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Paying for health care

Every developed country except the United States has extensive organized methods of paying for health care. Most have statutory health insurance systems in which the private insurance funds gain many new members throughout the population, administer money collected by requirement from subscribers and employers, and pay the health care providers—all according to laws. A few countries have national health services, a system in which government owns, manages, and fully finances health care for all citizens.

Insurance carriers have many forms and perform many functions, according to the dominant financing system in that country. They are the principal financial administrators in countries with statutory health insurance and in America's private market. They provide supplementary coverage in countries with national health services. This book describes the wide variety of forms of insurance in developed countries. Many Americans think that the only alternative to their private and unorganized system is full governmental domination. But reality is very different mac cosmetics brand positioning.

Government only enacts frameworks, converts insurance premiums into social security taxes, and contains costs. The insurance carriers and health care providers remain private and autonomous Before we can understand much about Social Security and Medicare, we need to consider the basic attributes of social insurance, the key device on which the nation relies to provide its citizens with social benefits. Social insurance, a near universal response of industrial societies to common hazards, has become the nation's preeminent social welfare technology.

By discussing the various public and private means by which resources are transferred to protect citizens and by delineating some of social insurance's characteristic features, this chapter explains the reasons for social insurance's prominence. Typically, transfers are discussed primarily as publicly funded income maintenance programs that shift resources from one group of citizens to another. Such government transfer programs provide cash payments, in-kind services such as health care, or commodities such as food stamps.

The programs can be based either on the means-tested welfare approach or on the social insurance approach. But welfare and social insurance do not exhaust the network of transfers that envelops our society. Transfers, in our opinion, include the numerous vehicles that individuals, families, employers, and government use to shift resources in ways that protect citizens against identifiable risks to their economic well-being or simply enhance that well-being.

At any point in time, individuals are part of a vast constellation of transfers, sometimes as recipients and at other times as providers. Social insurance, welfare, and tax transfers supplement family and other private transfers, sometimes providing protection where none is available.

We maintain that understanding social insurance programs involves comprehending this vast array of transfers. transfers. Each tends toward somewhat different outcomes, with tax transfers benefiting higher income groups the most, welfare transfers being targeted to those with greatest financial need, and social insurance benefits having the largest poverty prevention and reduction effects. However, the decisions that need to be made are essentially the same.

Benefits must be assigned to certain groups and revenues raised. How these benefits and taxes are structured-that is, deciding who benefits from and who pays for transfers--is the concern on which much policy debate centers. Whether we are concerned about the financial future of Medicare, the growing cost of health care, the availability of long-term care, health-related economic risks to elders, or ethical choices surrounding the allocation of health care, the large health policy issues affecting elderly persons can rarely be understood simply as "Medicare problems.

" Emerging in the context of a growing, diverse, elderly population and a large turbulent, health care environment, these issues transcend programmatic boundaries--though Medicare is often a central concern. We begin this chapter, then, by describing the needs of the elderly for health care and the range of public and private mechanisms conditioning the elderly's access to health care. Then we review the major health policy issues affecting elderly persons, paying special attention to those that are closely tied to Medicare.

More specifically, we discuss (1) the financial cost of health care for individuals, (2) quality of and access to acute, rehabilitation, and long-term care, (3) the growing financial cost to society of health care for elderly persons, and (4) ethical issues surrounding the allocation of health care resources. Old age is not what it used to be. More people reach age 65, and, once there, live longer. They often remain active and independent throughout most, if not all, of their old age. Yet increased life expectancy does not automatically translate into a healthier old age, either for individuals or cohorts.

In fact, there is lively disagreement among experts about whether the older population as a whole is healthier and more able today than in the past.

Some suggest that they are and can work longer. 1 Others, pointing to disability trends among older middle-aged and elderly persons and to the great diversity of health status among the old, suggest that we simply do not know. 2 In fact, there is reason to believe that some groups of elderly persons (e. g. , higher socioeconomic status) may be experiencing a healthier and more active old age, while others live longer but more disabled old ages.

What we definitely know is that today's elderly population presents a heterogeneous picture with respect to its health status and health care needs. Asked about their health in 1989, almost 40 percent of non-institutionalized persons aged 65 and over interviewed as part of the 1989 National Health Interview Survey reported that it was very good or excellent, 32 percent that it was good, and 29 percent that it was fair or poor.

3 We also know that the likelihood of experiencing chronic health problems (e. g., arthritis, hearing deficits, Alzheimer's disease), along with substantial limitations in functional capacity, at some point in old age is very great. Old age does not, however, herald entrance to a slippery slope, from good to bad health.

More likely, older people go through a variety of health transitions. Setbacks to independent living such as broken hips are often followed by improved functioning. Moreover, there is considerable evidence that lifestyle interventions, rehabilitation, and proper medical care can often help prevent, forestall, improve, or reverse functional incapacities.

Also, it is important to recognize that many persons are able to function independently and continue to contribute to family and society in spite of significant limitations and little or no social service, health care, or family assistance. Many others, of course, cannot. The need for institutionally- and/or community-based long-term care is often assessed by examining ability to perform activities of daily living, or ADLs, (e. g. , eating, bathing, dressing, transferal to and from bed, using a toilet without help).

It is also measured by examining the capacity to perform instrumental activities of daily living, IADLs, which involve basic household or social chores such as shopping, handling finances, preparing meals, taking medications, and housework. About two-thirds of the roughly 10. 6 million U. S. residents with at least one ADL or IADL limitation in 1990 are 65 or older. Of these 7. 1 million elderly persons, about 1. 5 million are in nursing homes or other institutions--the remaining 5. 6 million reside in community settings often with the assistance of family members.

4 While only 5 percent of the elderly live in nursing homes on any given day, long-term care experts Robert Kane and Rosalie Kane note that, on average, "persons aged 65 years have about a 40 percent chance of spending some time in a nursing home before they die. " 5 Other survey data highlight how much greater the need for long-term care is among the very old. Researchers from the Agency for Health Care Policy and Research estimated that 19. 5 percent of the noninstitutionalized elderly aged 65 and over have difficulty performing at least one ADL or IADL.

However, this includes only 9.9 percent of persons aged 65 to 69 and a startling 56. 8 percent of those 85 and over. 6 tive care and that the utilization of health care roughly doubles "with each decade after age 65. " However, "there is still reason to be concerned with undertreatment," as many elderly persons choose not to seek care in spite of significant problems, and utilization of certain services such as dentistry and mental health does not increase with age. 7 And we know that most elders are not protected against catastrophic costs such as those that can arise from chronic ailments.

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