Introduction
Throughout U.S. history, America’s healthcare system has been subjected to constant change as it evolved from a simple system of home remedies to a complex and scientific system. These changes, of course, impact the insurance system, as the first insurance was the foundation of what we have today. As the healthcare insurance system expanded, issues began to surface, as there are still large numbers of uninsured people, mainly due to the rising cost of healthcare in the U.S. To address these issues, new healthcare reforms were introduced. Medicaid, Medicare, and the Patient Protection and Affordable Care Act (PPACA) are examples of legislation developed to help ease the burden Americans experience when seeking access to healthcare. Despite the intention behind the legislation and the general benefits these laws created, the application of these programs left many gaps in equitable access to healthcare for Americans. In order to close these equity gaps, we, as a society, must examine the concept of healthcare insurance, its availability, and its effects on the public when it is not readily available, as well as uncover the legal and political impediments preventing the healthcare insurance system in the U.S. from meeting the needs of the people.
Health Insurance
Health insurance was introduced in the 1930s during the Great Depression when the actual cost of obtaining healthcare was relatively low as medical technology was not as advanced as it is today. In the past, many had medical visits in their residence rather than visiting medical clinics. Additionally, as workers’ rights movements were beginning to occur, early workers’ compensation insurance began to appear. The early versions of insurance did not include physicians, as many refused to be a part of this system. Eventually, many employers began to offer health insurance plans that many employees favored as they were separate from their wages, which prevented their wages from being lowered due to insurance. Today, it is a big business with “an estimated 138,682 licensed health insurance agents working in the U.S.” (Lichtenstein, 2023). The concept of healthcare insurance developed as it became more common, and “by 1960, over 68 percent of the U.S. population was estimated to have some form of private health insurance” as it was offered by their employers (Lichtenstein, 2023).
What is Health Insurance?
Health insurance is a plan or policy made between an individual and their insurance company/insurer that is a form of protection to help decrease the cost of medical events that might occur unexpectedly. It is there whenever an individual needs it, as accidents or instances when they need insurance cannot be predicted. When an individual purchases a plan, they receive medical coverage as outlined in the plan. When an individual has insurance, they usually will pay a monthly rate (premium), copayments (other out-of-pocket fees), or have to meet deductibles every year before the effects of insurance coverage occur. Health insurance costs vary depending on the plan and individual, as many factors can affect their health insurance costs.
Why us it Important?
There are many reasons to have health insurance, as it is critical to living a productive, secure, and healthy life. Health insurance is often associated “with [lowering] death rates, better health outcomes, and improved productivity” (“The Importance of Health Coverage,” 2019). Additionally, coverage “reduces individuals’ and families’ financial burden and risk by reducing annual out-of-pocket spending and essentially eliminating catastrophic expenditures” (“The Importance of Health Coverage,” 2019). People with medical needs, such as chronic illness diagnoses, who are enrolled in health insurance plans saw a significant improvement in their financial health. Accessing and possessing affordable health insurance is beneficial to all Americans; however, more than 28 million individuals in the US still lack coverage, putting their physical, mental, and financial health at risk.
Medicare vs. Medicaid
On July 30, 1965, President Lyndon B. Johnson signed the Medicare and Medicaid Act, also known as the Social Security Amendments of 1965, into law. It established Medicare, “a health insurance program for the elderly, and Medicaid, a health insurance program for people with limited income” (“Medicare and Medicaid Act,” 2022). With the enactment of Medicaid and Medicare, many gaps in health insurance, such as health care for elderly and low-income families, were addressed.
What is Medicare?
Medicare is “a federally facilitated health insurance program for Americans who are 65 or older and some younger people with disabilities or diseases such as end-stage renal disease (ESRD)” (“What Exactly Are Medicaid and Medicare?,” 2021). Medicare covers those who “have received at least 24 months of Social Security disability benefits or a disability pension from the Railroad Retirement Board (RRB)…[and/or] have amyotrophic lateral sclerosis (Lou Gehrig’s disease)” (“What Exactly Are Medicaid and Medicare?,” 2021). On the other hand, Medicare does not cover every healthcare need. Without additional insurance or being included in a low-income bracket, an individual will probably still pay some premiums, deductibles, and copays. Services, such as dental and vision, are also not covered, and each coverage will depend on one’s plan. Before turning 65, most people have insurance through their employer or an individual health insurance policy. When one turns 65, they can use Medicare as their only insurance option or in combination with another insurance.
