U.S. Health Care System

The U.S. Health Care System

The U.S. health care system is one of the largest and most complex in the entire world. The total health care spending in the U.S. is over $2.5 trillion per year and over $20,000 a year for a family of four. This lesson will go over the major points and concepts involved with respect to our health care system.

Costs, Quality, and Access

The reasons the costs I mentioned before are so high are numerous. Let's face it, one reason is the fact that doctors have to go through a lot of training and education to help people as much as possible. Couple that now with ever increasing tuition costs necessary to educate a doctor who may one day serve you. But that's only one part of it all.

The drugs that doctors use to treat you are many times so expensive because it may take over a decade and hundreds of millions of dollars to research, develop, approve, and market one single little drug found in the pill in a person's hand - a pill that may be used to treat chronic, or long-term, problems like obesity that's on the rise in the U.S. Such chronic conditions definitely raise the cost of health care for everyone.

Furthermore, the equipment and technologies used to diagnose and treat diseases are no less expensive to develop, buy, and train a doctor to use. An ever increasing aging population demanding access to good quality health care also strains the budgets of our system. And, of course, the desire for health insurance companies and health care providers to make money adds more to the equation here. All of these factors raise the costs associated with our health care system.

Until very recently, the amount of people without health insurance was quite staggering. Literally millions of people had no health insurance at all or were underinsured and thus did not get the quality of care they may have needed. That's because underinsured individuals may have policies that don't cover every type of service or may have ones with high out-of-pocket costs.

As of this writing, the very recent roll-out of the Affordable Care Act (a.k.a. 'Obamacare') has tried to improve the cost and access to quality health care, but it is far too early to be sure what impact this law has had on not only access to quality health care but decreasing the costs of our health care system on the nation as a whole. It may take years, if not decades, to fully appreciate this law's positive and negative impacts on society.

New Developments for U.S. Health Care

The Affordable Care Act (ACA) changed many things with respect to our health care system and health insurance plans. It has made sure that insurers can't cancel your coverage because of a simple mistake on your part. It has kept young adults, under the age of 26, on their parent's health care plan if they cannot get insurance for themselves.

ACA ensures that people cannot be denied benefits due to a pre-existing condition, and it has ended lifetime limits on coverage for most benefits. People can shop for new plans that include the ACA rules on so-called exchanges, or health insurance marketplaces, in order to figure out what kind of health insurance plan is best for them given their financial abilities and health care needs.

HMOs, PPOs, POS, HSA, Medicare, Medicaid

Overall though, Americans have many different types of insurance plans and programs to choose from, including the ones found on the new health care exchanges. One choice is a managed care plan. This is a type of health insurance program that coordinates the financing and delivery of health care services for its enrolled members in order to provide care at the lowest possible cost and highest possible quality. The three types of managed care plans include HMOs, PPOs, and POS plans.

HMOs, or health maintenance organizations, are prepaid health insurance plans that pay for health care received only from within a specified network (unless it's an emergency). A primary care physician (PCP) coordinates most of the care you receive and sends you to a specialist if they deem it necessary. HMOs are usually cheaper but more restrictive plans when compared to PPOs.

PPOs, or preferred provider organizations, are prepaid health insurance plans where the patient can go to any provider they want but pay higher amounts if they use a provider out of their network. PPO plans, unlike HMOs, allow plan members to visit other specialists without a doctor's approval. But if those specialists are outside their plan's network, the plan member will have to pay higher out-of-pocket costs. In general, PPOs charge more but offer more flexibility than HMOs to plan members.

A POS is a point of service plan, and it is one that covers treatment by an HMO doctor but allows a plan member to get treatment from elsewhere and still receive partial coverage. It's a mix of an HMO and a PPO, one where you still get most of your care from the more limited HMO network.