The following HTML text is provided to enhance online
readability. Many aspects of typography translate only awkwardly to HTML.
Please use the page image
as the authoritative form to ensure accuracy.
Although 26 percent of the American population have health coverage through public programs, the majority of Americans, approximately 61 percent in 1994, are covered by health insurance arranged through their place of employment.2 The private sector is especially important when it comes to the coverage of children, because in 1995 approximately 59 percent of children were covered by their parents' employer-based plans. Eighty-three percent of the 9.8 million children who are not presently covered are dependents of working Americans.3 This appendix will look at the history and present characteristics of private sector health insurance and the pros and cons of several policy proposals designed to increase health insurance coverage for children.
A Brief History Of Employer-Based Health Insurance
The history of health insurance in the United States has always been tied to the development of modern medicine. There was little reason to buy health insurance until medicine created the ability to affect medical outcomes. The cost of these new forms of medical care created a desire to spread the risk of a relatively large medical expenditure among a large number of individuals, any one of whom would face a low probability of an expensive medical condition.4 Although the development of modern scientific medicine can be traced to the 19th century, several developments during and after World War II were most important in shaping the unique form of health insurance in the United States.5
1
This appendix was prepared at the request of the Committee on Children, Health Insurance, and Access to Care as background material about private sector health insurance coverage of children. The views expressed are the author's and are not necessarily shared by any other member of the committee, the Institute of Medicine, or the American Enterprise Institute.
2
Employee Benefit Research Institute, Sources of Health Insurance and Characteristics of the Uninsured, EBRI Issue Brief No. 170, February 1996.
3
Alliance for Health Reform, Health Coverage: Insuring America's Children, March 1997, Figure 2.
4
For readable explanations of the basic economics of insurance, see Mark A. Hall, Reforming Private Health Insurance. (Washington, D.C.: The AEI Press, 1994), especially Chapter 2; and Mark V. Pauly, "Overinsurance: The Conceptual Issues," in Pauly, ed., National Health Insurance: What Now, What Later, What Never? (Washington, D.C.: American Enterprise Institute, 1980), pp. 201-219.
5
For reviews of the history of American medicine and health care delivery, see Paul Starr, The Social Transformation of American Medicine. (New York: Basic Books, Inc., 1982); Herman M. Somers and Anne R. Somers, Doctors, Patient, and Health Insurance. (Washington, D.C.: The Brookings Institution, 1961 ); and Marilyn J. Field and Harold T. Shapiro, eds., Employment and Health Benefits. (Washington, D.C.: National Academy Press, 1993), pp. 49-86.
Items in cart [0]
