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Health Insurance Costs in the U.S. Are Making Americans Sick

What began in the late 1800's as accident insurance against injuries from railroad and steamboat accidents, then evolved to prepaid hospital policies, has ultimately become comprehensive programs covering the costs of routine, preventive and emergency procedures and prescription coverage. Such coverage may be provided through government-sponsored social programs or from private insurance companies, and may be purchased on a group basis or by individual consumers.

The inherent challenges facing insurance companies today are twofold: adverse selection and ex-post moral hazard. Adverse selection is the term used to describe the tendency for only those who will benefit from insurance to buy it meaning sick people buy it because they anticipate large medical bills. Moral hazard is basically when the parties involved are not responsible for costs arising out of decisions they make, like doctors and patients agreeing to extra tests which may or may not be needed.

Of course, people in developed countries are living longer, and these senior citizens require more intensive medical care. Public programs provide most coverage for seniors and low-income children and families, as long as they meet eligibility requirements. These programs are Medicare, a federal program for seniors and some disabled individual; Medicaid, which is jointly funded by the federal government and states, and administered at the state level covering very low income children and families; and the State Children's Health Insurance Program, another federal-state shared initiative covering children and families who do not qualify for Medicaid but cannot afford private coverage.

Under the Emergency Medical Treatment and Labor Act of 1986, all emergency rooms in hospitals that accept federal subsidies are required to offer care to everyone, regardless of the immigration status or ability to pay their bill. Since most employers that hire illegal immigrants will not provide health insurance, these workers tend to avoid seeking medical treatment until an illness or injury has become acute, necessitating emergency care.

Uninsured women are more likely to suffer serious health problems. Many don't get preventive care, including lifesaving screening tests such as mammograms and Pap tests. Fortunately, there are other government-sponsored programs to provide coverage for these important procedures, as well as prenatal care for pregnant women.

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