MEDICARE (1965)
Sources of Health Insurance
Uninsured = 15%
Public (Medicare, Medicaid, Military) = 24.5%
Employer-Provided = 58%
... [Show More] Individually Purchased = 8.4%
Why are there so many people in the U.S. without insurance?
The U.S. is one of the few high-income countries where purchasing health insurance is
VOLUNTARY.
o Our gov’t does not provide all of us with health insurance (and collect taxes to pay
for it). – like Canada
o Our gov’t does not compel or mandate that we all buy health insurance, like Japan,
although there is now an incomplete mandate in the ACA
Some people don’t earn enough to afford health insurance, or choose to spend their limited
income on other essentials.
o For a low-salary person (ex: worth $25k), HI is still $5k but they would prefer to
pocket it.
Not all Employers offer health insurance.
o Only 44% of small firms offer it, while 98% of large firms do.
At small firms, probably don’t want it anyway because they would prefer the
cash for food/rent, and the experience ratings can be really high in a small
group if one person is sick.
o The employees then have to buy in the expensive individual market.
o Remember:
There are tax advantages to employer-sponsored HI.
Workers, not employers, actually pay the full health insurance premiums. –
implicitly allocate $4,000 of salary
Some high-income, healthy people decide not to buy community-rated policies because
they are “unfairly priced”.
o may not be a good bargain for healthy people
Insurance Policies in the individual market or non-group/employer market are generally
much worse than those provided by an employer.
o Pre-existing condition clauses
o Adverse selection – higher premiums and loading charges
Medicaid doesn’t cover all of the poor.
o 32% of those <100% FPL don’t have Medicaid.
Lots of states have Medicaid that covers children, not parents, or covers poor
people only if they have children.
Some states only provide Medicaid to those under 50% FPL.
o 6% of the very rich don’t have insurance because they feel that they are invulnerable
and/or they can afford it if they get sick.
*This is changing with the ACA (<133% FPL).
o Individual mandate and employer mandate.
o An estimated 16 million additional people could be covered.
o Strong financial incentives provided by gov’t to expand Medicaid.
Downloaded by Simon Kamau ([email protected])
lOMoARcPSD|25111999
MEDICARE
Who is covered by Medicare?
Elderly ( age 65+ covered if they/spouse paid payroll taxes for at least 10y)
Disabled under 65 after waiting for 2 years
End-stage renal disease (ESRD) patients – kidney dialysis covered (1973)
Medicare Enrollment TREND
Steadily increasing in all sectors.
Huge increase in our disabled population.
o 10,000 people become eligible (get older) each DAY.
52.3 million people covered in 2013.
COMES IN FOUR PARTS
Part A: Hospital/Home Care (1965) [Show Less]