Health insurance

Definition

Health insurance is insurance that pays for all or part of a person's health care bills. The types of health insurance are group health plans, individual plans, workers' compensation, and government health plans such as Medicare and Medicaid.

Health insurance can be further classified into feefor-service (traditional insurance) and managed care. Both group and individual insurance plans can be either fee-for-service or managed care plans.

The following are types of managed care plans:

• Health Maintenance Organization (HMO)
• Preferred Provider Organization (PPO)

Purpose

The purpose of health insurance is to help people cover their health care costs. Health care costs include doctor visits, hospital stays, surgery, procedures, tests, home care, and other treatments and services.

Description

Health insurance is available to groups as well as individuals. Government plans, such as Medicare, are offered to people who meet certain criteria.

Group and individual plans can be further classified as either fee-for-service or managed care. Cancer patients may have specific concerns, such as the freedom to select specialists, that play a factor in choosing a health care plan. Fee-for-service plans traditionally offer greater freedom when choosing a health care professional. Managed care often limits a patient to health care professionals listed by the managed care insurance company.

Group health plans

A group health plan offers health care coverage for employers, student organizations, professional associations, religious organizations, and other groups. Many employers offer group health plans to employees and their dependents as a benefit of working with that particular employer (medical benefits). The employer may pay for part or all of the insurance cost (premium).

When an employee leaves a job he or she may be eligible for continued health insurance as a result of the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA). This federal law protects employees and their families in certain situations by allowing them to keep their health insurance for a specified amount of time. The individual must, however, pay a premium to keep their insurance plan in effect It is important to note that COBRA only applies under certain conditions, such as job loss, death, divorce, or other life events. The COBRA law usually applies to group health plans offered by companies with more than 20 employees. Some states have laws that require employers to offer continued health care coverage for people who do not qualify for COBRA. Each state's insurance board can provide additional information.

Individual plans

These type of health care plans are sold directly to individuals.

Fee-for-service

Fee-for-service is traditional health insurance in which the insurance company reimburses the doctor, hospital, or other health care provider for all or part of the fees charged. Fee-for-service plans may be offered to groups or individuals. This type of plan gives people the highest level of freedom to choose a doctor, hospital, or other health care provider. A person may be able to receive medical care anywhere in the United States and, often, in the world.

Under this type of insurance a premium is paid and there is usually a yearly deductible, which means benefits do not begin until this deductible is met. After the person has paid the deductible (an amount specified by the terms of the insurance policy) the insurance company pays a portion of covered medical services. For example, the deductible may be $250 so the patient pays the first $250 of yearly covered medical expenses. After that he or she may pay 20% of covered services while the insurance company pays 80%. The exact percentages and deductibles will vary with each policy. The person may have to fill out forms (claims) and send them to the insurance company to have their claims paid.

People who have cancer may be attracted to the freedom of choice that traditional fee-for-service plans offer. However, they will most likely have higher out-of-pocket costs than they would in a managed care plan.

Managed care

Managed care plans are also sold to both groups and individuals. In these plans a person's health care is managed by the insurance company. Approvals are needed for some services, including visits to specialist doctors, medical tests, or surgical procedures. In order for people to receive the highest level of coverage they must obtain services from the doctors, hospitals, labs, imaging centers, and other providers affiliated with their managed care plan.

People with cancer who are considering a managed care plan should check with the plan regarding coverage for services outside of the plan's list of participating providers. For example, if a person wants to travel to a cancer center for treatment, he or she should find out what coverage will be available. In these plans coverage is usually much less if a person receives treatment from doctors and hospitals not affiliated with the plan.

HEALTH MAINTENANCE ORGANIZATION (HMO).

An HMO is a type of managed care called a prepaid plan. This type of coverage was designed initially to help keep people healthy by covering the cost of preventive care, such as medical checkups. The patient selects a primary care doctor, such as a family physician, from an HMO list. This doctor coordinates the patient's care and determines if referrals to specialist doctors are needed. People pay a premium, usually every month, and receive their health care services (doctor visits, hospital care, lab work, emergency services, etc.) when they pay a small fee called a copayment. The HMO has arrangements with caregivers and hospitals and the copayment only applies to those caregivers and facilities affiliated with the HMO. This type of coverage offers less freedom than fee-for-service, but out-of-pocket health care costs are generally lower and more predictable. A person's out-of-pocket costs will be much higher if he or she receives care outside of the HMO unless prior approval from the HMO is received.

PREFERRED PROVIDER ORGANIZATION (PPO).

A PPO combines the benefits of fee-for-service with the features of an HMO. If patients use health care providers (doctors, hospitals, etc.) who are part of the PPO network, they will receive coverage for most of their bills after a deductible and, perhaps a copayment, is met. Some PPOs require people to choose a primary care physician who will coordinate care and arrange referrals to specialists when needed. Other PPOs allow patients to choose specialists on their own. A PPO may offer lower levels of coverage for care given by doctors and other professionals not affiliated with the PPO. In these cases the patient may have to fill out claim forms to receive coverage.

