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Who’s Paying For Health Care?

America spent 17. 3% of its gross domestic product on health care in 2009 (1). If you break that upon an individual level, we spend $7, 129 per person every year on health treatment… more than any other country in the world (2). With 17 mere cents of each and every dollar Americans put in keeping our country healthy, it’s no wonder the government is determined to reform the system. Inspite of the overwhelming attention health care is getting in the media, we know little or no about where that money comes from or how it makes their way into the system (and rightfully so… the way we spend on health care is insanely sophisticated, to say the least). This convoluted system is the unfortunate result of a series of programs that attempt to control spending layered on top of one another. What follows is a thorough attempt to peel away those layers, helping you become an informed health care consumer and an incontrovertible debater when talking about “Health Care Reform. inch¬†www.healthable.org

Who’s paying the costs?

The “bill payers” get into three distinct buckets: individuals paying out-of-pocket, private insurance providers, and the government. We all can take a look at these payors in two different ways: 1) How much do they pay and 2) How many people do they pay money for?¬†

The bulk of individuals in America are insured by private insurance providers via their organisations, followed second by the government. Those two sources of payment combined are the cause of near 80% of the financing for health care. The “Out-of-Pocket” payers fall into the uninsured as they have decided to hold the risk of medical expense independently. When we look at the amount of cash each of these groupings spends on health health care annually, the pie adjusts dramatically.

The government at present pays for 46% of national health care bills. How is the reality possible? This will make considerably more sense when we examine each one of the payors independently.

Understanding the Payors

Out-of-Pocket

A select portion of the citizenry chooses to take the risk of medical expenses themselves rather than buying into an insurance plan. This group seems to be younger and healthier than insured patients and, as such, has access to medical treatment much less frequently. Because this group has to pay for all incurred costs, they also tend to be much more discriminating in the way they access the system. The result is that patients (now more appropriately classified as “consumers”) comparison shop for tests and elective techniques and wait longer before seeking medical attention. The payment method for this group is straightforward: the doctors and hospitals charge established fees for his or her services and the patient pays that amount directly to the doctor/hospital.

Private Insurance

This kind of is where the complete system gets far more complicated. Exclusive insurance is purchased either individually or is provided by employers (most people get it through their employer as we mentioned). With regards to private insurance, there are two main types: Fee-for-Service insurers and Been able Care insurers. These two groups approach paying for care very differently.

Fee-for-Service:

This group can make it relatively simple (believe it or not). The employer or individual buys a health plan from a private insurance company with a defined set of benefits. This benefit package will have what is called a deductible (an amount the patient/individual must pay for their health attention services before their insurance pays anything). Once the deductible amount is attained, the health plan pays off the fees for services provided throughout the health care system. Often, they will pay a maximum cost for a service (say $100 for an x-ray).

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