Starting to Navigate The Health Insurance Maze
Part 1: The Basic Tools, Chapter 1: The Health Insurance Maze Page 1
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The American system of health insurance has changed dramatically over the past few decades. Our current system originated on a large scale soon after World War I as employers began to offer health insurance coverage as an employment- based benefit for employees and their families. At that point, policies were fairly simple and were intended primarily to help cover the cost of hospital care.
Over the decades, however, as outpatient treatments, medical tests, and medical equipment became more expensive, many health insurance policies began to offer additional benefits to cover those services and treatments. As the needs of the elderly, the poor, the uninsured, and people with disabilities were recognized, the state and federal government began to sponsor health insurance programs in addition to the private health insurance system. As time went on, the development of managed care programs and self-funded plans led to the introduction of a series of new concepts.
However, instead of being reorganized at some point into a single, fully integrated system, both government-sponsored and private health insurance programs have continued to develop piecemeal, in a sort of patchwork arrangement. At this point, the American health insurance system seems to have evolved into a complex, highly fragmented, chaotic maze. For example, the federal government currently sponsors a number of separate health insurance programs, including Medicare, Medicaid, and CHAMPUS, as well as a number of regu latory programs such as COBRA and ERISA. Each of these programs is supervised by its own separate government agency, some programs are supervised by several different agen cies, and each program has its own separate system of rules and regulations.
Medicare, a federal health insurance program for senior citizens and for some people with disabilities, is supervised through HCFA, the federal Health Care Financing Adminis tration. However, Medicaid-a health insurance program for people whose income is below the poverty line as well as for some people with disabilities-is operated jointly by both the states and the federal government. Thus, it is supervised by both the federal government and by a separate agency in each state. CHAMPUS, the Civilian Health and Medical Program of the Uniformed Services-a health benefit program estab lished by the federal government for eligible family members of armed forces personnel and for retired armed forces per sonnel-is supervised through a special national Tn-Care Support office (see Appendix B).
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