Health Care and Welfare in USA
Et lite innblikk i det amerikanske helsesystemet og hvordan det fungerer i praksis.
1 INTRODUCTION
1.1 Reason for choice of topic and problem areas
The welfare system in the United Kingdom seem to be a lot like the one we have here in Norway, and therefor not so interesting. In the US however, the system was seemingly very different to the one were used to here in this country and Europe in general. We wanted to find out if their welfare system actually was such a contrast to the Norwegian welfare system.
In order to do this, we had to find as much information about the American welfare system as we could.
Then we wanted to find out if the citizens of America are satisfied with this system, since rich people seem to have such a large advantage when it comes to health care. This is our first approach, and will be found further down
We also wondered if the American Constitution says anything about this subject. It is well known that Americans are very proud of their "Declaration of Independence," but does it actually protect everyone in the sense that the government is obliged to help the needy people in the society?
2 BACKGROUND INFORMATION
2.1 American health care structure:
Over the past several years, the provision of medical services has increasingly become the responsibility of the states in developed nations, except for in the United States. Unlike the rest of the world's systems, the US medical care system remains largely private and entrepreneurial (almost 90%). The U.S. Medical care system is primarily based on the private practice of medicine (HMO), job related health insurance programs and various other kinds of insurance.
The popularity of free market health care systems was fueled by it's successes in technological and pharmaceutical inventions that followed the wartime experiences. This reinforced the American public to resist government interference in health matters. Nevertheless, public funds have been used, and there has been a certain degree, public administration in the health system. The inability of millions of citizens to obtain or to pay for even minimal levels of health care forced the federal government to intervene (social security act, as a following of the Great Depression in the 1930's).
2.2 Welfare:
Another name for public assistance is welfare. Welfare is a government program that provides money, medical care, food housing and other things that people need in order to survive. People who can receive help from these welfare programs are children, elders disabled and others who cannot support their families on their current income. Public assistance benefits help many people who live below the poverty line, an income level is established for families. If your income is below this line, you would be eligible to receive this help.
2.3 Welfare in the United States:
There are many organizations that supply this public assistance, such as Salvation Army, Volunteers of America and other groups. These voluntary organizations build on ideas like the American community spirit, where thoughts like "helping a needy neighbor" are central aspects.
Back in the earlier days, welfare resembled the English system. Social governments were responsible for helping the poor. But the colonies and later the states sometimes helped the local governments provide aid. The first federal welfare program began after the Revolutionary War. Pensions was then provided to war veterans. During the Civil War these pensions were expanded to cover soldiers' widows and orphans. In the early 1900's, primary responsibility for providing welfare benefits shifted from local to state governments. During these years states enacted programs to aid dependent children and the elderly.
It was not until the early 1960's the United States government passed the Medicare and Medicaid laws that established the federal government as an integral part of the health system. Now the federal and state governments in the United States serve the poor people over 60 public assistance programs. Most people receive help through one of the four major programs. These programs are Medicaid, aid to families with dependant Children, Social Security, or Supplemental Security, or the food stamps program.
Medicaid provides free medical care to the poor people. Funds vary from state to state. In some situations , people who may be able to pay daily needs, but can't afford large medical bills may also be able to receive Medicaid. Some services paid for are bills such as doctor's visits and nursing home care. Most Medicaid funding comes from the federal government. The rest is supplied by the state. Each state runs their own Medicaid program.
AFDC (supplemental Security) provides cash benefits to dependent children and the parents or the guardians taking care of them. Most families that qualify for AFDC have just one parent in the home. About 80% of these families are headed by a women. AFDC also pays benefits to two-parent families if both parents are unemployed. Most of AFDC's funding comes from the federal government. The state provides the rest of the money and administer the program. The size of the families' payment vary from state to state.
Social Security Income is next. This provides financial aid to people in need who are at least 65 years old, blind, or disabled. The federal government finances and administers social security programs in most states, though some states supply the federal payment and are able to run their own programs.
The Food Stamp Program is the last, but not by far least. With help from this program, low income households can buy more and better food than they could otherwise afford. Each participating household receives a certain number of coupons called food stamps. The stamp are issued by the federal government. The number of stamps a household receives varies with the families size, income, and expenses. Cooperating grocery stores accept stamps like money for food purchases only.
There are other programs such as energy assistance and public housing. Energy assistance, which is federally financed but administrated by the states, helps people pay fuel bills. Public housing provides low cost rental apartments in
government owned buildings. State and local governments fund and administer their own general assistance programs. These programs provide financial aid for needy people who do not qualify for other types of welfare. People waiting to receive assistance from other programs also may get temporary emergency aid from General Assistance.
3 HOW DOES THE PUBLIC FEEL ABOUT THE WELFARE SYSTEM IN THE US?
The criticisms of welfare ranges over a number of social end economic issues. Some people criticize welfare programs for not providing high enough benefits to eliminate poverty. Spending on welfare would have to increase greatly to eliminate poverty, and many people believe the cost is already too high.
