Consumers and insurance benefits issues paper - Essay Example

The different issues under the healthcare system include Medicare, Medicaid and insurance. This essay will focus on the historical framework of insurance including management and technology implications in this sector. While Medicare covers hospital insurance, medical insurance, doctor’s service and outpatient hospital care, Medicaid has provided health care since 1965. Medicaid provides essential health support to Americans of all ages. Medicare does not pay for all of a covered persons medical costs and from January 2006, provides coverage for prescription drugs through a complex coverage model (Wikipedia).

Medicare is partially financed by taxes on wages and in 2003, Medicare accounted for almost 13% of the entire Federal budget. Thirty three cents of every dollar spent on health care in the U.S. is paid by Medicare and Medicaid. Under the circumstances, health insurance becomes necessary. Health insurance spreads the risk of health care expenses and provides people access to medical services. Since the late 19th century, states have been regulating private health insurance companies and products with a view to assure financial solvency of the insurance companies, promote risk spreading, protect consumers against fraud, and ensure that consumers receive what they are promised (Kofman & Pollitz, 2006).

Although the business of insurance was traditionally reserved for the state, in 1974, the federal government became the primary regulator of health benefits provided by the employer. During 1980s and 1990s, Congress established minimum standards for group health insurance. Today every state follows certain basic standards for health insurance. They ensure that insurers are financially solvent and in a position to settle claim promptly. In the private health insurance market, the insurers minimize their risks to avoid losses.

They deny coverage to individuals who have health problems. Approximately