Government health plans

Medicare and Medicaid are two health plans offered by the U.S. government. They are available to individuals who meet certain age, income, or disability criteria. TRI-CARE Standard, formerly called CHAMPUS, is the health plan for U.S. military personnel.

MEDICARE.

Medicare, created in 1965 under Title 18 of the Social Security Act, is available to people who meet certain age and disability criteria. Eligible people include:

• those who are age 65 years and older
• some younger individuals who have disabilities
• those who have end-stage renal disease (permanent kidney failure)

Medicare has two parts: Part A and Part B. Part A is hospital insurance and helps cover the costs of inpatient hospital stays, skilled nursing centers, home health services , and hospice care . Part B helps cover medical services such as doctors' bills, ambulances, outpatient therapy, and a host of other services, supplies, and equipment that Part A does not cover.

MEDICAID. Medicaid, created in 1965 under Title 19 of the Social Security Act, is designed for people receiving federal government aid such as Aid to Families with Dependent Children. This program covers hospitalization, doctors' visits, lab tests, and x rays. Some other services may be partially covered.

TRICARE. Eligible military families may enroll in TRICARE Prime, which is an HMO; TRICARE Extra, which offers an expanded choice of providers; or TRI-CARE Standard, which is the new name for CHAMPUS.

Supplemental insurance

Supplemental insurance covers expenses that are not paid for by a person's health insurance. Cancer insurance is a specific form of supplemental insurance that covers expenses that are not normally covered by health insurance but are specifically related to cancer treatments.

Workers' compensation

Workers' compensation covers health care costs for an injury or illness related to a person's job. Medical conditions that are unrelated to work are not covered under this plan. In some cases an evaluation is done to determine whether or not the medical condition is truly related to a person's employment.

Special concerns

There are a variety of special concerns that people with cancer have regarding health insurance.

Waiting period

Insurance may not take effect immediately upon signing up for a policy. Sometimes a waiting period exists, during which time premiums are not paid and benefits are not available. Health care services received during this period are not covered.

Preexisting condition

A preexisting condition, such as cancer, is a concern when choosing insurance. If a person received medical advice or treatment for a medical problem within six months of enrolling in new insurance, this condition is called preexisting, and it can be excluded from the new coverage. The six-month time lapse before a person enrolls in a new health insurance policy is called the look-back period. If a person received medical advice, recommendations, prescription drugs, diagnosis, or treatment for a health problem during the look-back period, he or she is considered to have a preexisting condition. People should check with their state insurance boards to determine preexisting condition rules.

Coverage renewal

Some people with diseases such as cancer worry about group health plans renewing their coverage. As long as the person meets the plan's eligibility requirements and the plan covers similar cases, the coverage must be offered. Coverage cannot be cancelled for health reasons.

Experimental/investigational treatments

Experimental/investigational treatments are often a concern for people with cancer. These treatments may or may not be covered by a person's health insurance. Some states mandate coverage for investigational treatments. People should check with their insurance plan and state insurance board to determine if coverage is available.

A clinical trial is a type of investigational treatment. Costs involved include patient care costs and research costs. Usual patient care costs that may be covered by insurance are visits to the doctor, stays in the hospital, tests, and other procedures that occur whether a person is part of an experiment or is receiving traditional care. Extra patient care costs that may or may not be covered by insurance are the special tests required as part of the research study.

Health insurance plans have policies regarding coverage for clinical trials . People should determine their level of health insurance coverage for clinical trials, and they should learn about the costs associated with a particular study.

In 2000, Medicare began covering certain clinical trials. The trials must meet specific criteria in order to be covered. In eligible trials treatments and services such as tests, procedures, and doctor visits that are normally covered by Medicare are covered. Some items may not be covered including investigational items like the experimental drug itself or items that are used only for data collection in the clinical trial. Patients should check to see if the clinical trial sponsor is providing the investigational drug at no charge.

Complementary therapies

Complementary cancer therapies are another coverage consideration. A cancer patient undergoing this type of therapy should check with his or her insurance policy regarding coverage.

Cancer screening coverage

Cancer screening coverage is an important consideration. As of 2000, 44 states mandate insurance coverage of screenings for at least one of these cancers: breast, cervical, prostate, and colorectal. Breast cancer screening coverage is most commonly mandated. Most mandates refer to screenings that follow the American Cancer Society guidelines. A Women's Health Initiative Observational Study investigated the use of cancer screenings by more than 55, 000 women between September 1994 and February 1997. The study found that the type of insurance a woman had was linked with the number of cancer screenings she reported. Women age 65 years and older who had Medicare plus prepaid insurance were more likely to report that they had screenings than those who had Medicare alone.