Many critics of the welfare system charge that providing a steady income to needy people encourages idleness. Actually, most welfare benefits go to elderly, blind, disabled people and mothers with young children. But welfare does discourage some recipients from working harder by reducing benefits if their income increases.
Many people also criticize the welfare system for being too complex and costly to administer. Each program has its own eligibility requirements and ways of calculating benefits, and these rules vary from state to state. Public officials collect detailed information about applicants to determine their eligibility for benefits. This process is time-consuming and costly. Some people cheat the system by not reporting all the income they earn. But suppliers of services to welfare recipients account for most of the fraud in welfare. For example physicians. They make up false bills and get overpaid.
Most Americans agree that welfare is needed because many people do need help. To illustrate these shortcomings; 17% of the population, about 40 million people are not covered by insurance, and another 40 million are only partially covered. Despite highly trained staff and stock piles of high technology, the United States health care system is a statistical failure. Early in the 1990's, USA was ranked 16th in the world for infant mortality rates, and life expectancies fell short compared with other industrialized countries.
It is claimed that the systems costs are out of control, that the system is almost incompetent in providing the public with a standard level of care, and that reforms must be taken to contain the swelling costs. President Clinton has made the most visible attempt to reform the health care program in the United States. His goal is to make a reform that the public will understand and accept.
4 THE AMERICAN HEALTH CARE SYSTEM
The American Health care system is very different compared to the Norwegian. In Norway we get free treatment whenever we get ill. The government covers all cost. In the US things work differently. When you get ill, you are independent of insurance. We chose this topic because of the current political situation i Norway. In Norway this issue is burning hot right now. The Norwegian political life has in the last ten years taken a solid right-turn. This means more privatising and less government intervention. The parties on the right side mean that also the health care system should be privatised. Many people find this thought terrifying. They're afraid this will lead to a huge gap between the ones that can "afford to get ill" and those who can't.
In this assignment we will try to answer the following questions.
· How does the American health care system work? What are the advantages and disadvantages of this system?
· How does the Norwegian health care system work? Shall we continue in the same tracks or should we try ideas from the American model?
5 THE AMERICAN HEALTH CARE SYSTEM - THE BRIGHT SIDE
The cost of the US health care system is the highest in the world (currently almost 12 percent of GNP, $2500 annually per person) and growing rapidly, far faster than inflation. It has been estimated that the cost will reach 15 percent of the GNP by the year 2000.
As in most countries, the American health system can be divided in two parts: Public and private. The thing however which is unique for the US is the size of the private sector when it comes to health care. Only a small part of the budget is spent on health and medicare. Because of this people have to pay for their own health seperately, instead of through the tax bill.
Surgery and a long-term hospitalization can cost thousands of dollars. If it hadn't been for the huge insurance system, these things could have been very expensive for the common American. People with a high income expect their employer to pay for their insurance. This people receives world class health services because they can chose from top drawer hospitals with highly skilled specialists. 6 THE AMERICAN
HEALTH CARE SYSTEM - THE DARK SIDE
We shall now look at the minority of Americans when it comes to health insurance. The ones that can't afford it. The latest numbers tell us that approximately 42 million between persons in the USA are not insured. 32 millions of them are consideres poor. Included in these figures are around 10 million children (3 million poor). They have one thing in common: They are under the poverty line. It is estimated that around 30% of the population in USA are sunk in poverty. The big question is of course what happens when they get ill.
In order to get medical attention to all inhabitants, the US government buy insurances for they who are not insured. This however, is only the reality for very few people. Many families have so little money that they have to prioritize food and clothing before insurance. In 1965 the terms Medicare and Medicaid were brought into the American vocabulary. These terms were meant to help the poor and old persons of the population. Let's look at how these systems work:
Medicare: People aged 65 or more and people with a long-term disease are covered by Medicare. Medicare provides them free hospital treatment, but that's about it. For every other health care service, like prescriptions and nursing homes, they have to use their own money. It's estimated that Medicare only covers half of the costs for a regular Medicare-user. Some people even claim that people over 65 paid less for health care in 1960, before the Medicare system was established!
Medicaid: Is a system for those who are under 65 years, but still is poor. About 40% of the poor people are members of this system. These people are the ones that didn't dream The American Dream. They are the ones that don't have an "excuse" to be poor. These people have to go through a so called "means test" to prove that they really are poor. This test however isn't the only problem they will encounter in the Medicaid system. Due to strict budgets Medicaid can't offer its users the top quality health personnel. Many doctors are also very reluctant when it comes to serving Medicaid members and some even refuse to serve them at all.
HOW DOES THE INSURANCE SYSTEM WORK?
To understand how the insurance system works, we will now dive in to the life of Texas-based construction worker Tom Olsen.
