For example, employees of the federal government who live in New York have a mind-bending 25 plans to choose from.
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And in many areas of the country, the choices are plentiful at healthcare. Aetna and Cigna, which we are comparing here, both insure a very large number of people and rank among the top 10 for sheer size. One distinction is that Aetna is a U. Cigna is a global provider of health insurance for employers in 29 countries. If you work abroad or travel a lot, you'll find that Cigna has a number of international medical Insurance policies.
Rankings of health insurance plans according to consumer satisfaction and other factors have become easy to access and use. But in Vermont, the Cigna plan gets a 3. In Vermont, Aetna rates highly on getting care quickly but falls short on quality of primary-care doctors. Cigna also rates highly on getting care quickly and rates a bit better on quality of primary-care doctors.
The details in the rankings may be important. If you're planning on adding to your family, check the ratings for the company's prenatal and postpartum care.
1900-1920: Sickness Insurance versus Health Insurance
If someone in your family has asthma, check the plan's rating for asthma control and asthma drug management. Many doctors and hospitals take multiple plans, so this may not be a problem. Ask around. It may take some time to gather a list of doctors and winnow it down, but once you do you can call their practices to ask about the insurance plans they accept.
Asking around is a good idea when considering a plan, too. These factors can vary by locale, so a colleague who lives in your area will be best informed. One more tip: If your routine care involves tests or consultations with specialists, make sure that everyone involved in your care takes your insurance plan. Using in-network doctors and services will keep your costs down.
Health Insurance. Pink, noted in About half of these have only recently gone into this field. It is no doubt the interest aroused by the non-profit associations which has induced the regular insurance companies to extend their activities in this way Pink The success of commercial companies was aided by two factors.
First, the competitiveness of Blue Cross and Blue Shield was limited by the fact that their non-profit status required that they community rate their policies. Under a system of community rating, insurance companies charge the same premium to sicker people as they do to healthy people. Since they were not considered to be nonprofit organizations, commercial insurance companies were not required to community rate their policies.
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Instead, commercial insurance companies could engage in experience rating, whereby they charged sicker people higher premiums and healthier people lower premiums. As a result, commercial companies could often offer relatively healthy groups lower premiums than the Blue Cross and Blue Shield plans, and gain their business. Thus, the commercial health insurance business boomed, as shown in Figure 2. Figure 2: Enrollment in Commercial Insurance Plans v.
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Figure 2 illustrates the growth of commercial insurance relative to Blue Cross and Blue Shield. So successful was commercial insurance that by the early s, commercial plans had more subscribers than Blue Cross and Blue Shield. In , Offering insurance policies to employee groups not only benefited insurers, but also benefited employers. During World War II, wage and price controls prevented employers from using wages to compete for scarce labor. Under the Stabilization Act, Congress limited the wage increases that could be offered by firms, but permitted the adoption of employee insurance plans.
In this way, health benefit packages offered one means of securing workers. In the s, two major rulings also reinforced the foundation of the employer-provided health insurance system. First, in the War Labor Board ruled that employers could not modify or cancel group insurance plans during the contract period. Therefore, when negotiating for wages, the union was allowed to negotiate benefit packages on behalf of workers as well. This ruling, affirmed later by the U. Supreme Court, further reinforced the employment-based system.
Perhaps the most influential aspect of government intervention that shaped the employer-based system of health insurance was the tax treatment of employer-provided contributions to employee health insurance plans.
First, employers did not have to pay payroll tax on their contributions to employee health plans. The first such exclusion occurred under an administrative ruling handed down in which stated that payments made by the employer directly to commercial insurance companies for group medical and hospitalization premiums of employees were not taxable as employee income Yale Law Journal , , pp.
While this particular ruling was highly restrictive and limited in its applicability, it was codified and extended in Under the Internal Revenue Code IRC , employer contributions to employee health plans were exempt from employee taxable income. As a result of this tax-advantaged form of compensation, the demand for health insurance further increased throughout the s Thomasson By the s, the system of private health insurance in the United States was well established.
In , nearly 75 percent of Americans had some form of private health insurance coverage. By helping to implement a successful system of voluntary health insurance plans, the medical profession had staved off the government intervention and nationalized insurance that it had feared since the s.
In addition to ensuring that private citizens had access to voluntary coverage, the AMA also was a vocal opponent of any nationalized health insurance programs, suggesting that such proposals were socialistic and would interfere with physician income and the doctor-patient relationship. The MWD bill would have provided comprehensive nationalized health insurance to all Americans. While serious proposals for government-sponsored health insurance were not put forth during the Eisenhower Administrations of , proponents of such legislation worked to ensure that their ideas would have a chance at passing in the future under more responsive administrations.
