How health care works in the U.S. (Part 1 - delivery through health insurance companies)

As the U.S. prepared for its 2012 presidential election, there was a lot of talk about the Affordable Care Act (ACA), famously known as "Obamacare", President Obama's solution to improving health care in the country. Countless points were argued for and against this law that, despite having already been signed into law in March of 2010, is still hotly debated (The White House, n.d.). Those for the plan argued that it would help the millions of Americans that are uninsured, be able to secure insurance. While those opposed, argued that it would be bad for businesses and that health care should be handled on the state level, to name a few. To ordinary citizens, all of these arguments raise several questions. What impact will this law have on my life (i.e., my health, my budget)? What would it mean for me if health care was handled at the state level? etc. Before you can understand the impact of ACA or any major changes in health care for that matter, it's important to understand how health care works in the U.S. - how care is delivered, who delivers care, how its paid for, etc.

The U.S. health care system 

In the U.S., health care is provided to individuals through services delivered by a mix of public and private entities, namely the government and not-for-profit and for-profit health insurance companies.

Health Insurance Companies

Health insurance companies such as Kaiser Permanente and UnitedHealthcare offer "pre-payment" health plans or policies to employers and individuals or families. With these "pre-payment" plans, individuals pay monthly rates to their health insurance company, ensuring some level of coverage for a certain time period (Note: pricing, level of coverage, and length varies by company and health policy. Also, in addition to monthly rates, policy holders may also be responsible for paying co-pays and co-insurance fees and meeting yearly deductibles). Most people consider themselves to be fortunate if their employer offers health insurance as part of a benefits package because employers, unlike individuals, can take advantage of group rates that can reduce the cost of health plans for their employees and their families.  However, just because an employer offers health insurance it doesn't mean they will cover the cost of it. Some employers cover all, part, or none of the plan costs.

References:

1. The White House. (n.d.). About the new law. Retrieved from http://www.whitehouse.gov/healthreform/healthcare-overview