The US health care system is pretty complicated. Many presidents tried so hard to “fix” or improve it, yet results were not as expected. The most recent “reform” of the health care system was Obamacare, which ended up in disappointments and complaints. Almost every presidential candidate proposes ideas about health care. As an American, do you really understand this complicated system?

In general, the health care includes three parts. First one is commercial health insurance, which is marketization. Government only supervises the function of market (Obamacare changed this). This part takes the biggest portion of national health expenditure. Most insurance plans are offered by employers to their employees. They can choose big or small group insurances according to their sizes. Insurance companies sell the rest insurance plans directly to individuals. Obviously, the latter one would be more expensive.

The second one is Medicare, which is funded by the federal government. Most retired people (age over 65) are covered in the plan. Many insurance companies provide a “business enhanced version” to them for more comprehensive health care, which charges some premium.

The last one is Medicaid for low-income people, which is ran and supervised by each state independently. Therefore, each state has different regulations of how Medicaid functions within the state. In fact, Medicaid in many states are operated by insurance companies, with block grant provided by state governments.

How capital works?

One thing special about the US health care is that there are many stakeholders in the system. Big companies (for example, Ford) will establish a fund by itself to make health plans for employees and reimburse via its fund. Insurance companies (for example, Blue Shield) will take the responsibility to run the health care system for Ford, only charging some administrative cost. In-network, including PPO, HMO, POS, EPO and etc., is a complex mechanism. Every insurance plan will point you a specific in-network, if you go there, you will be paid more by the insurance company. I personally believe that the in-network system is not a good mechanism, it is the most important reason that makes the price of medical service so high.

Hospitals and doctors cooperate with enterprises and insurance companies in order to join the in-network system to have more patients. In order to earn more money, they will give patients sky-hill bills. In the meantime, they often give big discounts to insurance companies of the bill. We have no ideas how much the insurance companies actually pay to hospitals. The pharmaceutical industry also has the right to make price policies that meet their interests. Expensive medicines now become usual in our life. Doctors, hospitals, insurance companies, pharmaceutical factories are beneficiaries, no one can claim its innocence. Who pay the expensive and opaque bill? The customers, the patients, who suffer from illness and financial difficulties.

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