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They realized that the only way to enact government-sponsored health insurance would be to do so incrementally — and they began by focusing on the elderly Marmor Offering insurance to aged persons age 65 and over provided a means to successfully counter several criticisms that opponents to government-sponsored health insurance had aimed at previous bills. Focusing on the elderly allowed proponents to counter charges that nationalized health insurance would provide health care to individuals who were generally able to pay for it themselves.
It was difficult for opponents to argue that the elderly were not among the most medically needy in society, given their fixed incomes and the fact that they were generally in poorer health and in greater need of medical care. Supporters also tried to limit the opposition of the AMA by putting forth proposals that only covered hospital services, which also stemmed criticism that said nationalized health insurance would encourage extensive — and unnecessary — utilization of medical services. The political atmosphere become much more favorable towards nationalized health insurance proposals after John F.
Kennedy was elected to office in , and especially when the Democrats won a majority in Congress in Passed in , Medicare was a federal program with uniform standards that consisted of two parts. Part A represented the compulsory hospital insurance program the aged were automatically enrolled in upon reaching age Ironically, physicians stood to benefit tremendously from Medicare. Thus, doctors were still permitted to price discriminate by charging patients more than what the program would pay, and forcing patients to pay the difference.
Funding for Medicare comes from payroll taxes, income taxes, trust fund interest, and enrollee premiums for Part B. Medicare has grown from serving In contrast to Medicare, Medicaid was enacted as a means-tested, federal-state program to provide medical resources for the indigent. Unlike Medicare, which has uniform national benefits and eligibility standards, the federal government only specifies minimum standards for Medicaid; each of the states is responsible for determining eligibility and benefits within these broad guidelines.
Thus, benefits and eligibility vary widely across states. While the original legislation provided coverage for recipients of public assistance, legislative changes have expanded the scope of benefits and beneficiaries Gruber In , Medicaid provided benefits for 10 million recipients. By , Growth of Medicare and Medicaid Expenditures Figure 3 shows how Medicare and Medicaid expenditures have grown as a percentage of total national health care expenditures since their inception in The figure points to some interesting trends.
Expenditures in both programs rose dramatically in the late s as the programs began to gear up. Then, Medicare expenditures in particular rose sharply during the This growth in Medicare expenditures resulted in a major change in Medicare reimbursement policies in Medicaid expenditures were fairly constant over the s and s, and did not begin to rise until more generous eligibility requirements were implemented in the s.
By , Medicare and Medicaid together accounted for 32 percent of all health care expenditures in the U. The role of fraternal lodges in insurance declined significantly after See Emery and Emery and Emery Stock companies are required to hold reserves to guard against insolvency see Faulkner , pp. Mutual companies are cooperative organizations in which the control of the company and its ownership rest with the insureds. Mutual companies may be required to have reserves, or to engage in assessment liability in which insureds must pay additional amounts if premiums fall short of claims.
Both stock and mutual companies pay taxes. They required the plans to be non-profit, and to allow free choice of physician by subscribers, and some specified additional requirements. New York was the first state to enact such enabling legislation in , and 32 states had adopted special enabling legislation for hospital service plans by Other states exempted Blue Cross plans by categorizing them strictly as nonprofit organizations Eilers , pp.
See also Inland Steel Co. NLRB F. American Foundation. American Medicine, Volume II. New York: The American Foundation, Anderson, Odin W. Ann Arbor: University of Michigan Press, Centers for Medicaid and Medicare Services. Davis, Michael M. Rufus Rorem. Chicago: University of Chicago Press, Eilers, Robert D.
Homewood, IL: Richard D. Irwin, Inc. Emery, J. Emery, George and J. Herbert Emery. Falk, I. Rufus Rorem, and Martha D. The Cost of Medical Care. Flexner, Abraham. Medical Education in the United States and Canada. Gruber, Jonathan B. Health Insurance Institute. Source Book of Health Insurance Data, New York: Health Insurance Institute, Hedinger, Fredric R. Iowa City: University of Iowa, Henderson, James W. Health Economics and Policy , second edition.
Cincinnati: South-Western, Marmor, Theodore R. The Politics of Medicare , second edition. New York: Aldine de Gruyter, McDavitt, T. Numbers, Ronald L. Baltimore: Johns Hopkins University Press, Pink, Louis H. Journal of American Insurance 16, no. Reed, Louis S. Blue Cross and Medical Service Plans. Washington, D. Public Health Service, Scofea, Laura A. Shyrock, Richard Harrison. The Development of Modern Medicine. Madison: University of Wisconsin Press, Columbus, OH:
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