insurance or else they also have to pay penalties!
All these factors are playing an active role in shaping the healthcare insurance and managed healthcare in the United States. It will be a little while before the situation settles down, and there is clarity in this segment of the US economy.
References
MedlinePlus. (2014). Managed Care. Retrieved October 11, 2014, from MedlinePlus: http://www.nlm.nih.gov/medlineplus/managedcare.html
Northern California Neurosurgery Medical Group, Inc. (2014). The History of Health Insurance In The United States. Retrieved October 11, 2014, from Northern California Neurosurgery Medical Group, Inc.: http://www.neurosurgical.com/medical_history_and_ethics/history/history_of_health_insurance.htm
