With the recent news that "Obamacare" health insurance premiums are set to rise an average of 22% next year, the healthcare crisis in the U.S. has once again come to the attention of the taxpaying public.
Officials cite the following reasons for the price increase:
- Fewer insurers willing to participate in the public healthcare market
- Not enough "healthy" people signed up for insurance
- Those who signed up for insurance are sicker than the industry predicted
Although federal subsidies should help most Americans pay for this increase, the central issues surrounding the cost of medical care and the health insurance industry are problems which remain unsolved. This informative article from the nonpartisan group commonwealthfund.org provides an excellent comparison of healthcare in industrialized nations worldwide. The article compares various aspects of healthcare among 11 nations, including the U.S., Canada, Australia, France, Germany, the Netherlands, the United Kingdom, and more.* Major points include:
- The U.S. healthcare system is the most expensive in the world, with the highest per capita health expenditures of $8,508 in 2011. This is nearly $3,000 higher compared with the expenditures of the next highest nation.
- Unlike most other nations, the U.S. does not have universal health coverage, which causes Americans to go without needed health care because of cost.
- Due to the lack of universal healthcare, the U.S. ranks last on measures of equity, because lower-income Americans are far less likely to seek medical care when ill and to get recommended tests, treatments and follow-up care.
The U.S. ranks last overall and has poor scores on all three indicators of healthy lives: mortality amenable to medical care, infant mortality, and healthy life expectancy.
*This study was done prior to full implmentation of the Affordable Care Act, which is discussed in detail below.
Why is healthcare in the United States so expensive? According to investopedia.com, there are several reasons:
- The administrative costs of running the healthcare system are astronomical. An example was discussed by Harvard economist David Cutler on National Public Radio: at Duke University Hospital, there are 1,300 billing clerks, who are needed to determine how to bill to meet varying requirements of multiple insurance companies. The hospital has only 900 beds!
- The cost of prescription drugs in the U.S. is largely unregulated, unlike in most developed nations where the government negotiates prices with drug makers. Unsurprisingly, drug costs are much higher in the U.S. than anywhere else.
- Doctors in the U.S. are afraid of lawsuits and order multiple tests, even when they are certain of a diagnosis. This is a practice known as "defensive medicine," and it results in higher costs in the form of insurance premiums, co-pays, and out-of-pocket expenses. It also increases the burden on taxpayers, who pay for governmental healthcare programs.
- U.S. patients receive a more expensive mix of treatments, like mammograms and MRIs, and are often treated by specialists, who cost more than a primary-care doctor. Wages and staffing costs are also a factor, as is "branding," which occurs when prestigious medical institutions create a brand that everyone wants, and then they name their price.
It's also important to note that the U.S. is also just generally unhealthy compared with much of the world. The Lancet, a U.K. medical journal, reported in June of 2014 that 66 percent of Americans are obese, compared to a 37 percent worldwide obesity rate. Childhood obesity is high as well, with 28.8 percent of boys and 29.7 percent of girls being overweight or obese in the U.S., compared to 14.2 percent of boys and 14.7 percent of girls worldwide. Researchers attribute the obesity rate in the U.S. to excessive calorie consumption and lack of exercise. As of 2012, ischaemic heart disease was the leading cause of death in the world. According to the National Heart, Lung, and Blood Institute, being overweight or obese greatly raises the risk for many health problems, including:
- Heart disease
- High blood pressure
- Type 2 Diabetes
- Metabolic syndrome
In addition to health problems caused directly or indirectly by lack of proper medical care, medical expenses are the number one cause of bankruptcy in the U.S. This Huffington Post article notes a study done by Harvard University which, perhaps more troubling, discovered that 72 percent of those who filed for bankruptcy due to medical expenses had some type of health insurance.
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In an attempt to address the growing healthcare crisis and to provide healthcare for millions of uninsured Americans, President Obama signed the Patient Protection and Affordable Care Act on March 23, 2010. The Act aimed to provide access to affordable health insurance options for all Americans by expanding Medicaid, extending coverage for young adults, expanding coverage for early retirees, and more. The act was also integral in prohibiting denial of coverage based on pre-existing conditions, prohibiting insurance companies from rescinding coverage based on errors or technical mistakes in a customer's insurance application, eliminating lifetime caps on insurance benefits, regulating annual limits on insurance coverage, and establishing consumer assistance programs to help users navigate the health insurance system.
The full text of the Act is available in the U.S. Statutes at Large. A compiled legislative history of the Patient Protection and Affordable Care Act is available in HeinOnline's U.S. Federal Legislative History Library:
Prior to the Patient Protection and Affordable Care Act, the Clinton administration, led by then First Lady Hillary Clinton, proposed a healthcare reform package known as the Health Act of 1993. The goal of the plan was to provide universal healthcare for all Americans. However, opposition to the plan was heavy from several angles, including from conservatives, libertarians, and the pharmaceutical and health insurance industries. Although the final bill was declared dead in 1994, a compiled legislative history on the proposed Act is available in HeinOnline's Taxation & Economic Reform in America Parts I & II:
In addition to the full text of all public laws and compiled legislative histories, HeinOnline contains a wealth of information on the Patient Protection and Affordable Care Act. A search for this phrase across all collections produces thousands of results. There are more than 3,800 items in the Law Journal Library, 2,300 items in the U.S. Congressional Documents, and more than 2,200 results from the Federal Register:
Use the facets located on the left side of the page to include results from one or more collections. Terms matching search criteria are highlighted in yellow; sort results by relevance, number of times cited, and more using the Sort by bar located above the search results. Download a PDF of an article or section using the red PDF icon, or access additional print/download options, email an article or section to another user, or bookmark a result to your MyHein personal research account.
While we might not be able to help our users deal with increasing healthcare costs, we can certainly help with research questions. Contact our support team at (800) 277-6995, email us, or chat with us for assistance searching and navigating in the database.