10 - Financing Health Care

Abstract

This chapter focuses on financing health care scheme in the context of national health insurance (NHI). The tremendous growth in private health insurance, strongly encouraged by the tax-exempt status of employer-paid premiums, has gone a long way toward covering the employed population and their families against the basic costs of hospitalization and surgery. Coverage against catastrophic costs has lagged substantially behind the growth of basic coverage. However, there are many gaps remaining in private insurance coverage of the population. Control of rapidly rising medical costs has apparently risen above the goal of access as the number-one health issue of present day. The lines are beginning to be drawn between those who see cost control as a prerequisite to NHI and those who see NHI as a prerequisite to effective cost control. The impact of NHI alternatives on state and local health expenditures is also an important consideration, as 12% of national health expenditures are financed by state and local governments. The range of national health insurance proposals spreads from narrow proposals that would marginally extend Medicaid to reduce the number of uninsured persons and prevent financial catastrophe for families to very broad proposals that would achieve these objectives and attempt to implement or encourage changes in the organization and delivery of health care services. The point in weighing universal versus income-tested programs suggests that policies which are targeted at particular low-income groups—income-tested programs—would be most acceptable to the public, that is, the contributors to the programs.