Introduction
The largest payer for healthcare in
the US is Medicare. The second largest is Medicaid, a program funded by the
federal government that provides coverage for low-income individuals and
families. There are three other programs that help pay for care: commercial
insurers (those not owned by employers or unions), COBRA plans (obtained under
the Family and Medical Leave Act), and private insurance purchased on an
individual basis.
Medicare, Medicaid, and the
Affordable Care Act (ACA) comprise the largest payer for healthcare in the US.
While some claim Medicare is a single-payer system, it really isn't. There are
dozens of private insurers under the banner of Medicare that are responsible
for enrolling participants during their enrollment period as well as managing
their healthcare services.
Private
insurance
the largest payer for healthcare in
the US is private insurance. The number of people covered by private insurance
has increased from 49 million in 1992 to 152 million in 2014 and it is expected
that it will continue to increase in the coming years.
The biggest reason why private
insurance has become such a popular option is because it allows you to choose
your own doctor and hospital, as well as negotiate lower prices with providers.
Many people also like the fact that they can save money by being able to
purchase health insurance through an employer or on their own.
Private insurance also covers many
other benefits that are not available through Medicaid or Medicare, such as
mental health care and substance abuse treatment.
Medicare
Medicare is a federal health
insurance program in the United States, operated by the Department of Health
and Human Services. It provides health insurance for people older than 65 years
old who have certain types of long-term, serious illnesses and disabilities.
Medicare is financed jointly by
general revenue, which comes from a variety of sources including premiums paid
by beneficiaries and taxes on incomes, estates and gifts; and by grants
administered by the Department of Health and Human Services (HHS). The Social
Security Administration (SSA) oversees the program.
Medicare is administered at five
regional centers throughout the country. Each center is responsible for one or
more geographic regions. These regions include:
Alabama, Florida, Georgia, Kentucky,
Mississippi, North Carolina, South Carolina and Tennessee.
Alaska, Arizona, California
(Northern), Colorado (Northern), Hawaii (Northwest), Idaho (Southern), Montana,
Nevada (Central), New Mexico (Southern), Oregon (Northern & Southern), Utah
(Southern), Washington State.
Medicaid
and CHIP
Medicaid and CHIP are two health
insurance programs that provide coverage to people with low incomes. While
Medicaid is administered by states, a portion of the federal government pays
for CHIP, which is available to children in families who earn up to $16,000 per
year.
Medicaid covers adults and children
with disabilities in all 50 states, the District of Columbia, Puerto Rico, Guam
and the U.S. Virgin Islands. Eligibility also includes pregnant women, parents
with dependent children under age 6, people over age 65 and people with incomes
up to 133 percent of the federal poverty level ($14,856 for an individual in
2018).
CHIP covers children from families
that make too much money to qualify for Medicaid but not enough to get full
insurance on their own. It also serves certain adults who have an income at or
below 185 percent of the poverty level ($28,326).
Out-of-pocket
spending
The largest payer for healthcare in
the U.S. is out-of-pocket spending, with an average cost of $5,300 per person
per year. The next largest payer is private insurance, with an average cost of
$4,500 per person per year.
Out-of-pocket spending includes
everything you pay for out of pocket: co-pays, deductibles, coinsurance and any
other costs you have to pay for your healthcare services. This may include a
range of expenses from copays to premiums to prescription drugs.
In 2015, out-of-pocket costs
accounted for nearly half (48%) of all health care spending in the U.S., up
from 41% in 2000.
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