Medicare: Pros
There are many positive aspects to Medicare. It provides coverage to many aging Americans as well as younger Americans with disabilities. The cost of having Medicare is also low, as those who qualify pay only a small out-of-pocket amount every month. In 2021, the standard premium was $148.50 per month. Additionally, Medicare allowed Americans to have greater access to prescriptions. Furthermore, many pharmaceutical companies began to invest in the development of drugs specifically for seniors after seeing the potential in the Medicare market.
Medicare: Cons
With Medicare, large amounts of money must be used to ensure all of these benefits. In 2020, around $858.5 billion was used for Medicare, and it is estimated that it might increase to over $1 trillion. This would then result in increased taxes, as a portion of Medicare funds come from payroll taxes. The current Medicare tax rate is set at 2.9%, which is split between employers and employees. Additionally, an extra 0.9% is added to those who make more than $200,000. This meant that a large amount of money must come out of each paycheck to sustain Medicare.
What is Medicaid?
Medicaid is “a federal program administered by state governments, helps provide health coverage to eligible Americans with limited incomes” (“What Exactly Are Medicaid and Medicare?,” 2021). States can determine eligibility, set payment rates, and decide what Medicaid covers outside mandatory eligibility groups, such as low-income families. Additionally, they must decide what certain services are covered through their plan, as there are some federal standards that every plan must meet. They must cover “inpatient and outpatient hospital services, home healthcare for eligible individuals, nursing facility services for individuals over age 21, lab and X-ray services, and federally qualified health center (FQHC) services and ambulatory services” (“What Exactly Are Medicaid and Medicare?,” 2021).
Medicaid: Pros
Having Medicaid allows many to receive affordable healthcare since, in the past, many could not afford healthcare insurance due to their income. With Medicaid, those with lower incomes can now afford healthcare, and in some situations, coverage is offered free of charge. Additionally, Medicaid offers many mandatory benefits, including but not limited to patient hospital services, outpatient hospital services, nursing facility services, physician services, laboratory and x-ray services, certified pediatric and family nurse practitioner services, and transportation to medical care. Many of these mandatory benefits are essential for overall health and wellness for individuals and families, such as physician visits, as these prioritize health.
Medicaid: Cons
Unfortunately, there are also drawbacks, such as limited healthcare provider options for those with Medicaid. There are many providers who do not accept Medicaid as “reimbursement rates are…lower than what many medical providers are accustomed to billing” (Martin, 2023). Additionally, there are coverage limitations as sometimes Medicaid will not consider the procedure or service, which results in patients having to forgo the treatment or pay out-of-pocket. Furthermore, Medicaid only provides coverage to certain groups of people that meet their specific requirements. This then led to the Affordable Care Act, also known as Obamacare, which aimed to provide affordable health coverage and provide primary coverage to all Americans. The ACA allowed the expansion of Medicaid to address issues like the “coverage gaps” that many uninsured faced. Those with “coverage gaps” do not qualify for Medicaid but do not earn enough to have insurance, which results in them being in a difficult situation. This issue was present when Medicaid was enacted, but the ACA aimed to fix this issue.
On July 30, 1965, President Lyndon B. Johnson signed the Medicare and Medicaid Act, also known as the Social Security Amendments of 1965, into law. It established Medicare, “a health insurance program for the elderly, and Medicaid, a health insurance program for people with limited income” (“Medicare and Medicaid Act,” 2022). With the enactment of Medicaid and Medicare, many gaps in health insurance, such as health care for elderly and low-income families, were addressed.
What is Medicare?
Medicare is “a federally facilitated health insurance program for Americans who are 65 or older and some younger people with disabilities or diseases such as end-stage renal disease (ESRD)” (“What Exactly Are Medicaid and Medicare?,” 2021). Medicare covers those who “have received at least 24 months of Social Security disability benefits or a disability pension from the Railroad Retirement Board (RRB)…[and/or] have amyotrophic lateral sclerosis (Lou Gehrig’s disease)” (“What Exactly Are Medicaid and Medicare?,” 2021). On the other hand, Medicare does not cover every healthcare need. Without additional insurance or being included in a low-income bracket, an individual will probably still pay some premiums, deductibles, and copays. Services, such as dental and vision, are also not covered, and each coverage will depend on one’s plan. Before turning 65, most people have insurance through their employer or an individual health insurance policy. When one turns 65, they can use Medicare as their only insurance option or in combination with another insurance.
