Health Care Financing

Definition

Health care financing provides people in the United States with access to health care programs. Health care financing is directed and administered by the United States Department of Health and Human Services and the Health Care Financing Administration. Some health care financing benefits and privileges are also provided through the Department of Veteran's Affairs.

Description

Health care financing provides health care benefits to people who are either elderly or needy, or who otherwise meet the criteria for specific benefit programs. The three largest health care programs provided by the federal and state governments to citizens of the United States are Medicare, Medicaid and the State Children's Health Insurance Program. Together Medicare, Medicaid, and SCHIP provide health insurance for over 74 million Americans. Each program targets a different portion of the population and the health care needs of that particular population.

Medicare is a federal health insurance program to which all Americans aged 65 years or older are entitled. The program was started in 1965 by the Social Security Administration to provide health care for the aged. The program went into effect in 1966. In 1973, Medicare was expanded to include people who suffer from certain specific debilitating diseases such as permanent kidney failure. Medicare is an entitlement program like Social Security and does not rely on financial need to qualify a recipient. Approximately 40 million people are currently enrolled in the Medicare federal health insurance program.

Medicaid is a health insurance program for financially needy people. The Medicaid program was developed in 1965 along with the Medicare program and was put into effect in 1966. The program receives federal and state funds. Medicaid follows the operation guidelines set by the HCFA, but is operated by state welfare or health departments. Benefits vary from state to state. The people who qualify for Medicaid benefits are primarily children and their families who also qualify for public financial assistance such as the food stamp program. Elderly and disabled adults may also receive Medicaid assistance if they live in a qualifying, low-income household. Medicaid benefits have been expanded to include women with breast or cervical cancer, people living with AIDS, and home health care for people who qualify for long-term care.

SCHIP is a medical insurance program for children through the age of 18 years whose parents earn too much money to qualify for Medicaid, but who still earn too little to pay for insurance through a private company. The funds are regulated and delivered to each of the 50 states through the HCFA, but specific benefits are distributed at the discretion of each state. Benefits vary from state to state.

Other health care programs and benefits that are available to American citizens are Tricare and the Indian Health Service. Both programs target specific groups of beneficiaries and are distributed through government services.

Tricare, formerly known as CHAMPUS, is the health care program for the United States military. It benefits both active-duty and retired military personnel and their dependants. It is also benefits veterans of foreign wars. The Tricare system allows recipients to choose their own doctor through a civilian health care system or to make use of the comprehensive health care services offered through military hospitals and clinics. Coverage is nation-wide and benefits remain constant throughout the entire United States. It is administered through the Department of Veteran's Affairs.

The Indian Health Service is an agency within the U.S. Department of Health and Human Services. The IHS is responsible for providing federal health services to Alaska natives and other Native Americans. IHS maintains comprehensive health care delivery system of hospitals and clinics nationwide for approximately 1.5 million members of the 550 federally recognized Indian tribes and their descendants.

Viewpoints

Health care financing is the point of much disagreement and dissension on many fronts. While many advances are being made in health care, the number of people who are not covered by private health policies is growing. Even though federal funds provide health care financing programs, many children and disabled people continue to be under-insured and under-served by the medical community.

KEY TERMS

DHHS—Department of Health and Human Services, formerly the Department of Welfare.

HCFA—Health Care Financing Administration.

Medicaid—A jointly-funded, federal-state health insurance program that provides health care for the aged and the financially needy.

Medicare—A federally funded health insurance program for all persons aged 65 or older.

SCHIP—State Children's Health Insurance Program. It provides health care insurance for children up to the age of 18 years who do not qualify for Medicaid but are not covered by private insurance.

Professional implications

The cost of health care financing by the federal government is likely to continue growing for several reasons.

The large, aging "baby boomer" population will soon be eligible for Medicare benefits.
Advanced medical technology keeps people alive and living longer with disabilities.
Longer life expectancy increases need for medical care and long term care.

Improved preventive practices are covered by health care financing.
An increasing number of people are living longer with chronic diseases.
There is a growing trend for employers not to offer medical benefits to employees and their families.