Health care regulations

The Health Insurance Portability and Accountability Act (HIPAA), passed by the U.S. Congress in 1996, offers people rights and protections regarding their health care plans. Because of HIPAA there are limits on preexisting condition exclusions, people cannot be discriminated because of health factors, there are special enrollment requirements for people who lose other group plans or have new dependents, small employers are guaranteed group health plan availability, and all group plans have guaranteed renewal if the employer wishes to renew. In summary these rights and protections include:

• Portability. This is the ability for a person to get new health insurance if a change is desired or needed.
• Availability. This refers to whether or not health insurance must be offered to a person and his or her dependents.
• Renewability. This refers to whether or not a person is able to renew his or her health plan.

The Women's Health and Cancer Rights Act of 1998 requires health insurance plans to cover breast reconstruction related to a mastectomy if the patient chooses to have reconstruction and if the health plan covered the mastectomy. The law became effective for different health plans on different dates, with the earliest date of effect being October 21, 1998.

Resources

BOOKS

Schwartz, Alan N. Getting the best from your doctor. Minneapolis, MN: Chronimed Publishing, 1998.

PERIODICALS

Hsia, Judith et al., "The Importance of Health Insurance as aDeterminant of Cancer Screening: Evidence from the Women's Health Initiative." Preventive Medicine (September 2000): 261-70

Rathore, Saif S. et al., "Mandated Coverage for Cancer-Screening Services: Whose Guidelines Do States Follow?" American Journal of Preventive Medicine (August 2000): 71-8

ORGANIZATIONS

Agency for Health Care Research and Quality, Checkup on Health Insurance Choices 27 March 2001 <http://www.ahcpr.gov/consumer/insuranc.htm>

National Cancer Institute, Cancer Trials and Insurance Coverage:A Resource Guide 4 May 2001 <http://cancertrials.nci.nih.gov/understanding/indepth/insurance>

Health Care Choices Our Newsletter: Better Health Choices (January 1999) 9 May 2001 <http://www.healthcarechoices.org/newslet/news199brreconst.htm>

Health Care Financing Administration HIPAA Online 27March 2001 <http://www.hcfa.gov>

TRICARE The History of CHAMPUS and its Evolving Role 9May 2001 <http://www.tricare.osd.mil/factsheets/history.pdf>

OTHER

"Supplemental Insurance Policies May Be Offered Under aFlex Plan, IRS Says" In Flex Plan Handbook: November 1999 9 May 2001 5 July 2001 <http://207.226.10.52/tpg/pen_ben/flex/flexnov99.html>

Rhonda Cloos, R.N.

KEY TERMS

Clinical trial

—A study to determine the efficacy and safety of a drug or medical procedure. This type of study is often called an experimental or investigational procedure.

Health care provider

—A doctor, hospital, lab, or other professional person or facility offering health care services.

Health insurance claim

—A bill for health care services that is turned in to the health insurance company for payment.

QUESTIONS TO ASK THE DOCTOR

• What types of insurance do you accept?
• Does your office file claims for patients?
• Will your office get pre-authorization for procedures where it is required?
• Do you have a list of providers for my type of insurance in case a referral is necessary?
• If an experimental procedure is recommended, what costs will be involved?

HEALTH INSURANCE

Health insurance originated in the Blue Cross system that was developed between hospitals and schoolteachers in Dallas in 1929. Blue Cross covered a pre-set amount of hospitalization costs for a flat monthly premium and set its rates according to a "community rating" system: Single people paid one flat rate, families another flat rate, and the economic risk of high hospitalization bills was spread throughout the whole employee group. The only requirement for participation by an employer was that all employees, whether sick or healthy, had to join, again spreading the risk over the whole group. Blue Shield was developed following the same plan to cover ambulatory (i.e., non-hospital) medical care.

The Blue Cross/Blue Shield plans were developed to complement the traditional method of paying for health care, often called fee-for-service. Under this method, a physician charges a patient directly for services rendered, and the patient is legally responsible for payment. The Blue Cross/Blue Shield plans are called indemnity plans, meaning they reimburse the patient for medical expenses incurred. Indemnity insurers are not responsible directly to physicians for payment, although physicians typically submit claims information to the insurers as a convenience for their patients. For insured patients in the fee-for-service system, two contracts are created: one between the doctor and the patient, and one between the patient and the insurance company.

Traditional property and casualty insurance companies did not offer health insurance because with traditional rate structures, the risks were great and the returns uncertain. After the Blue Cross/Blue Shield plans were developed, however, the traditional insurers noted the community rating practices and realized that they could enter the market and attract the healthier community members with lower rates than the community rates. By introducing health screening to identify the healthier individuals, and offering lower rates to younger individuals, these companies were able to lure lower-risk populations to their health plans. This left the Blue Cross/Blue Shield plans with the highest-risk and costliest population to insure. Eventually, the Blue Cross/Blue Shield plans also began using risk-segregation policies and charged higher-risk groups higher premiums.

