Question

Discuss statistics on the different types of insurance held by the U.S. population. Emphasize the different Medicare plans: Part A, Part B, and Part D, the State Children’s Health Insurance Program and identify what types of private insurance is available and how it is funded. What type of insurance (public or private) contributes more to the percentage of GDP that is associated with health care costs?

Answer 1

The US insurance industry wrote net premiums worth $1.2 trillion in 2017. Life and health insurance, both public and private accounted for 52% of it and the remaining 48% was for general insurance. There were 5954 insurance companies in 2017 and about 50% of these companies were general insurance companies. The remaining 50% included life, health and various other insurances. Insurance industry contributed $602.7 billion (3.1%) to the nation’s GDP and employed 2.7 million people. 20% of US healthcare expenditure is for Medicare which covers 17.2% of the US population. Medicare part A covers inpatient and nursing expenses. Part B covers outpatient expenses and professionally administered drug expenses. Part D on the other hand mostly covers self-administered drugs expenses. Medicare spending as a percentage of GDP came to about 3% most of it being covered by part A and B and a relatively small percent covered by Part C. Children’s Health Insurance Program provides health insurance to eligible children and has covered almost 95% of children in the United States. Private health care is mostly purchased by firms to cover health expenses of their employees and occasionally by individuals also. Most private health insurance in USA is employment based and is paid for mostly by the employer. About 60% of US citizens are insured this way by their employer whereas only about 9% buy health insurance directly. Typical contribution by an employer would be 85% of their insurance premium for the employee and 75% of the insurance premium for the employee’s dependents. The remaining is paid by the employees themselves. When an employee is insured they’re generally paid lesser to cover the costs of insurance. Many colleges and schools also have a private insurance plan sponsored by the school which is mandatory for their students. Public insurance companies contributes more to the percentage of GDP associated with health care costs because public insurance companies are more transparent and will not look to reject a claim often unlike the private insurance companies. In 2011 Medicare and Medicaid together accounted for 62.8% ($249.9 billion) of total aggregate inpatient hospital costs in the United States whereas all private insurance companies together covered only 29% ($112.5 billion) of total aggregate inpatient hospital costs.