Health Care Financing

Health Care Financing

Introduction

Health Care financing has been a big issue in the Unites States since the 1960's and today it is even more of a serious issue, with the millions without insurance and health care costs on the rise the United States health care industry is in trouble. Economic hard times have affected Medicare and Medicaid and it has resulted in many cuts. Private insurance companies have raised rates and employers have had to pass the cost onto employees by raising premiums. Health care is on the rise mainly because more and more people are getting older and are needing more and more medical procedures and physician visits. Technological advances are also a cause for rising health care. Many things affect health care and that is why it is so expensive. All of these issues will be addressed in this paper.

Statement of Topic

Health Care financing is a big issue in the United States since the 1960's and even now. Millions of American's are without health insurance and health care costs are on the rise due to technology and the millions of people who are uninsured. In this paper a brief view of why costs are on the rise and the effect that it will have on the American public in the years to come.

Rational of Topic

Health care financing is a big issue for the millions of Americans without insurance and with the new Health Care Reform Bill being front and center; many people are focusing on why it is so important for American's to have insurance. The reason this topic was chosen was to give some insight on why health care costs have risen since the 1960's. The citations used in this paper help to clarify the different points addressed in this paper. They were chosen to explain the issues with health care spending and to show why they are on the rise and why it is so important that this country needs universal health care coverage without them it would have been hard to fully explain the reason for why health care expenditures are so high and what we can do about it as American citizens.

Literature Review of Topic

Health care is an important issue to every human being because at some point in our lives we have to use it whether it be to visit a doctor, have a hospital stay, buy prescription drugs or have a procedure done we all need health insurance. Many American's cannot afford insurance or have lost their jobs and along with that their insurance. Facing the health care crisis in this country is front and center. The main purpose in this paper is to show you that health care costs are on the rise and that every American needs to be covered and how we as a society can help to lower the costs of health care.

It is estimated that two-trillion dollars is spent on health care in the United States; that is more than any other country in the world, according to the Organization for Economic Cooperation and Development (OECD). "The United States spends two-and-a half times more than the OECD average, and yet it ranks with Turkey and Mexico as the only OECD countries without universal health care coverage." ( Johnson, 2010). "In 2009 health care spending reached an all-time high by spending 17 percent of its gross domestic product and the nonpartisan Congressional Budget Office (CBO) estimates that number will raise to 25 percent by 2025 without changes to federal law." ( Johnson, 2010. P. 1). With the incline of healthcare costs rising many employers have had to stop offering their employees' health insurance coverage. "According to a November 2008 Kaiser Foundation report access to employer-sponsored health plans is on the decline among low income workers, and health premiums for workers has increased to 114 percent in the last decade." ( Johnson 2010. P. 1). Employers health care costs has risen 7.3 percent in 2009 compared with 4.8 percent in overall U.S. health spending that year according to a March 2010 report by Thomson Reuters, a business intelligence service. (Johnson, 2010). In 2009 President Obama held to his promise to the American people and put forth to Congress the Health Care Reform Bill that would insure that all Americans would be covered with insurance. The legislation was passed by Congress earlier this year. By insuring that the 47 million Americans without insurance would be covered it would reduce these numbers by 60 percent, but it is less clear to see how this is going to affect the U.S. economy. This new law would produce close to $1 trillion dollars in new government spending and reduce the federal deficit by as much as $138 billion by 2019. However, the "Medicare and Medicaid Services found that the legislation would do little to stem the rise in health care expenditures which expect to increase to more than 20 percent of the GDP in the next decade." (Johnson, 2010. P.2).

Medicaid and Medicare programs which serve the low income population and the elderly 65 years and older is in danger. Cuts are made left and right to these programs and prescription drugs are costing the elderly more and more every day. The fiscal budget for Medicaid and Medicare is $20,000,000 for 2010 and beyond, but with health care costs rising to more than 20 percent of the GDP and more and more American's being needy because of job loss and not being able to afford insurance this might not be enough. "Seventy-five percent of all federal spending will be consumed by Medicare and Medicaid by 2040, according to the President's Council of Economic Advisors." ( Hyman, 2009.p.1).

Health Care spending is projected to reach the largest single increase since 1960. With changing demographics and baby boomers aging into Medicare are among the factors that are going to influence health care spending during 2009-2019. Public spending on hospital care, physician and clinical services and prescription drugs are expected to exceed private spending growth within the first four years of the projection. As a result of this, public spending will account for more than half of the U.S. health care spending by 2012. ( Health Affairs, 2010) A report by the Commonwealth fund health reform will reduce health care spending by nearly $600 billion while improving access to care for 32 million uninsured American's. This report "The Impact of Health Reform on Health System Spending" concludes that the" Patient Protection and Affordable Care Act of 2010's significant payment and system reform provisions will begin to realign health care system incentives and reduce cost growth far in excess of that projected by the Congressional Budget Office and the Office of the Actuary within