Health care insurance started gaining popularity in the 1940s, when people and health institutions began to realize that insurance “spreads the risk of expensive medical conditions across a large population base.”
Thus, it prevents personal bankruptcy in case of serious health problems. Health care insurance also makes health care services more accessible to the public.
Thus, there was a marked expansion in the coverage of private health insurance, resulting in stronger financial foundation with which to invest in better equipment and facilities for medicine and health care. Nevertheless, a bigger part of the population remained uninsured, because they were incapable of paying the cost on their own.
There are many economic pricinples applicable in the healthcare environment. Some of these involve the supply and demand of healthcare coverage and the costs involved in providing healthcare coverage to the uninsured.
II. Economic principles applicable to the healthcare environment
A. Demand and Supply of Healthcare Coverage: the United States case
1. Data on the Number of Uninsured in the American Population.
Andersen, Rice and Kominski single out the United States as the only economically developed country that does not provide health care coverage to its entire population. Indeed, there is a huge number of uninsured people in the country. The figures above show that millions of Americans have no health insurance as of 2003.
The United States government continuously battles, policy-wise, the problem of high rates of uninsured people. Many efforts to solve this problem through public assistance or welfare approach are yet to find success.
Despite the long history of failed attempts at lowering uninsurance rates, various states of the Union continue to register high uninsurance rates. Andersen, Rice and Kominski describe statistically the state of uninsurance, categorized by age group and ethnicity.
The failure of individuals and families to provide for their own health care coverage is caused by increased health care costs. Thus, they need to turn to alternative sources of funds to provide for such coverage, such as private funds from employers and public programs, such as Medicare and Medicaid.
However, all of these alternatives are inadequate to serve the huge demand for health care coverage, as Medicare and Medicaid do not cover all people, and not all employers are capable of providing health care coverage. Indeed, Andersen, Rice and Kominski point out that there are many issues involving employment-based coverage, such as the decline in eligibility for health benefits in companies.
III. Public Policies and Programs on Healthcare Coverage
Andersen, Rice and Kominski traced the history of Medicaid, and noted that it was “enacted in 1965 to provide coverage to poor persons who were eligible for federally supported, state-run welfare programs.” There were federal guidelines established to be followed by the states, and this enabled the program to assist families who could not afford the cost of health care insurance.
Between 1970 and 1974, Medicare also covered persons with disabilities even though they are below 65 yrs. old.
3. Reforms Programs and Changes.
Four decades later, the program already covers 42 million people, who are elderly or with permanent disabilities. (The Henry J. Kaiser Family Foundation, 2007). D. Effects.
They also pointed out that Medicaid coverage was able to provide an equivalent rate of services to those provided by private institutions, and consequently, loss of coverage has a serious adverse impact on access to health services and status. Indeed, Medicaid was a useful and welcome service provided by the United States government. However, with the limited coverage it offers, there are still many people who fail to receive health care services.
IV. Healthcare Expenditures
A. Measurement of healthcare expenditures and description of trends
Andersen, Rice and Kominski analyzed and measured health care costs and discussed its trends. This analysis is important because it could provide suggestions as to how better to manage costs in the field and thereby provide better coverage to a greater number of people.
They sought to compile data and formulate matrices that would accurately reflect the dynamics of cost and expenditure on health care coverage, but they discovered many problematic issues, such as the difficulty in gathering sufficient data. Nevertheless, here are some data with respect to the growing cost of health care insurance and its effect on reducing health care coverage.
Health coverage is important because it is “the principal financial means by which people can obtain services.” It has a direct relation with the health status of the American population, and on their access to medical care.
Consequently, the lack of insurance coverage causes serious health care problems on citizens, including diminished health and premature deaths of uninsured people, lost opportunity for normal development of uninsured children, financial risk, stress, uncertainty, and instability of families and healthcare institutions and providers in communities, reduced work force productivity, and increased program costs for public programs such as Medicaid.
It is apparent from these adverse consequences, that there is a need for both the public and private sector to increase health care coverage to better the health status of the American populace.
Brayton Purcell LLP. (2007). Medical Issues Include Uninsured Workers and Inadequate Health Care. Retrieved October 28, 2007, from http://www.braytonlaw.com/news/mednews/051404_healthcare.htm
Hadley, J. & Holahan, J. (2004). The Cost of Care for the Uninsured: What Do We Spend, Who Pays, and What Would Full Coverage Add to Medical Spending? The Kaiser Commission on Medicaid and the Uninsured. Retrieved October 28, 2007 from http://www.kff.org/uninsured/upload/The-Cost-of-Care-for-the- Uninsured-What-Do-We-Spend-Who-Pays-and-What-Would-Full-Coverage- Add-to-Medical-Spending.pdf