In the U.S. health care is financed, or paid for, in a variety of ways. Individuals may pay directly for services received. Others may have health insurance coverage as a tax free benefit from their employment. Military personnel and their dependents, as well as veterans, are provided health care coverage through the federal government. Older Americans depend upon Medicare and low income mothers and children, as well as some disabled persons in the U.S., receive health care assistance through Medicaid. Children who might not otherwise receive medical attention may do so through the State Children’s Health Insurance Program (SCHIP).
Many of the employed are covered by employer provided health care insurance… traditional indemnity insurance or a managed care plan, such as a Health Maintenance Organization (HMO), Preferred Provider Organization, (PPO) or Point of Service Plan (POS) – which employers purchase as a group. Employees may or may not have had some input into the choice of that plan. Those with employer provided insurance are in good company, as the vast majority of Americans are covered by employment-based private insurance plans, 64% of the U.S. population, for example, in 2000.
An additional 24% of our population in the same year was covered by some type of government plan. The breakdown is as follows: Medicare, 13%; Medicaid, 10%, Military Health Insurance, 3%.
Many Americans are covered by more than one health insurance plan, and coverage between plans often overlaps. Among plans and programs there are many differences in the range of services covered, procedures followed, and payment provided. For our purposes today, it is probably not so important that we know all of these details, and you will find additional information on various types of insurance plans in the glossary.
From this brief description, however, one point is very clear. The health care financing system is not so much a system as it is a crazy-quilt of programs that, when pieced together, cover to some degree, the majority–but clearly not all—of the American people.