Tom (35) is married to Karen (32). They have two children: Paul at 8 and Mary at 10. Every year he pays around $500 to the Health Maintenance Organization (HMO). It is his employer who has provided this service for him. In addition to this his wife pays around $250. This fee covers almost everything (except special medication) his family will need when it comes to medicare. Tom has selected his own so called primary care physician. This is the doctor they visit for routine check-ups and the doctor they visit if they get ill. This doctor also has the responsibility to make arrangements for Tom and his family to see a specialist if needed. Every treatment prescribed by the primary care physician is covered by HMO insurance.
Here's a little summary of what the family can get from their insurance policy:
Tom receives $150 of covered physician care in two visits.
Karen receives $350 of covered physician care in 5 visits.
Mary receives $800 of covered physician services in 16 visits, $3,000 covered surgery; and $10,000 in covered hospital charges - all in network.
Paul receives covered physician charges of $300 in 6 visits.
(The example is taken from Yahoo's Health pages at www.health.yahoo.com)
This example is taken from one of the biggest insurance organizations in the US. Other big insurance organizations are Preferred Provider Organization (PPO) and Traditional Indemnity Plan. As the majority of Americans, Tom has a health insurance that covers most of his needs. Most American employees is usually covered by an insurance provided by their employers. The US Army also have a big insurance network.
7 HEALTH AND POLITICS
The big health issues are dealt with on a federal level as well as in the different states. The kind of health care provided depends on which party who is in charge in the Senate and in the White House. For the last years the power structure between the Democrats and the Republicans has been even, with the Republicans with the majority in the Senate and the Democrats in charge of the presidency. This could change in the next couple of weeks when the voting mayhem hopefully is over. As always health issues are burning hot in the US when an election nears. Let's take a look on what the two parties stand for.
Democrats: During president Clinton's period the Democrats started a big reform which was meant to change a lot of the system. Through more government intervention and of course more government money, they tried to get more equality into what they like to call "The world's biggest democracy." This means more money to both Medicaid and Medicare.
Republicans: Senator Bush's major goal on the health issues is to strenghten the Medicare. The Republicans mean that the welfare of senior citizens is an important thing. In his main program (on his webpage) he doesn't mention Medicaid.
The thing that both parties have in common is the view on taxes. It is a known fact that you can't win an American election if you say you intend to increase taxes. Therefore, the one who in the end get's the presidency will have a hard job raising money to pay for their promises.
8 THE NORWEGIAN SITUATION
Before the conclusion we will take a brief look on the Norwegian situation. In Norway we are used to a public health care system. In return from rates and taxes we receive free hospital coverage. We also get a lot of government subsidies through "folketrygden" when we need to see a doctor.
Even if we are among the countries which spend the most money on health care, we don't have the health care quality that's expected from one of the world's wealthiest nations. In Norway these days we can clearly see a wave of right-wing attitudes. In other words we are moving even closer towards the American way of running a welfare state. The parties on the right-wing mean that something is wrong with the management of the health system. They mean that everything from hospitals to nursing homes should be run by professional business managers instead of politicians. Because this parties also want less rates and taxes, it looks like everyone who want health services have to pay a lot more from their own pocket in. The right-wing parties mean this is the only way people can choose for themselves what kind of health services they want.
9 CONCLUSION
Just like every other country in the world, The Unites States of America has citizens that are not capable living a "normal" life without the help of others. When these people have no family, friends or others caring for them, the government becomes responsible for them. This is exercised through the welfare system. We wanted to find out how the US government handled this problem, and if their solution was sufficient enough. We learned that they have a complex system, that may be difficult to understand to common people. The system itself is quite sufficient in theory, meaning that it could help and protect everyone. The problem however, is the lack of funds, and the sometimes poor administration.
Compared to the Norwegian system, it is not enormously different. The biggest difference lies in that our system takes care of everyone, while the US system only focus on the most needy. People above the poverty line are usually left to themselves, they need to get insurance in order to be secure.
We also found out that Americans are not so satisfied with their system. They say the reason for this is insufficient administration and the complexity of the system. They are of the opinion that the system in a way is unfair and easy to cheat for those who the means and resources. A consolation for them is that reforms are on their way and progress is already being made.
The Declaration of Independence is not clear on this subject, but it is stated indirectly that Americans have a constitutional right to be protected by the government when it comes to health care and welfare issues.
The American health care system is excellent if you can afford it, but if you can't - you better stay on your feet. In my opinion this system only strenghtens the class distinctions. In Norway we have a history of strong solidarity and eqonomical equality. Even if we have a very high standard of living we have to remember that there will always be people who won't fit into the society and earn their own money. A health care system based on the American model will from where we see it create an elite who can afford to get ill. Is this what we want?
Sources
Cappelen Consider
Illustrert vitenskap Verden i dag
http://www.free-market.net/features/spotlight/9803.html
http://www.selfgov.org/medicine.html
http://www.jec.no/debatt/politisk/helsev.htm
http://www.healthinsurance.org/
http://www.money.com/money/101/lessons/17/topten.html
http://www.census.gov/
www.hcta.gov/stats/stats.htm
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