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Health care is one of the most important resources in the world. People believe in health care services because they improve the quality of life. A country is said to be peaceful if the citizens healthy and free from pain and tears caused by diseases and ailments.

The major problem that seems to be facing health care in United States for the last decade is the high cost of medication and insurance policies. The rising costs of health care have left many people struggling to pay their medical bills. The health insurance premiums are so high that most workers complain they cannot afford to pay them from their incomes.

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Due to this some patients pay their medical bill out-of-pocket or forego the recommended care. Employers on the other hand are eliminating health benefits or cutting them making many people live uninsured.

Statistics show that, the percentage of people living with high healthcare burden rose from 15% in 2001 to 20% in 2006(Institute of Medicine of the National Academies of Science, 2004). Statistics also show that the out-of-pocket cost of health insurance services and premiums are rising at a higher rate that the family incomes.

Both the federal and state government has challenges in meeting expanding costs of public healthcare programs like Medicare and Medicaid. Studies carried out by Health system Research programs show that United States has the highest cost of healthcare than any other developed nation regardless of whether the costs are measured on per capita basis or as a percentage of the economy or the total dollars spent.

The healthcare costs have been rising for the last 40 years at a faster rate than personal incomes and overall economy. The healthcare problem has been a long-term crisis which has raised political turmoil with America’s president Barrack Obama and his counterpart John McCain basing their political campaigns in the issue. The fiscal crisis demands a solution which might not be palatable but had to be made in order to avoid future economical constraints.

Healthcare systems are affected by a number of people namely insurers, drug companies, doctors, hospitals, lawyers, politicians and peoples bad habits. Survey shows that all these people in one way or another contribute to rising health-care costs, the highest contributors being hospitals, doctors and insurers

PROBLEM STATEMENT

The major health care problem facing the world today is the rising cost of medical care including medical insurance premiums. The question therefore arises on who should be blamed for the high health care cost? What can be done to solve the medical treatment before it bankrupts the economy?

Healthcare systems are affected by a number of people namely insurers, drug companies, doctors, hospitals, lawyers, politicians and peoples bad habits. Survey shows that all these people in one way or another contribute to rising health-care costs, the highest contributors being hospitals, doctors and insurers. The research project tries to find out the government efforts and strategies in improving the medical tragedy.

LITERATURE REVIEW
Quality of Health Care and Insurance Costs
Cost of health care has increased for both insurers and consumers for the last 20 years. In 1980 Americans spent $247.3 billion in health care a figure that increased four times to $1.2 trillion by 1999(The Editors, 2009).

Doctors relate the dramatic increase in costs to Americans life expectancy. They imply that Americans are living longer citing the life expectancy in 1900 as 50 years which has increased to around 76 years in 2000.The new expertise and technology has enabled doctors to treat more patients and more ailments. Unfortunately the new technology advances means increased costs of buying equipments and performing these procedures (arthroscopic surgery, MRI scans and robotic surgery) as well as buying newer drugs.

Healthcare costs are also attributed to increased use of health care professional services. Statistics show that in 1991 an estimated 670 million people visited doctors’ offices a figure that grew to 457 million by 1999.These shows that as years go, many Americans require doctors for their medical problems.

Reasons for Health Insurance
It costs an American $1000 to stay in a hospital for a single day. If insurance companies pool as many people in to a single group it can spread the financial risk over a larger group (Northern California Neurosurgery Medical Group, 2007).It is hard for experts to predict if a person will be sick but there is a likelihood that an estimate of how many people would be sick in a large group can be calculated. Not everyone who pays health insurance premiums use them as many of them do not get sick. The insurance company therefore should use the money to cover the few people who need treatment.

Medicare, Medicaid and Medical
These are programs that provide insurance policies to Americans. Medicare was established in 1966 as a health insurance company to cover Americans above the retirement age of 65.The Insurance also covers disabled Americans either by injury or illness.

Although Medicare provides a foundation for health care coverage, it also leaves a gap in coverage as most people are not covered. Survey shows that some people with Medicare supplement it with private insurance called “Medigap”. Some employers even provide their retirees with supplemental coverage as well. The cost of Medicare supplement policies vary from one state to the other (Northern California Neurosurgery Medical Group, 2007).

Medicaid also referred to as “Medical” in California provides insurance covers to people with low incomes particularly pregnant women and children. Many doctors do not prefer the coverage as they say they loose money and some do not treat patients with the cover. Americans and advocates for the poor demand Medicaid reforms and better coverage despite the current budget crisis.

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