An Overview on the Medical Insurance System in United States

The medical insurance system in the United States is considered to be one of the most important insurance systems available in the country. It is a well-known fact that the costs of medical care in the United States are steep. Hence, it is best to purchase a medical insurance plan and have your medical care expenses covered by the medical insurance company.

An Overview

The concept of the medical insurance system in the United States was first seen as voluntary programs. As early as 1850, medical insurance policies were already made available provided mainly by fraternal beneficiary associations and cooperative mutual benefit organizations. However, the proliferation of medical insurance systems in the United States was still vague until the 1920's when people were mostly treated at home, hence, the need for a comprehensive medical insurance coverage was not necessary.

Moreover, most insurance companies during that time were hesitant in providing medical insurance policies, taking into consideration the very low demand for such type of insurance. Experts say that it was in this point in history that insurance companies believe that health was not an insurable service due to high probabilities of moral hazard and adverse selection.

Moral hazard refers to the mental condition and behavioral changes caused by one's awareness that if something terrible were to occur, everything is relieved by his or her insurance policy. Adverse selection, on the other hand, refers to an individual's predisposition of getting insurance because he will most likely have a use for it. Hence, those who are sick and unhealthy will more likely purchase a medical insurance than those who are healthy. Healthy people would most likely not buy medical insurance because they don't need it and would consider it as elective and not extremely necessary, besides being an additional cost.

But as the development of medical technology and medicine proceeded, the costs of medical treatment has become high-priced. And with the growing need for medical care, particularly the older generation, more and more people knew that they have to get a good medical insurance policy to cover up for their medical expenses.

And as the medical insurance system in the United States continue to progress, commercial companies have been able to provide restricted medical insurance coverage. Many labor unions and other businesses were also able to provide limited medical insurance plans. Most of the medical insurance policies were implemented by Blue Shield and Blue Cross. They were available primarily as non-profit services and community-funded plans based on agreements with the subscriber and the concerned hospital.

The Medical insurance system in the United States was further improved through various government policies that promote the use of health insurance. The need to provide feasible medical care for the aged was apparent, hence, the creation of Medicaid and Medicare.

Medicaid was created for the poverty-stricken populace. Since its inception in 1972, the number of people who were previously short of medical insurance has significantly increased. Alternatively, Medicare, a government-sponsored medical insurance program, was created to cover costs of medical care for the aged.

To date, more than 80% of the American population is already covered by medical insurance policies. Nearly 60% of the overall insured members obtained their plans through employers while more than 25% of Americans obtain medical insurance through different government agencies. The number of people who obtained medical insurance grew from 12 million to more than 220 million in 1996.

However, the increasing costs of medical insurance policies was felt and seen by the members. This goes to show why nearly 44 million people in the United States chose not to get medical insurance. Premium rates have significantly increased, thus, employers providing medical insurance policies to their employees has likewise increased the amount of their employees' contribution.

In this manner, the need to restructure medical insurance system in the United States is important. A nationalized medical insurance system in the United States was seen as the next best thing to a good government. Experts say that the United States should consider a nationalized health insurance scheme, like that to be found in all countries in the world.

Many people see the medical insurance system in the United States more of a luxury than a privilege. Hence, advocates of nationalized medical insurance system in the United States believe that legislators should create bills for national health insurance plans and provide comprehensive coverage for people with low incomes. Reports show that this marginalized sector of the community comprises two-thirds of the uninsured populace.

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