How the American Health System Works

By | March 6, 2018

Contrary to European countries, where health care is the basic right guaranteed by state law, in the United States, the national health system is based health insurance arranged by employers or individuals privately.

In Europe, access to health care is guaranteed to everyone, regardless of the wealth and income, while in America the citizen can only be treated if he has previously taken out insurance cover or has enough money to meet the costs of the operation, the visit or the hospitalization. Of course things, today, are a little more nuanced, both in Europe and in America, but it is from here – that is, from the basic philosophy – that we must start to catch the differences.

The introduction of a principle of universalistic coverage system also in the United States, at least for the purposes, for a large part of the population, dates back to the reforms introduced in the 60s by President Lyndon Johnson, never changed since then until the Obamacare of 2010. In fact, JFK’s successor was the first to introduce, by integrating the Social Security Act of Franklin Delano Roosevelt, a semi-universal health care system on which the American health system is based:  Medicare and Medicaid.

The Medicaid – introduced in 1965 – is basically a federal health care program that helps individuals and low-income families to bear the costs of health insurance, covering – depending on the declared income – a more or less relevant. The program is financed by the federal government but is fully managed by the states. Although the adherence to Medicaid, according to the law, is essentially voluntary, all the American states have now adopted it. The last one to do it was Arizona in 1982. What did Barack Obama do in 2010, when he has signed the executive order that would have led to the approval of Obamacare?

He extended the right to insurance coverage to income brackets that previously did not fall within the criteria established by Medicaid. It has introduced tax incentives to encourage the stipulation of health policies. It introduced the obligation for employers of companies with more than 50 employees to contribute to the expenses for the purchase of the policies by its workers. He has banned insurance companies from denying insurance coverage and assistance with certain diseases. He introduced fines for the citizen who does not take out an insurance policy. The result is that – together with the expansion of the so-called Medicare – between twenty and thirty million more Americans today have access to treatment. 

The Medicare – which is the other leg on which the American health care system – is a medical insurance program administered by the US government, which essentially covers those over 65 and people with disabilities, regardless of declared income. Funded at federal level thanks to the contributions of workers and employers, and introduced as Medicaid by Lyndon Johnson, Medicare essentially obliges citizens – by introducing a series of heavy penalties – to enroll for a part called A (hospital insurance) and a part called B (medical insurance). The costs of public programs now absorb almost half of the state budgets.

It is estimated that about 4/5 of American citizens today have a private insurance for medical expenses in their pocket. Most of these – about 60%, just under 200 million people – receive this coverage thanks to the coverage provided by law by employers.

Only a minority, that is, expressly needs public aid to be able to take out insurance. This is why Medicare and Medicaid were born. There is also to say that the possibilities of insurance coverage (which costs on average to the employer 10 thousand dollars per year) vary considerably from case to case. Employers usually negotiate insurance plans that are offered to their employees, some policies are able to cover any healthcare costs (but with obviously high monthly costs), others are more deductible, with lower premiums, forcing US citizens to pay from your own pocket for routine services. In short, there is a great variety of situations and possible coverages.

What needs to be clarified is that not being insured does not mean being completely deprived of medical care. Anyone can receive emergency care at a hospital or pay directly for assistance at a doctor’s or health institution’s office, even if they do not have medical insurance. However, uninsured persons are often subject to a wait and subordination with respect to the insured, so that their illness can reach a more advanced stage.

Among the reasons that explain the health reform of Obama (which – far from being socialist – has simply extended the right to health coverage to a wider audience) there is one that – along with the unsustainable costs of a system too unbalanced on the private – deserves to be considered: the fact that unforeseen medical expenses are universally considered the main cause of the bankruptcy of tens of thousands of American families. 

Obama’s expansion of Medicaid to new low-income categories previously excluded from public aid has always been one of the controversial objectives of the Republican right. The intention of the American Health Care Act that (with the help of the Congress) that would like to introduce Donald Trump is to phase out or reduce subsidies for poor Americans, replacing it with a partial tax credit (based on the age of stipulate) that – according to the prestigious American Medical Association – would end up leaving some tens of millions of low-income American citizens without coverage.

According to the  American Association of Retired Persons  – one of the largest “union” of pensioners in America – the increase in the tax credit as the age of the stipulating citizen progresses – in addition to being unfair because it is free from income – is not however sufficient to guarantee adequate coverage for a sufficient number of people . Another widespread criticism of the so-called Trumpcare is that a clean cut in insurance coverage in America would inevitably lead to a progressive increase in premiums to be paid, with distorting and counterproductive effects also for companies and employers. According to a bipartisan study carried out by a congressional commission 24 million Americans – who today can access federal subsidies to buy insurance – would find themselves without coverage from here to 2026, bringing US citizens to a total of 52 million without medical umbrellas of sorts.

There is also a great concern among pharmaceutical companies and insurance companies: how much will turnovers turn against a possible mass reduction of insurance coverage? Will the promise of a tax cut made by Trump suffice to offset the losses produced by the health counter-reform imagined by Trump?

To answer these questions it will be necessary to wait a few weeks when Trump’s executive orders will begin to be discussed at Congress. Where the Republican and Democratic opposition – behind which there are often lobbyist interests linked to big pharma or insurance – could prove more tenacious than expected.

Leave a Reply

Your email address will not be published. Required fields are marked *