Medicare: Pros
There are many positive aspects to Medicare. It provides coverage to many aging Americans as well as younger Americans with disabilities. The cost of having Medicare is also low, as those who qualify pay only a small out-of-pocket amount every month. In 2021, the standard premium was $148.50 per month. Additionally, Medicare allowed Americans to have greater access to prescriptions. Furthermore, many pharmaceutical companies began to invest in the development of drugs specifically for seniors after seeing the potential in the Medicare market.
Medicare: Cons
With Medicare, large amounts of money must be used to ensure all of these benefits. In 2020, around $858.5 billion was used for Medicare, and it is estimated that it might increase to over $1 trillion. This would then result in increased taxes, as a portion of Medicare funds come from payroll taxes. The current Medicare tax rate is set at 2.9%, which is split between employers and employees. Additionally, an extra 0.9% is added to those who make more than $200,000. This meant that a large amount of money must come out of each paycheck to sustain Medicare.
What is Medicaid?
Medicaid is “a federal program administered by state governments, helps provide health coverage to eligible Americans with limited incomes” (“What Exactly Are Medicaid and Medicare?,” 2021). States can determine eligibility, set payment rates, and decide what Medicaid covers outside mandatory eligibility groups, such as low-income families. Additionally, they must decide what certain services are covered through their plan, as there are some federal standards that every plan must meet. They must cover “inpatient and outpatient hospital services, home healthcare for eligible individuals, nursing facility services for individuals over age 21, lab and X-ray services, and federally qualified health center (FQHC) services and ambulatory services” (“What Exactly Are Medicaid and Medicare?,” 2021).
Medicaid: Pros
Having Medicaid allows many to receive affordable healthcare since, in the past, many could not afford healthcare insurance due to their income. With Medicaid, those with lower incomes can now afford healthcare, and in some situations, coverage is offered free of charge. Additionally, Medicaid offers many mandatory benefits, including but not limited to patient hospital services, outpatient hospital services, nursing facility services, physician services, laboratory and x-ray services, certified pediatric and family nurse practitioner services, and transportation to medical care. Many of these mandatory benefits are essential for overall health and wellness for individuals and families, such as physician visits, as these prioritize health.
Medicaid: Cons
Unfortunately, there are also drawbacks, such as limited healthcare provider options for those with Medicaid. There are many providers who do not accept Medicaid as “reimbursement rates are…lower than what many medical providers are accustomed to billing” (Martin, 2023). Additionally, there are coverage limitations as sometimes Medicaid will not consider the procedure or service, which results in patients having to forgo the treatment or pay out-of-pocket. Furthermore, Medicaid only provides coverage to certain groups of people that meet their specific requirements. This then led to the Affordable Care Act, also known as Obamacare, which aimed to provide affordable health coverage and provide primary coverage to all Americans. The ACA allowed the expansion of Medicaid to address issues like the “coverage gaps” that many uninsured faced. Those with “coverage gaps” do not qualify for Medicaid but do not earn enough to have insurance, which results in them being in a difficult situation. This issue was present when Medicaid was enacted, but the ACA aimed to fix this issue.
The Patient Protection and Affordable Care Act (PPACA or ACA)
The Affordable Care Act (ACA), also known as Obamacare, was signed into law in 2010 in hopes of providing “affordable health insurance coverage for all Americans…[and] protect consumers from insurance company tactics that might drive up patient costs or restrict care” (Roland, 2019). It looked to expand the theoretical benefits found in Medicare and Medicaid to every American.
Pros
On the positive side, the ACA made health care more affordable by providing insurance coverage to the uninsured. The law allows those who are uninsured to receive a copayment or coinsurance rate that allows them to partially pay the total price of a physician visit, hospital stay, or prescription drug. This way, people who struggle with the full cost of a medical visit will receive assistance for their medical bills, which will allow them to get the care they need.
Additionally, in 2014, people with preexisting health conditions can no longer be denied coverage based on preexisting health conditions. In the past, individuals suffering from chronic or debilitating medical conditions were often prevented from obtaining coverage. However, with the ACA, these individuals would be able to receive the medical care they need as insurance companies cannot limit benefits for their condition or refuse to cover treatment for their pre-existing condition.
Furthermore, prescription drugs cost less, as the ACA aimed to make prescription drugs more affordable for everyone. Before the ACA, many people, particularly senior citizens, could not afford all their medications. However, according to the Centers for Medicare and Medicaid Services press release in 2017, Medicare beneficiaries saved over $26.8 billion for prescription drugs under Obamacare. With the ACA enacted, the number of prescription and generic drugs covered by the ACA is growing every year. This will assist those who need these medications but have financial difficulties as it helps pay for prescription drugs and medications.
