From the May 2008 Stockholm Network's Newsletter on Health and Welfare
May 14, 2008
by Catherine M. Fisher
Contrary to the popular belief that the burdens of health care expenditures are placed entirely on American citizens, the United States government spent over $700 billion on health care expenditures in 2006. Recent data from the National Health Expenditure Accounts depicts the burden of health care expenditures The major components are out-of-pocket payments (12.2%), private insurance (34.4%), and major federal, state, and local government health care expenditure (33.8%). Although private and out-of-pocket expenditures are the bulk of all health expenditures in America, major government expenditures are equally as significant to the health care system.
Established in 1966, Medicaid and Medicare provided the first nationalised health care system and have continued to be the primary safe guards for public health in the United States. These programmes focus on providing access to health care and health insurance for American citizens who may not have the ability to procure private health care options. Medicaid is a federal and state initiative that focuses on providing health insurance and longterm care to low income citizens. It also provides health care services for the blind and disabled, children under 21, non-citizens that need emergency medical assistance and those that receive supplemental security income. In 2006, over 38 million Americans received $256.5 billion worth of services from Medicaid.
As a safeguard to protect America's aging citizens, Medicare is a federal initiative that focuses on providing health insurance to American citizens of the age 65 or older, and under the age of 65 with certain disabilities and illnesses. In 2006, over 43 million Americans received $408.3 billion worth of services from Medicare.
The most interesting feature of Medicare is the programme's integration of private health care into the federal programme. Part C of Medicare – Medicare Advantage – provides beneficiaries with the opportunity to receive Medicare benefits through private health insurance plans, and Part D – Medicare Prescription Drug Coverage – provides beneficiaries with several private stand-alone prescription drug plans (PDPs) and Medicare Advantage prescription plans (MA-PDs). In 2006, 16% of the Medicare beneficiaries were enrolled in Medicare Advantage plans or Medicare Prescription Drug Coverage. These options provide Medicare beneficiaries with the freedom to use public health care expenditures in a method most comfortable for them, so that they can obtain the best coverage for their needs.
The United States has a long tradition of capitalism and private industry, and ignoring this when reforming the American health care system would not help the uninsured. Instead of viewing the private and public health care systems as separate entities, it is more beneficial to see these health care systems as equal partners trying to achieve better health care in America. An overhaul of the public health care system's focus and target goals is critical for this partnership to work. In the current state, the public health care system focuses on very niche groups in American society. A comprehensive policy reform would shift the public health care systems focus from niche groups to an expanded primary and preventative style of health care for all Americans while still providing full coverage for certain cases. Therefore, the goal of the public health care system would be to hedge against the staggering cost of long-term chronic and preventative diseases in American society. One can speculate that this type of public health care system would result in an alleviation of costs associated with primary and preventative health care on the private sector. Additionally this improved public health care system would reduce costs on the private sector as all Americans would benefit from the effects of having a universal primary and preventative health care system.
In essence, the American people would no longer bear the costs of a piecemeal public health system. With a universal primary and preventative health care system, all Americans would have health care and private health care insurance would become affordable. And rather than 43.6 million American being without health insurance, they would then have the opportunity to see a doctor whenever they needed one.
 U.S. Department of Health and Human Services. National Health Expenditure Accounts 2006 Highlights. Centers for Medicare and Medicare Services; Washington, D.C., 2007. pg. 2
Catherine Fisher is a Development Research Associate with the Development office of Hudson Institute
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