Introduction (Psychology and Mental Health)
The first modern private health insurance plans were developed in the United States in 1929, and since then, they have taken a wide variety of forms. One of the first successful plans was created in 1932 by Blue Cross/Blue Shield, which contracted with physicians and hospitals to obtain discounted health care for its members. In the 1940’s and 1950’s, employer-sponsored health insurance became increasingly common.
The U.S. government became involved in sponsoring health insurance in the 1960’s, introducing Medicare and Medicaid in 1965. Medicare, which supplies health insurance for people aged sixty-five and over and for disabled people who have paid into the Social Security system, is a federally funded and operated program. Medicaid, which provided health insurance for low-income people, is federally and state funded and state operated. When these two forms of health insurance were developed, they accounted for 25 percent of all health care costs. By the twenty-first century, Medicare and Medicaid accounted for nearly 50 percent of all health care costs.
Individuals on Medicare can purchase Medigap insurance, which is private insurance that supplements Medicare coverage by paying co-pays and deductibles. Co-pays are the flat fees that individuals must pay each time they receive a service. Deductibles are the amount that individuals must pay for health care each year before insurance begins to cover the costs. Many...
(The entire section is 268 words.)
Types of Health Insurance (Psychology and Mental Health)
Traditional (standard) health insurance offered fee-for-service plans. Under these types of plans, patients could use whatever physician or hospital they chose. They paid the deductible and any co-pays, and the insurer paid the rest. However, by the end of the twentieth century, to cut costs, insurers had moved toward offering more cost-effective managed care plans. These plans consist of networks of providers and hospitals who provide care to plan members at reduced costs. These managed care plans include health maintenance organizations (HMOs) and preferred provider organizations (PPOs). In HMOs, patients must get all their care from participating providers, and must receive referrals from their primary care provider to see specialists. In PPOs, clients may choose to see either in-network or out-of-network providers but will pay less if they see those who belong to the network of providers and hospitals affiliated with their plans.
Because people have been living longer, health care costs have been rising exponentially, particularly in the latter part of life. Many people find themselves in need of long-term health care during the last years of their lives. Many types of private and government health insurance do not cover long-term treatment, so the insurance industry developed plans to meet this need. Long-term care insurance covers the costs of long-term home health care or extended care in an assisted living...
(The entire section is 334 words.)
Mental Health Coverage (Psychology and Mental Health)
Regardless of the type of health insurance, historically, benefits for mental health have not been as extensive as those for medical or surgical services and have varied from state to state. The Mental Health Parity Act of 1996 required insurers that offered mental health coverage to set lifetime dollar limits equivalent to limits for medical and surgical benefits, but it did not require insurers to offer coverage for mental problems. In 2008, Congress passed a law stipulating the Medicare co-pays for mental health were to be reduced from 50 percent to 20 percent, the same as for most doctors’ services, over a six-year period. In October, 2008, the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act required that coverage for treatment for addiction and mental illness be on a par with that for medical and surgical services for employer and group health plans in companies with more than fifty employees. The law would take effect on January 1, 2010.
(The entire section is 156 words.)
Sources for Further Study (Psychology and Mental Health)
Agency for Healthcare Research and Quality. Questions and Answers About Health Insurance: A Consumer Guide. Washington, D.C.: U.S. Department of Health and Human Services, 2008. This guide to health insurance available in the United States was developed by the federal government to make consumers aware of the various options available to them. It guides their decision-making process by providing answers to commonly asked questions.
Franks, P., C. M. Clancy, M. R. Gold, and C. M. Franks. “Health Insurance and Mortality: Evidence from a National Cohort.” Journal of the American Medical Association 270 (1993): 737-741. This article looks at the relationship between health insurance (or lack thereof) and illness and death. It highlights the importance of insurance to overall health.
Pear, Robert. “Bailout Provides More Mental Health Coverage.” The New York Times, October 5, 2008. Describes the mental health parity law that was passed along with the financial security law and its effects on mental health coverage by insurance companies.
Pilzer, P. Z. The New Health Insurance Solution. San Francisco: Wiley Interscience, 2005. This popular book explains the different types of health insurance available in the United States. It describes options that may be available to those who do not have health insurance through their employers, highlighting the advantages and...
(The entire section is 292 words.)
Health Insurance (Encyclopedia of Cancer)
Health insurance is insurance that pays for all or part of a person's health care bills. The types of health insurance are group health plans, individual plans, workers' compensation, and government health plans such as Medicare and Medicaid.
Health insurance can be further classified into feefor-service (traditional insurance) and managed care. Both group and individual insurance plans can be either fee-for-service or managed care plans.
The following are types of managed care plans:
- Health Maintenance Organization (HMO)
- Preferred Provider Organization (PPO)
The purpose of health insurance is to help people cover their health care costs. Health care costs include doctor visits, hospital stays, surgery, procedures, tests, home care, and other treatments and services.
Health insurance is available to groups as well as individuals. Government plans, such as Medicare, are offered to people who meet certain criteria.
Group and individual plans can be...
(The entire section is 2482 words.)
Health Insurance (West's Encyclopedia of American Law)
Health insurance originated in the Blue Cross system that was developed between hospitals and schoolteachers in Dallas in 1929. Blue Cross covered a pre-set amount of hospitalization costs for a flat monthly premium and set its rates according to a "community rating" system: Single people paid one flat rate, families another flat rate, and the economic risk of high hospitalization bills was spread throughout the whole employee group. The only requirement for participation by an employer was that all employees, whether sick or healthy, had to join, again spreading the risk over the whole group. Blue Shield was developed following the same plan to cover ambulatory (i.e., non-hospital) medical care.
The Blue Cross/Blue Shield plans were developed to complement the traditional method of paying for HEALTH CARE, often called fee-for-service. Under this method, a physician charges a patient directly for services rendered, and the patient is legally responsible for payment. The Blue Cross/Blue Shield plans are called indemnity plans, meaning they reimburse the patient for medical expenses incurred. Indemnity insurers are not responsible directly to physicians for payment, although physicians typically submit claims information to the insurers as a convenience for their patients. For insured patients in the fee-for-service system, two contracts are created: one between the doctor and the patient, and one...
(The entire section is 2268 words.)