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What kind of changes are coming in social health insurance?

A health care system can be broadly defined as doctors and other service providers and whoever pays them and the ways in which their services are paid for. Changes are coming to health care, our elected officials and appointed bureaucrats are already making progress in changing what we have now. We need to look at the:

  • Current system
  • Changes already starting to happen
  • Possibilities we may see down the road

Social Health insurance can be defined as one administered by the government with benefits and participation requirements set by law. It is funded by taxes levied on a population. It essentially replaces private insurance and is run by the state.

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What is the social health insurance model now?

The traditional type of health insurance is known as fee for service. With this type of plan, you choose your doctor and hospital and your insurance company pays for part of the cost according to a schedule you agree to based on the amount you pay in premiums. There are usually two parts to a fee for service policy. One covers any:

  • Basic doctors’ visits
  • Hospital stays
  • Prescriptions
  • Medical devices

A second component would be what is called “major medical” insurance to cover catastrophic illness and long-term care.

A second type of insurance used today is the coinsurance model. It splits the cost of your health care bills between you and the insurance company and specifies a percentage of the costs you will pay and what part the insurance company will cover. An 80/20 split, with you paying 20%, is a common arrangement. The amount of your percentage depends on the amount of your premium, higher premiums means a lower percentage you will pay. There may be deductibles and copay amounts associated with this type of policy.

Another common type of policy is the copay policy. In these plans, you pay a set amount for each service you receive and the company pays the balance. As with coinsurance, deductibles and copay amounts are often a part of such policies.

What they all have in common is that they are agreements between individuals or businesses and insurance companies to secure medical services from health care providers. There are government regulations affecting these agreements, but for the most part the business is between those two parties.

Where changes are already in the works?

The Affordable Care Act (the Act) was passed by Congress in 2010 and is being incrementally implemented over the next several years. It mandates, among other things, that citizens purchase health care or be fined. Health insurance companies are being told:

  • Whom they must insure
  • What kind of coverage they have to provide
  • What they can charge for it

It has no single payer or public option yet, but government involvement in the industry is greatly increased.

What do other countries do about health insurance?

Many European countries have some mix of nationalized and private health care insurance.

Germany is about 80% publicly funded and only a specific subset of Germans may opt for private insurance. Over utilization is causing financial strains and the country is looking for ways to control ever increasing costs.

England on the other hand has its National Health Service, which provides universal health care to virtually all of its citizens. The private insurance sector is very small and limited in what it provides there.

Japan, Sweden, and France all have a universal health insurance system with negligible private involvement. France has extensive regulations, which are pushing the costs of delivering heath care up at an alarming rate.

Nearly all nations with heavy government involvement are facing impending financial crises. Business Week has a good story on European health care at http://www.businessweek.com/globalbiz/content/jun2007/gb20070613_921562.htm.

So where are we going in the long run?

It is hard to say where we are going. There are pending court cases challenging key aspects of the Affordable Care Act, but it almost certain that the days of primarily private insurance in the United States are numbered.

The growth of public sector employees already has state involvement, if not control, growing at a rapid pace. It is likely that some form of assistance managed by the government for low income and disabled persons is here to stay and will grow in the future.

To find health insurance quotes online quickly and easily, simply type your zip code into the free box on this page to compare rates now!

 

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