Impacts of cost and the rate of growth in health care spending, in the United States, have increased. The increase has been to the extents of outpacing the growth rate in population, inflation, and gross domestic product. From 1940 to 1960, the annual rate of growth in actual health spending per capita averaged 3.6%. In the 1960s, the annual rate of growth in actual health spending per capita was 3.6%. In the 1990s, the figures were 6.5%. The fraction of GDP accounted for by health care spending increased from 4.5% in 1940 to 12.2% in 1990. In 2005, health-care investment was projected to be about $2 trillion, or $6,697 per capita, accounting for 16 percent of GDP. The continued growth in health expenditure over the past four decades is expected to increase, and by 2015, spending would hit $4 trillion, which is 20 percent of GDP.
For several years, the continuing growth in spending on health care has been the subject of heated discussion in the US for several years. Further issues are influenced by studies and eyewitness accounts. It points out that the increase in expenditures on health care is expected to affect the US economy. Health-care investment has the ability to influence an economy in a variety of distinct and nuanced ways. Furthermore, the evolving effects may differ across all sectors of an economy as well as between various demographic groups. The reduction in total economic development is one significant effect of expanded spending on health care. The same impact, on the other side, has the ability to fuel economic growth in certain sectors. Therefore, recognizing how expanded health care spending impacts the economy needs an appraisal across several dimensions (Eaton et al, 2002).
Tax collection from residences and company premises is the responsibility of the national, federal, and municipal governments. The tax receipts support support universal health insurance services as well as provide families with appropriate health coverage. Businesses, on the other side, are liable for offering work and health care to their workers. As a consequence, families became the final providers of health insurance while still covering certain health-care expenses (Eaton et al, 2002).
It’s worth remembering that the consequences of health care on one industry are likely to have an influence on the outcomes of other industries. Consider a case in which the government decreases the health-care budget by decreasing the eligibility for public health benefits. This government action is contributing to a spike in household un-insurance prices. Simultaneously, an uptick in health-care spending is expected to result in higher taxes, reduced expenditure in other vital industries, or greater budget borrowing. Companies are still expected to slash jobs and expenditure as a consequence of higher health care spending (Eaton et al, 2002).
The US economy is still expected to face inflation as a consequence of higher health-care costs. It would render US products and services less affordable on the world market, as rising health care spending will contribute to higher retail prices. Finally, higher health care investment is expected to make health care available to all, create bankrupt patients, and reduce retirement income for individuals (Pauly et al, 2009).
Impacts of the Affordable Health Care for America Act HR 3962
The Universal Health Insurance for America Act was approved by the House of Representatives by a majority of 220 to 215 in November 2009. The aim of this Act is to provide all Americans with access to accessible, high-quality health care. The bill is a multifaceted one that discusses numerous concerns related to health care sector enhancement. Expanding health benefit benefits and amending Medicare reimbursement rules in both standard and advantage programs are indicators of changes to the health sector. Other improvements include removal of the coverage gap for prescription drug coverage, initiating pilot projects that will improve primary care capacity as well as evaluating on new care delivery models. The bill also focuses on funding research, fighting fraud and abuse, investing on health care personnel, investing in public health, and establishing prevention and wellness trust fund (Pauly et al, 2009).
Impacts of H.R. 3962 on Coverage
The bill will reduce the number of un-insured people to about 24 million by the year 2019. It will take about two years to establish the Exchange and get companies prepared to provide approved products into the market. In a situation where the implementation of the H. R. 3962 takes 2 years, the number of un-insured people will reduce each year from 2013 t0 2015. The decline in the number of the un-insured will be about 56% in relation to estimates of the un-insured in a country without new policies.
Impacts of H. R. 3962 on Spending
The expenditure on personal health will go up. This is likely to occur because people who were un-insured before will get insured and consume more health care services. On the other hand, people insured before will look for more friendly plans in response to subsidies. The increase in personal health care expenditure will amount to $753 billion from year 2013 to 2019. At the same time, the national health expenditure from Medicaid services and Centers for Medicare estimates that the US personal health care expenditure will amount to $22.5 trillion. In general, expenditure on personal health care will increase by 3.3% from 2013 to 2019.
