Health insurance does not guarantee health care.

 HEALTH INSURANCE STATISTICS

HAVE WE REPLACED ONE PROBLEM WITH ANOTHER?

Health insurance was mostly non-existent before World War II. Because of government imposed wage and price controls and a shortage of labor, large companies offered health insurance as an incentive to attract workers. Many of these companies were self insured and actually paid their employee's health care costs themselves. After the war, these incentives were kept. At that time they were not a large expense because health care costs were realistically priced to the economy and the earning power of most citizens. The first health care crisis that I recall was focused on the elderly retired or elderly who no longer could earn a living. At that time, health care costs still had some relation to the economy and the wages of most citizens. In 1966 Medicare and Medicaid were passed into law. Medicare was financed by a 2.9% payroll tax shared by the employee and employer. Medicaid is financed through the social security administration - the federal government pays 50% and the state pays 50%. Eligibility is determined by each state. Initially Medicare paid prevailing costs as did other insurance providers of the time. This changed in 1984, when due to rising costs, Medicare started paying predetermined reimbursements that were less than regular insurance. This started the practice of cost shifting and an increasing rise in health care costs. Providers added costs not paid by Medicare to the reimbursements paid by regular insurance. This was not widely known, but was done none the less. They also started raising prices to help to raise the negotiated prices from insurance providers and put pressure on Medicaid to raise their limits.

I can give an example from personal experience. One of my sons fell from tree and broke a bone in his shoulder in the early 1990s. I had catastrophic insurance, but not regular insurance. They paid the surgeon but only allowed the anesthesiologist $100 per procedure. There were two procedures. The doctor sent a bill for $1200 less the $200 for a balance of $1000. A friend in the administration department of the hospital found out for me that Medicare paid $110 and Blue Cross and Blue Shield paid $325. There were actually 5 rates, and self-insured or commercial insurance without a contract were the highest. It could be a lengthy story, but to sum it up I ended up paying the doctor what Blue Cross and Blue Shield would pay, $650 minus the $200 paid by my insurance or $450. The situation is probably worse today. I understand the providers' reluctance to take on Medicare directly as it would probably result in a lot of bad publicity.

As of 2015, Medicare had 53 million enrollees, Medicaid had 68 million enrollees for a total of 121 million -this is 37% of the US population. One hundred and thirty nine million, or 43% received health care through their employer .  Twent-two million, or 7%,  pay for own insurance in the private market and 11.7 million through ACA exchanges; 37 million or 11.4% are uninsured. The number of those insured by their employer and those who purchase their insurance has been dropping since the introduction of the ACA.  Most who purchase their own insurance had their policies cancelled due to the mandates for coverage by the ACA. Most small employers had their policies cancelled and had to renegotiate new policies that conformed to the ACA. While boasting the new enrollees in the ACA exchanges many of those were formally insured either by a small employer or paid their own insurance. The real number of the uninsured has not changed, but there are low income people who have gained insurance through Medicaid expansion or subsidized premiums of the ACA. Self-insured and older people who paid their own insurance premium are now uninsured because costs have sky-rocketed or coverage makes the policy unusable. Medicaid expansion encouraged states to raise the number to be covered by increasing the threshold from 100% of the poverty number to 133%. The federal  government pays 100% of the cost of the expansion declining to 90% in 2020. Some states feared that eventually this number will be lowered causing a funding crisis in their state.

Numbers provided by the Kaiser Foundation, U.S. health and human services. We will talk about market solutions soon.