Recent Trends of Medical Insurance
Medical costs in the United States are rising quickly, partly because of costly advanced technology (which American health-care providers use earlier and more often than do doctors in other countries) and partly because people are living longer. The baby-boom generation (those born during an era of high birth rates after the end of World War II) is beginning to reach retirement age and can expect to live another two decades, with associated medical costs. In 2004, however, life expectancy in the United States (77 years) was lower than in 22 other nations, including Japan, Australia, New Zealand, Canada, and nearly all the western European countries.
Associated costs that are rising include hospital stays and specialist charges. The price of a day in the hospital rose from less than $200 in 1965 to more than $1,200 in 2004. Patients are seeing specialists more often, and charges for their services are nearly twice as high as for more general practitioners. Americans do not go to the doctor or hospital more than people in other countries, but the treatment they get is more intensive and the costs are higher. Insurance premiums are also skyrocketing. In 2006 a single person who had insurance through work paid approximately $627 a year in insurance premiums, while the employer paid an additional $3,615 for that worker; a family of four paid $2,973, with the employer contributing another $8,508. To make matters worse, fewer employers are offering health benefits to their employees: 69 percent in 2000, as compared to 60 percent in 2005.
Americans spend more on health care than do people in any other country: in 2005 the United States spent $5,267 per person, compared with $2,931 in both Great Britain and Canada; 14.6 percent of the U.S. gross domestic product (the total financial value of all goods and services produced in the country in a given time period) goes to medical costs, as opposed to 9.6 percent in Great Britain and Canada. Also in 2005, 7.3 percent of U.S. national health spending went to administration and insurance costs, compared to only 1.9 percent in France. Many agree that the situation is not sustainable.
In 1976 some states began providing medical insurance plans for people unable to get medical insurance in other ways (because of preexisting conditions or self-employment), usually at a higher cost. In 2006 Massachusetts was the first state to pass a universal health-insurance coverage plan, and California, Maine, and Vermont are working on similar plans, with at least 15 other states considering this option.
At the federal level efforts to reform medical insurance practices have largely failed. President Bill Clinton (b. 1946) set up the Task Force on National Health Care Reform in 1992, charging it to come up with a plan that would provide universal health care for all Americans. Hillary Rodham Clinton (b. 1947) headed the committee, whose bill was finally defeated by Republican opposition and competing Democratic plans in 1994. A decade later President George W. Bush (b. 1946) signed the Medicare Prescription Drug, Improvement, and Modernization Act into law in 2003; it was to help senior citizens pay for their prescription drug costs. Opponents criticized the bill for its complexity and cost, and when the plan went into effect on January 1, 2006, some seniors were confused by its options and regulations and were concerned that the promised discounts would not materialize.