1850 First Health Insurance - the Impact on Healthcare, Access, Technology, and Reimbursement
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The balance of government roles and responsibilities in America, he observed, looks much more like a marble cake than a layer cake with a clear separation of roles and functions. However, despite the current preoccupation with events in Washington, increasingly we are seeing a rediscovery of the importance of the role of state and local governments in the health care field.
Part A represented the compulsory hospital insurance program the aged were automatically enrolled in upon reaching age 65. Part B provided supplemental medical insurance, or subsidized insurance for physicians’ services. Ironically, physicians stood to benefit tremendously from Medicare. Fearing that physicians would refuse to treat Medicare patients, legislators agreed to reimburse physicians according to their “usual, customary, and reasonable rate.” In addition, doctors could bill patients directly, so that patients had to be reimbursed by Medicare. Thus, doctors were still permitted to price discriminate by charging patients more than what the program would pay, and forcing patients to pay the difference. Funding for Medicare comes from payroll taxes, income taxes, trust fund interest, and enrollee premiums for Part B. Medicare has grown from serving 19.1 million recipients in 1966 to 39.5 million in 1999 (Henderson 2002, p. 425).
Millions of individuals are not covered by either public or private programs.
Henderson, James W. Health Economics and Policy, second edition. Cincinnati: South-Western, 2002.
The Insurance Monitor. Walter S. Nichols, editor. 67, no. 7. (July 1919).
Marmor, Theodore R. The Politics of Medicare, second edition. New York: Aldine de Gruyter, 2000.
McDavitt, T.V. “Voluntary Prepayment Medical Care Plans.” Journal of American Insurance, December 23, no. 2 (1946).
Numbers, Ronald L. Almost Persuaded: American Physicians and Compulsory Health Insurance, 1912-1920. Baltimore: Johns Hopkins University Press, 1978.