Escalates Cost of Social Health Insurance

Escalating Costs of Social Health Insurance

Introduction

Unlike any other country in the world , the United States continually experience rising cost of healthcare provision . Wolfe (1999 ) reports that healthcare costs has been increasing at a high rate for decades , it is estimated that every 40 months , the share of Gross Domestic Product (GDP ) spent on healthcare goes up by 1 percent . Health expenditure which stood at 12 .3 percent of GDP in 1990 increased to 16 .0 percent of GDP in 2006 and is projected to reach 20 percent in the next 7

years . Between 2005 and 2006 alone , healthcare spending increased by 6 .7 percent exceeding nominal GDP growth by 0 .6 percent , to a whooping 2 .1 trillion , representing an estimated 7 ,000 spending per person (Kuttner 2008 Catlin et al 2008 . Various factors including inflation , aging population and advances in medical technology has been indicted as been responsible for the global increase in health expenditures , however , the American situation appears to be peculiar . Kuttner (2008 ) contends that the proliferation of new technologies , poor diet , lack of exercise , the tendency for supply (physicians , hospitals , tests , pharmaceuticals medical devices , and novel treatments ) to generate demand and the culture of the American litigation , resulting in excessive malpractice litigations and the practice of defensive medicine , all adds together to ensure that the country experiences the largest and fastest growth in health expenditures , while at the same time , defeating efforts at cost containments

Like every other developed country , health insurance systems , especially social health insurance systems constitute the primarily methods of health financing (Carrin and James , 2004 . This arrangement ensures that most of the cost of healthcare are paid by third parties , either through public establishments , as in social (public ) health insurance systems or by private bodies , as in private health insurance system , or in some cases , a mixture of both (Wolfe , 1999 . The mixture of private and social health insurance is present in almost every country , with variations in their coverage . While in most European countries , social health insurance is deeply ingrained in societal fabric and provides the largest source of funding and insurance coverage (Saltman , 2004 , the vast majority of Americans receive their health insurance coverage through employer based private insurance , with the rest of the country covered by any of the several public health insurance programs (Glover et al 2003

It is estimated that employer private health insurance covers approximately 63 percent of the population , with 51 percent of these amount covered by their own employers , while the remaining 41 percent are covered as a worker 's dependent 14 percent are covered by public programs , 5 percent covered by individual insurance policies while an estimated 17 percent of the population are uncovered by any insurance (Devi , 2005 . Medicare is largely regarded as the primary national (social ) health insurance program in the United States , providing coverage for an estimated 44 million Americans over the age of 65 . It is also estimated that Medicare provides health insurance coverage for about 7...