Healthcare, Medicare, and Medicaid
The U.S. health care system is a scrutinized issue that affects everyone: young, old, rich, and poor. The health care system is comprised of three major components. Since 1973, most Americans have turned to managed-care programs, known as HMOs. The second type of health care offered to Americans is Medicare, health care for the elderly. The third type of health care is Medicaid, a health care program for the poor.
Why is our health care system made up of three components, and how did the U.S. health care system develop?
A Historical View
The idea of prepaid health care dates back to the beginning of the 20th century. The first HMOs were started in the 1920s in Elk City, Oklahoma as a farmers’ cooperative. In Los Angeles, California the Ross-Loos Medical Group offered prepaid medical services to employees and families of the Los Angeles County Department of Water and Power. Other large prepaid group practices originated in the 1940s and 1950s. In 1942 employee health premiums were made tax deductible to employers, not individuals. By this time, many individuals were discouraged from buying health insurance. In 1965 Congress created Medicare. Subsidized, unrestricted health care for the elderly led to enormous spending by patients and doctors. As a result, health care costs went up, making it impossible for individual health insurance.
Many liberals in Congress believed that having the government pay for everyone’s health care could control costs. They promoted the idea of health maintenance organizations. President Nixon proposed the HMO Act. In 1973 Congress passed it. Legal impediments were removed to increase the growth of HMOs. HMOs were developed as part of a Nixon administration strategy to encourage the growth of prepaid plans and to improve the capacity and efficiency of the nation’s health system. By the end of 1978, there were more than 200 HMOs along 37 states. In the 1980s the number of HMOs more than doubled and enrollment quadrupled.
The Current State
Throughout the last half of the 20th century, employers have acted on their own to regulate health costs by requiring employees to join health maintenance organizations (HMOs). More than 100 million Americans are under managed care. However, many patients and doctors complain that HMOs impose too many regulations and sacrifice healthcare quality. HMOs are undergoing a high level of scrutiny due to criticisms that the network is controlling and jeopardizing the healthcare system of the nation.
Critics believe that the present functioning of managed-care is degenerative to health care. Managed-care firms control costs by requiring patients to use a “network” of approved doctors and hospitals, and by reviewing the actions of doctors. Patients have to pay more to visit a doctor who does not participate in the “network.” Managed-care firms second-guess doctors, considering only the costs. ...