Through the ACA, a specific program, the Pregnancy Assistance Fund Program (PAF), was also started lasting ten years from 2009 to 2019. This program aimed to benefit those who were either expectant or parenting individuals by having a $25 million per year competitive grant program for states. The Office of Population Affairs, which was in charge of this program, funded 32 states, and the funds were used to “establish, maintain, or operate expectant and parenting student services in high schools, community service centers, and/or institutions of higher education, improve services for pregnant women who are victims of domestic violence, [as well as] increase public awareness and education concerning the services available” (“About the Pregnancy Assistance Fund Program,” 2019). Through this program, around 110,000 expectant and parenting families and individuals could receive various services that assist them. Through data analysis, participants in this program encountered many positive outcomes, such as “reductions in dropping out of high school, improvements in high school graduation, acceptance into institutions of higher education, and reductions in subsequent unintended pregnancies” (“About the Pregnancy Assistance Fund Program,” 2019). However, there is also a negative side that accompanies the positive.
Cons
The ACA went a long way in providing access to health insurance for many Americans, but there are still significant issues with its practical application. With the ACA, many people now have to pay higher premiums, the amount one pays for their health insurance every month. Insurance companies providing a more comprehensive range of benefits and covering people with preexisting conditions have caused premiums to rise for everyone, including those who received health insurance benefits under traditional channels (employer-sponsored policies).
Additionally, taxes are increasing due to the ACA. The increase mainly affects those with higher incomes. Furthermore, several new taxes were passed to help pay for the ACA. In order to raise revenue, the ACA created many new taxes on health insurers, pharmaceutical companies, and manufacturers of medical devices, including new taxes on many medical devices and pharmaceutical sales. Over ten years, it is estimated that taxes will rise by $813 billion due to the ACA.
Despite the positive outcomes, the ACA has been highly controversial, as many object to the increase in tax and higher insurance premiums needed to be paid for Obamacare.
Recently, 40 states and Washington, D.C. have adopted the Medicaid expansion, as shown in Figure 1. Individuals living in states without Medicaid expansion often fall into a “coverage gap” because they earn too much to qualify for Medicaid but not enough to qualify for Marketplace premium tax credits, “a refundable tax credit designed to help eligible individuals and families with low or moderate income afford health insurance purchased through the Health Insurance Marketplace, also known as the Exchange” (“Questions and Answers on the Premium Tax Credit,” 2022).
The Affordable Care Act’s Medicaid expansion allowed Medicaid coverage to expand to nearly all adults with “incomes up to 138% of the Federal Poverty Level ($20,120 for an individual in 2023)” (“Status of State Medicaid Expansion Decisions,” 2023). Due to Medicaid expansion, more than two million people, mainly from underserved communities, gained coverage. This is a massive step towards reducing the number of uninsured as this expansion allows many more people to gain coverage, especially those who struggle with “coverage gaps.”
Many U.S. Residents Remain Uninsured
Why do they remain uninsured?
Despite creating insurance such as Medicaid, Medicare, and the ACA, many Americans remain uninsured. Before the enactment of Medicare and Medicaid, more than 34 million people (about 13 percent of the population) remained uninsured. Unexpectedly, the numbers grew over the next ten years. In 2006, 47 million Americans (15.8 percent of the population) were uninsured, while in 2010, this number rose to around 47 million people (16 percent of the entire population) before dropping slightly due to the ACA.
The number of uninsured nonelderly individuals dropped from 46.5 million in 2010 to 26.7 million in 2016. Most of the coverage gains “were larger among nonelderly Hispanics, Asians, low-income individuals, and those in working families” (Tolbert et al., 2023). Although this number increased slightly in the years following, an expansion in Medicaid coverage in 2021 allowed figures to return to pre2017 levels. In 2021 around 27.5 million people remain uninsured, but this number is still too many.
One of many reasons people remain uninsured includes “families who made too much money to qualify for Medicaid but not enough money to purchase health insurance” (Lichtenstein, 2023). Those individuals would then fall into a “coverage gap,” which puts them in a difficult situation as they are unable to receive benefits from Medicaid or other health insurance. Additionally, many do not have access to coverage due to their job, as not all employers offer health insurance coverage.
In 2021, around 64.4% of uninsured workers were either working for an employer that did not offer health benefits or for an employer that offered coverage at a high cost. Furthermore, some people remain in states that did not expand Medicaid as it varies across states.
