The Evolution of Private Health Insurance and Why the Patient Protection and Affordable Care Act Is the Future of Health Care
The Evolution of Private Health Insurance and Why the Patient Protection and Affordable Care Act is the Future of Health Care
One of the most hotly debated topics in the past two years has been health care reform. An effort by President Obama was successful and in March 2010, the Patient Protection and Affordable Care Act or PPACA was signed into law. This law aims to reform the entire U.S. health care delivery and financing system. In this paper, I will discuss how health insurance has evolved over time and how the PPACA is the future of healthcare.
Originally, as early as the mid-1800s, workers were insured against lost wages resulting from work-related injuries. Later, insurance was created to cover lost wages resulting from catastrophic illness. Health insurance as we know it today began in the 1930s when insurance began to pay part or all of the cost of medical services to providers. A group of teachers from Baylor University contracted with Baylor Hospital in Dallas, Texas to provide coverage for hospital expenses. This arrangement yielded Blue Cross, the dominant form of insurance in the United States for the next forty years (Sultz & Young, 2011).
Blue Cross was a private, not-for-profit insurance company which made payments directly to providers. Originally, a community rating was used in which “all individuals in a defined group pay single premiums without regard to age, gender, occupation or health status,” (Sultz & Young, 2011, p.231). This helped to provide insurance to the entire community without discriminating against those who might have varying risk characteristics. This remained the norm until commercial insurance invaded the marketplace and began to use experience rating in order to calculate higher premiums for those they deemed less healthy and offered lower premiums for those they deemed healthy (Sultz & Young, 2011).
The creation of Blue Cross and the insurance it provided is significant for many reasons. It began a new era
One of the most hotly debated topics in the past two years has been health care reform. An effort by President Obama was successful and in March 2010, the Patient Protection and Affordable Care Act or PPACA was signed into law. This law aims to reform the entire U.S. health care delivery and financing system. In this paper, I will discuss how health insurance has evolved over time and how the PPACA is the future of healthcare.
Originally, as early as the mid-1800s, workers were insured against lost wages resulting from work-related injuries. Later, insurance was created to cover lost wages resulting from catastrophic illness. Health insurance as we know it today began in the 1930s when insurance began to pay part or all of the cost of medical services to providers. A group of teachers from Baylor University contracted with Baylor Hospital in Dallas, Texas to provide coverage for hospital expenses. This arrangement yielded Blue Cross, the dominant form of insurance in the United States for the next forty years (Sultz & Young, 2011).
Blue Cross was a private, not-for-profit insurance company which made payments directly to providers. Originally, a community rating was used in which “all individuals in a defined group pay single premiums without regard to age, gender, occupation or health status,” (Sultz & Young, 2011, p.231). This helped to provide insurance to the entire community without discriminating against those who might have varying risk characteristics. This remained the norm until commercial insurance invaded the marketplace and began to use experience rating in order to calculate higher premiums for those they deemed less healthy and offered lower premiums for those they deemed healthy (Sultz & Young, 2011).
The creation of Blue Cross and the insurance it provided is significant for many reasons. It began a new era
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