Currently in the United States, acquisition of affordable health insurance plans through employers and private corporations is one of the main topics in the political landscape between liberals and conservatives. The traditional way of obtaining health insurance is either by subtracting a certain amount of payout from one’s salary/paycheck or pay out of pocket. However, many people do not have access to health care because of the high costs associated with poor insurance plans that require individuals to pay high premiums and deductibles, which may or may not contain good benefits such as free preventative care. In addition, due to the past economic recession in 2008, many employers could not afford to pay for health benefits and canceled numerous plans for many employees. This effectively increased the rate of uninsured Americans as well as the increasing health care costs.
One reason health care costs are increasing are due to an increase reliance on the emergency department (ED) where many medical conditions could have been prevented or directed to a low-cost health clinic for care. Not only does this take away human capital for people who have actual medical emergencies, but also wastes hospital resources where many of these visit are billed frequently to Medicare, Medicaid, and low-cost health insurance (Choudhry et al., 2007). This problem can be attributed to people who live under the poverty line that cannot afford healthcare or qualify for Medicare and Medicaid. According to the U.S. Census Bureau’s Income, Poverty, and Health Insurance Coverage in the United States: 2012 report, the official poverty rate was at a staggering 15.0 percent, or approximately 46.5 million people are in poverty with an income of less than $25,000 with a weighted average threshold of $11,720. The economic status for the uninsured was among people with incomes less than $25,000 at an unsettling 24.9% in 2012 (U.S. Census Bureau, 2012). Due to the high amount of people who are not insured and require medical assistance, whether it is crucial or non-crucial, refer to the ED to obtain the needed health care because the ED cannot turn down anyone who requires medical attention.
This overarching problem has significant economic implications in America where the costs to provide healthcare are high and the overall organization between national/private insurance and hospitals/clinics is highly inefficient. With all of these issues plaguing the national economy with a financial structure that is in disarray, one would question how America’s health insurance developed into a severe problem both from an economic and individual perspective. To understand how and why the current health insurance system is causing many problems to society and the economy, a historical observation is required.
Starting in the mid-19th century, the earliest form of health insurance was incepted by the Franklin Health Assurance Company in Massachusetts in 1850 where it provided...