Trends, Benefits, and Impact of Consumer Health Insurance

Trends, Benefits, and Impact of Consumer Health Insurance

Health Care Delivery in the U.S./HCS235

July 17, 2010

Trends, Benefits, and Impact of Consumer Health Insurance

Healthcare Insurance, better known as health insurance, like that of other forms of insurance has been around for a very long time, dating back to the first ever proposal in 1694 by Hugh the elder Chamberlen from the Peter Chanberlen family (Wikipedia). What is health insurance? Defined by a website entitled Ask.com health insurance is; "insurance against expenses through illness of the insured" (Ask.com, nd). Health insurance was originally established to provide accident insurance and operated like some of the disability insurance of modern times we have today. Today consumer health insurance programs have evolved into a comprehensive collection of coverage from accident to emergency room care and from the simplest minor scrape to the most difficult surgery. For one to have a better understanding of how the consumer health insurance works and has evolved from the past 75 years, one should be more familiar with some of the historical trends consumers have dealt with over the years, the type of benefits that are available, provider networks, some of the impacts benefits have on the healthcare delivery system, resource management and the overall health status of individuals and society. As a consumer of health insurance it is important to first have an understanding of some of the historical trends in how health insurance has evolved.

Going back as far as the mid 1930's health insurance has been an item of interest. During this time the Great Depression actually changed priority of health insurance, due to unemployment insurance and old age as well as the Social Security Act being passed, which by the way omitted health insurance. The priority was changed to bring the health insurance to the forefront of legislation. Influenced by the Roosevelt administration, despite the political conflicts and priorities and "against the advice of insurance professionals, Blue Cross began offering private coverage for hospital care in dozens of states" (Noah, 2007) From President Roosevelt to President Obama health insurance has always been a focus for these administrations. In the 1940's prepaid group healthcare began to emerge and American companies started offering health benefits to their employees for incentives to bring people to their companies to work. As early as the 1960's the expenditures of the health care insurance program had created the same type financial woes as we have today within the health insurance program and workplace insurance rates were becoming unaffordable for those outside the workplace and the elderly. According to Timothy Noah, a historian for the Public Broadcasting Service, in the 1970's the "healthcare costs were escalating rapidly, partially due to unexpectedly high Medicare expenditures, rapid inflation in the economy, expansion of hospital expenses and profits, and changes in medical care including great use of technology, and medications..." Ironically in the 1990's Noah reports in his article entitled Healthcare Crisis: Healthcare Timeline that health care cost was on the rise again and at a rate double the inflation rate. The 1990's brought about reform just as today has. During the 1990's the health care reform bill was a failure and did not make it past the scrutiny of Congress. By the start of the new decade of the 21st century, more than 44 million Americans, roughly about 16-18% of the entire nation's population came up short on having health insurance at all, Noah went on to report (Noah, 2007). Benefits for consumers since the beginning of health insurance have always been in and out of use and continue to bring about great discussion. Today in 2010 the trending continues. Although there has been tremendous progress in health insurance, and substantial technology improvements that directly contribute to the quality of life one has, we need not over look some very important trends that are being seen across America and around the world. Scientist are studying genes for stem cell research, personalized drugs are being designed to work specifically for individuals and the advancement of technology has brought us all even closer to our doctors through the use of medical monitors; a device that is in one's home that provides a doctor with one's health information in a real time like scenario. There are several other trends that have been detected during the past 75 years of health insurance and as such there are trends ahead in "2010 and beyond." According to an article entitled Health Care Reform - Trends and Implications: 2010 and Beyond some of those trends are as follows; increasing cost of health care, continued pressure to reduce reimbursement to providers, the number of uninsured and under insured continue to rise, inpatient services continue to decline, and beds in hospitals are increasingly filled, just to name a few (Healthnewsdigest.com,2010), With the trends continuing on a path of unforeseen success benefits are certainly a concern for all consumers.

When it comes to health insurance like that of car insurance there are plenty of benefits, but more importantly there are several different types of benefits as well as provider networks. These two are best described together as they are closely related. When one refers to provider network, one can also equally be referring to benefits. There are four main types of health insurance or provider networks available for consumers to choose from of which each one offers their own benefits; Major Medical, Health Maintenance Organization better known as HMO, Preferred Provider Organization, commonly called PPO, and Point of Service also known as POS. In an article entitled Types of Health Insurance by Eileen Bailey, the four main plans are determined by "individuals and families needs...that best suites their needs and budgets" (Bailey, Jan 2008) In the Major Medical health insurance plan Bailey says that "the insured is responsible for paying a deductible before the insurance pays benefits" and also notes that there is a 80/20 split. This is where the insurance company pays 80 percent of the medical bills while the consumer pays 20 percent. In this plan one of the nice benefits is that the patient/consumer can pick any doctor or any hospital to get health care. After health care is complete the consumer gets reimbursed by the insurance company. This type health insurance benefit is commonly called "traditional health insurance" (Bailey, Jan 2008). In the HMO type