Impacts of H.R. 3962 on Government Spending
The new government expenditure on providing coverage will amount to $1 trillion from 2013 to 2019. This will be as a result of cumulative high federal and Medicaid expenditures linked with the eligibility expansion. The other cause will be federal payments of affordability credits for eligible participants in the Exchange. Other factors likely to cause an increase in the new government expenditure include wellness grants, temporary high risk insurances, Health Insurance Exchange administration, and the public health investment fund (Pauly et al, 2009).
Three Main Types of Health Insurance in the US Preferred Provider Organization (PPOs)
In this health insurance, there is a contract between PPOs and health care providers. The contract is to offer medical care at discounted prices. Benefit programs motivate members to use PPO providers through high reimbursement rates and reduced deductibles, out of pocket maximums, and co-payments. Members can seek services from providers who are not part of PPO network, but face increased out of pocket costs. The program offer people the freedom to go to network and non network providers. The other advantage is that it offers a set level of initial and progressing review in relation to the quality of network and the care delivered by network providers. In addition, the network provides medical care at reduced cost compared to traditional indemnity plans. The other advantage is that the networks have spread widely and are available in many national locations. In 2010, the average cost for a monthly premium was $427 for an employee and $1,169 for a family (Pauly et al, 2009).
Health Maintenance Organization
This is an alternative to free-for-service medical care. The program combines a range of health care services within a single organization. HMOs are responsible for giving health services to their subscribers, and they receive fixed monthly or annual payments from their subscribers. HMO consists of well established prototypes that have been present for as long as 40 years. HMOs defines organizations that offer primary health care to their subscribers and supplemental health care when given additional payments. One requirement is that prepaid registration fee for both primary and supplemental health care should be set uniformly based on a community rating system (Murphy and Topel, 2006).
The original free-for-service came into play in 1965. Later, the Medicare FFS came in, whereby the federal government issues the insurance plan through contractors. In doing so, the government sets the terms of payment for health care providers. This approach has helped the federal government to establish direct financial relationships with every key category of health care providers. This form of relationship has immensely impacted on the organization of the health sector for many years (Murphy and Topel, 2006).
The Evolution of Promotion of Health and Disease Prevention in the US
The contemporary societal interest in promoting health and preventing diseases draws from three main factors. The first factor that causes such influence is the epidemiological transition from infectious to chronic medical conditions. This period produced significant impacts on birthrates, mortality, number of the aged in a population, and proportion of people over the age of 65, and resulting healthcare costs. Secondly, is the significant evidence supporting the impacts of behavioral factors on major chronic medical conditions such as cancer, heart diseases, and stroke (Murphy and Topel, 2006).
The third factor was the growing proportion of documentation that supported the fact that disease prevention interventions would reduce the amount of risk factors within a population. This would in turn reduce mortality and morbidity from chronic diseases. One thing that remained unclear is the extent to which promoting health and preventing diseases would reduce expenditure on healthcare and social costs. The other view regarding promoting health and preventing diseases was that it represented a historic shift in peoples’ understanding of diseases and disease processes (Eaton et al, 2002).
The realization of the importance of behavioral change has played a key role in learning how behaviors link with disease onset. This has boosted the acceptance of social scientists as essential partners in health promotion. Modifying social environment helps promote change of behavior. This change is acceptable in the society. There is the need to understand the need to address social factors that affect the health. This can be done through appropriate health promotion models. This might be the next move in the evolution of health promotion (Eaton et al, 2002).
Private Health Insurance
The American health insurance market comprises of two main submarkets; the employer group coverage market and the individual insurance market. The employer plans accounts for about 90% of the private health insurance coverage while the individual market takes the remaining 10%. Persons obtaining individual insurance coverage obtain it directly from commercial health insurers. On the other hand, employers issuing group coverage obtain commercial insurer or self insures their plans. These two distinctions make it clear that there are varying regulations in each submarket of the private health insurance. The primary rule is that individual or employer group policies should be regulated by state insurance laws, but it appears that the private health insurance market regulates its self to certain extents (Murphy and Topel, 2006).
- Eaton, S. B. et al (2002). An Evolutionary Health Promotion. Preventive Medicine 34, 109-118.
- Murphy, K. M. and Topel, R. H. (2006). The value of health and longevity. Journal of Political
- Economy 114(5).
- Pauly, M. V., Herring B. J, and Song, D. (2009). “Tax Credits, the Distribution of Subsidized Health Insurance Premiums, and the Uninsured.” Forum for Health Economics and Policy 5(5).