As of November 2022, 40 states and Washington. D.C. “had adopted the ACA Medicaid expansion, although only 39 states had implemented the expansion in 2021” (Tolbert et al., 2023). Lawfully present immigrants living in the U.S. “must meet a five-year waiting period after receiving qualified immigration status before they can qualify for Medicaid” (Tolbert et al., 2023). However, undocumented immigrants are ineligible for Medicaid coverage, causing many to be uninsured. Despite policy efforts, such as the expansion of Medicaid, to improve the affordability of coverage, many are still uninsured due to various reasons.
Implications of being Uninsured
Individuals without insurance coverage have worse access to care than insured people. Studies repeatedly demonstrate that “uninsured people are less likely than those with insurance to receive preventive care and services for major health conditions and chronic diseases” (Tolbert et al., 2023). In 2021, nearly half of the nonelderly uninsured individuals had not seen a doctor or health care professional in the past 12 months, while only 18.2% with private insurance and 13.1% with public coverage had gone without medical treatment in that year.
For elderly adults without coverage aid, around 21% said that they went without necessary care in the past year because of the cost. In comparison, only 5% of individuals with private coverage and 6.1% with public coverage faced this problem. Due to their lack of coverage, the uninsured face many barriers to healthcare.
Uninsured individuals are more likely than those insured to lack confidence in their ability to afford medical costs and significant medical expenses or emergencies. More than three-quarters (75.2%) of uninsured nonelderly adults say they are very or somewhat worried about paying medical bills if they get sick or have an accident, while only 45.9% of adults with Medicaid/other public insurance and 44.3% of privately insured adults. Additionally, the uninsured are “more likely to face negative consequences due to medical bills, such as using up savings, having difficulty paying for necessities, borrowing money, or having medical bills sent to collections resulting in medical debt” (Tolbert et al., 2023).
What is Next?
Addressing disparities in healthcare is necessary from an equity standpoint, and it is important to improve the nation’s overall health and prosperity. The federal government “identified health equity as a priority and has since launched initiatives to address disparities…[and] alongside the federal government, states, local communities, private organizations, and providers have engaged in efforts to reduce health disparities” (Ndugga & Artiga, 2023). Thus, many steps and actions must be taken.
A possible step would be allowing the expansion of Medicaid to spread to other states. This will benefit those in “coverage gaps” as it would further increase eligibility for coverage among the remaining uninsured for all groups. States, such as Wyoming, Kansas, Texas, Wisconsin, Tennessee, Mississippi, Alabama, Georgia, South Carolina, and Florida, did not allow the expansion of Medicaid, which puts over 2.1 million people in the “coverage gap,” contributing to the number of uninsured. One main obstacle for these states to expand Medicaid is that many Republican lawmakers at the state level argue “that the Medicaid expansion is an overstep of the federal government, criticizing the amount of spending the government is doing rather than letting private insurers navigate the market themselves” (Neukam, 2023). These states should be reminded of the importance of allowing low-income individuals suffering from “coverage gaps” to receive insurance to ensure healthy individuals throughout America. Additionally, without the actions from the governmental level, not much can be done for all individuals falling into “coverage gaps.” Allowing private insurers to navigate the market themselves will not ensure that those currently uninsured will be assisted with coverage and receive the healthcare that they deserve.
Additionally, it is essential to increase coverage to narrow disparities by enrolling people eligible for Medicaid coverage; these opportunities would further increase if additional states adopted Medicaid expansion. As of today, “The American Rescue Plan Act of 2021 encourages non-expansion states to take up the expansion by providing an additional temporary fiscal incentive for states to newly implement the ACA Medicaid expansion” (Rudowitz et al., 2021).
Since most uninsured people are eligible for Medicaid coverage, outreach and enrollment efforts could increase coverage and lead to fewer coverage disparities. In the present day, this step is already in action as the Biden Administration “increased funding for Navigators for the 2022 Open Enrollment Period to assist with outreach and enrollment efforts, contributing to record levels of Marketplace enrollment in 2022, and has made an additional investment of $98.9 million in Navigator funding for the 2023 Open Enrollment Period” (Artiga et al., 2023). When preventing people from receiving coverage losses and closing remaining gaps in coverage, which could be achieved through Medicaid expansion, long-standing health disparities are being addressed.
Research shows that having “health insurance makes a key difference in whether, when, and where people get medical care and ultimately how healthy they are” (Artiga et al., 2023). Thus, for the health of all U.S. residents, it is a crucial issue occurring throughout history that needs to be solved.
While these solutions cannot be easily or quickly done, federal and state policymakers have several options to help millions of people keep or gain coverage, increasing opportunities for everyone to live the healthiest life possible, no matter who we are, where we live, or how much money we make; the core of health equity.
Works Cited
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