HCR 422 Module 1 History of U.S. Health Insurance, Medicare, Medicaid and Reform Paper Example

How We Got Here: Employer Insurance, Medicare, Medicaid and Eighty Years of Reform Proposals

Student Name

BS in Health Care Coordination, Arizona State University

HCR 422: Policy and Financial Principles in Health Care Coordination

Instructor Name

Month Day, Year

How We Got Here: Employer Insurance, Medicare, Medicaid and Eighty Years of Reform Proposals

Introduction

The U.S. health insurance system was not designed; it accumulated. Each layer, employer coverage, Medicare, Medicaid and the Affordable Care Act, responded to the gaps left by earlier ones. Understanding that history helps care coordinators explain to patients why coverage works the way it does.

The Rise of Employer-Based Insurance

Private hospital insurance began in the 1930s with Blue Cross plans. With wartime rules freezing pay, companies short of workers sweetened their offers with health coverage instead, since benefits fell outside the wage limits. Tax law then made the arrangement permanent. Thomasson (2003) shows that once the 1954 code settled that employer premiums were not income to the worker, group policies spread to more firms and grew more generous. The result was a system in which most working-age Americans got insurance through a job, leaving out people who were retired, unemployed, self-employed or poor.

The Foundations of Medicare and Medicaid

Those left out were the targets of the Social Security Amendments signed by President Lyndon Johnson in July 1965. Medicare created federal insurance for people 65 and older: Part A covering hospital care, financed by payroll taxes, and Part B covering physician services, financed by premiums and general revenue. Medicaid created a joint federal-state program for certain low-income groups, with states administering it under federal rules and sharing costs. Medicare's design as a social insurance program for all older adults made it popular and durable, while its later growth and Medicaid's expansion over the following decades reflected the political compromises built in at the start (Berkowitz, 2005); Medicaid's design as a means-tested state program made it more variable across states and more politically contested.

Comparing Major Reform Proposals

The proposals moved over time from a single public program toward building on the employer system. Oberlander (2010) argues that the Affordable Care Act passed partly because it avoided disrupting existing coverage for most people, built on the private insurance system and benefited from lessons of the Clinton failure, including letting Congress write the bill.

Lessons for Care Coordination

Coordinators work with patients whose coverage depends on age, income, job and state. A patient who loses a job may lose insurance, one who turns 65 must navigate Medicare's parts and a low-income patient's Medicaid benefits depend on the state. Knowing why the system is fragmented helps coordinators explain it and find coverage for patients who fall through gaps. The history also shows that reform builds on what exists, so coordinators should expect continued change at the margins rather than a single redesign.

Conclusion

American health insurance grew from wartime wage policy and tax law, was patched by Medicare and Medicaid in 1965 and has been reformed incrementally, most recently by the Affordable Care Act. Each layer shapes the work of care coordinators today.

References

Berkowitz, E. (2005). Medicare and Medicaid: The past as prologue. Health Care Financing Review, 27(2), 11-23.

Oberlander, J. (2010). Long time coming: Why health reform finally passed. Health Affairs, 29(6), 1112-1116. https://doi.org/10.1377/hlthaff.2010.0447

Thomasson, M. A. (2003). The importance of group coverage: How tax policy shaped U.S. health insurance. American Economic Review, 93(4), 1373-1384. https://doi.org/10.1257/000282803769206359