The US Healthcare System: An Overview | The Knife Media

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How does the US healthcare system work?

Since Trump’s latest executive order may change aspects of the U.S. healthcare system, it may be useful to know how it currently works. Here’s a brief overview of U.S. healthcare options.

Employer-based insurance

About 49 percent of insured people in 2016 had employer-provided healthcare coverage,according to the Kaiser Family Foundation (KFF). For those people, the employers subsidize the cost of the insurance, though in some cases workers contribute to the expense via monthly payments, co-payments per doctor visit and deductibles. KFF’s news network also notes that the number of choices an employer provides may depend on the size of the company, with smaller companies offering fewer options for its employees to choose from. Employees may choose insurance plans once a year.

Medicare/Medicaid

Medicaid is a program operated jointly by both federal and state agencies. According to Medicaid.gov, Medicaid is the largest source of health coverage in the United States. People receive Medicaid based on their income level, age and whether they have certain medical conditions, such as blindness. Examples include low income families and individuals receiving Supplemental Security Income (SSI).

Medicare is a federal health insurance programfor people who are 65 or older. It can also cover younger people with certain disabilities, and people with diseases such as End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD).

Individual insurance

People can purchase individual plans for themselves or their families through an insurance company. Pricing and options may vary by state or county of residence.

What did the ACA do?

The law required insurance companies to, among other requirements:

  • Cover 10 “essential benefits”, such as maternity leave and prescription drugs.

  • Let “young adults” stay on their parent’s insurance until they reach 26.

  • Provide free “preventive care” services.

It also:

  • Prevents insurance companies from denying coverage or charging customers more based on their health status.

  • Eliminates dollar limits or lifetime caps on individual coverage.

  • Expands coverage for Medicare and Medicaid.

  • Creates new “marketplaces” or “exchanges,” on which private insurance companies compete to sell plans to uninsured Americans.

Individual states can set up their own marketplaces. Alternatively, states can opt out of operating an exchange and allow their residents to purchase insurance under a marketplace established by the federal government. Individuals can still obtain insurance outside of the marketplaces.

Prior to the Trump administration’s Oct. 12 announcement, the federal government allowed people with income under a certain level to receive direct subsidies when they bought individual insurance on an exchange in order to offset their costs.

What does Trump’s executive order do?

On Thursday, President Donald Trump signed anexecutive order that calls for changes to three areas of the Affordable Healthcare Act (ACA), also known as Obamacare. The order aims to expand access to association health plans (AHPs), increase the maximum time limit of short-term insurance plans (STLDI), and widen the use of health reimbursement arrangements (HRAs).

AHPs

The order states that expanding access to association health plans will make it easier for small businesses to join together in groups across state lines, enabling them to negotiate cheaper health plans for their employees. The Washington Post reported the AHPs will not have to comply with the ACA rules for essential benefits, or yearly and lifetime cost limits. They would also not need to be licensed in the state in which they are sold. The White House says employers would not be allowed to exclude any workers from these plans, or charge higher rates for those in poor health, according to Fox News.

STLDIs

The document calls for increasing the maximum time limit for short-term insurance plans from three months to one year. Short-term insurance policies are aimed at people who are between jobs, or younger people no longer covered by their parents’ health plans. The plans are not required to comply with the ACA rules about protections for people with pre-existing conditions or to include mental health coverage, maternity care, full prescription coverage, all considered essential benefits under ACA rules. There are no price limits on premiums. At the end of 2016, around 160,000 people were covered by this type of policy, according to the National Association of Insurance Commissioners.

HRAs

Health reimbursement arrangements allow employers to give employees pre-tax money to buy their own coverage, which does not have to comply with all ACA rules.

 

Written by Lisa Reider

Edited by Julia Berry López and Jens Erik Gould

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