During the 1960s, Congress enacted the medicare program to cover health care costs of older patients and medicaid to cover health care costs of indigent patients (Pub. L. No. 81-97). The federal government administers the Medicare Program and its components: Part A, which covers hospitalization, and Part B, which covers physician and outpatient services. The federal government helps the states fund the Medicaid Program, and the states administer it. Medicare, Part A, initially covered 100 percent of hospitalization costs, and Medicare, Part B, covered 80 percent of the usual, customary, and reasonable costs of physician and outpatient care.

Under both the fee-for-service system of health care delivery, where private indemnity insurers charge premiums and pay the bills, and the Medicare-Medicaid system, where taxes

fund the programs and the government pays the bills, the relationship between the patient and the doctor remains distinct. Neither the doctor nor the patient is concerned about the cost of various medical procedures involved, and fees for services are paid without significant oversight by the payers. In fact, if more services are performed by a physician under a fee-for-service system, the result is greater total fees.

From 1960 to 1990, per capita medical costs in the United States rose 1,000 percent, which was four times the rate of inflation. As a consequence, a different way of paying for health care rose to prominence. "Managed care," which had been in existence as long as indemnity health insurance plans, became the health plan of choice among U.S. employers who sought to reduce the premiums paid for their employees' health insurance.

managed care essentially creates a triangular relationship among the physician, patient (or member), and payer. Managed care refers primarily to a prepaid health-services plan where physicians (or physician groups or other entities) are paid a flat per-member, per-month (PMPM) fee for basic health care services, regardless of whether the patient seeks those services. The risk that a patient is going to require significant treatment shifts from the insurance company to the physicians under this model.

Managed care is a highly regulated industry. It is regulated at the federal level by the Health Maintenance Organization Act of 1973 (Pub. L. No. 93-222) and by the states in which it operates. The health maintenance organization (HMO) is the primary provider of managed care, and it functions according to four basic models:

1. The staff-model HMO employs physicians and providers directly, and they provide services in facilities owned or controlled by the HMO. Physicians under this model are paid a salary (not fees for service) and share equipment and facilities with other physician-employees.
2. The group-model HMO contracts with an organized group of physicians who are not direct employees of the HMO, but who agree to provide basic health care services to the HMO's members in exchange for capitation (i.e., PMPM) payments. The capitation payments must be spread among the physicians under a pre-determined arrangement, and medical records and equipment must be shared.
3. The individual-practice-association (IPA) model HMO is based around an association of individual practitioners who organize to contract with an HMO, and as a result treat the HMO's patients on a discounted fee-for-service basis. Although there is no periodic limit on the amount of payments from the HMO, the physicians in an IPA must have an explicit agreement that determines the distribution of HMO receipts and sets forth the services to be performed.
4. The direct-service contract/network HMO model is the most basic model. Under this variation, an HMO contracts directly with individual providers to provide service to the HMO's patients, on either a capitated or discounted fee-for-service basis.

All four of these models share one very important feature of HMOs: The health care providers may not bill patients directly for services rendered, and they must seek any and all reimbursement from the HMO.

Another form of managed care is the preferred provider organization (PPO). A PPO does not take the place of the traditional fee-for-service provider (as does a staff–model HMO), and does not rely on capitated payments to providers. Instead, a PPO contracts with individual providers and groups to create a network of providers. Members of a PPO may choose any physician they wish for medical care, but if they choose a provider in the PPO network, their copayments—predetermined, fixed amounts paid per visit, regardless of treatment received—are significantly reduced, thus providing the incentive to stay in the network. No federal statutes govern PPOs, but many states regulate their operations. There are three basic PPO models:

1. In a gatekeeper plan, a patient must choose a primary-care provider from the PPO network. This provider tends to most of the patient's health care needs and must authorize any referrals to specialists or other providers. If the patient "self-refers" without authorization, the cost savings of the PPO will not apply.
2. The open-panel plan, on the other hand, allows a patient to see different primary-care physicians and to self-refer within the PPO network. The financial penalties for seeking medical care out of the PPO network are much greater in this less-structured model than in the gatekeeper model.
3. The exclusive-provider plan shifts onto the patient all of the costs of seeking medical care from a non-network provider, and in this respect it is very similar to an HMO plan.

Other forms of health care delivery that encompass features of managed care include point-of-service (POS) plans and physician-hospital organizations (PHOs). A POS plan is a combination of an HMO and an indemnity insurance plan, allowing full coverage within the network of providers and partial coverage outside of it. A patient must choose one primary-care physician and might pay a higher monthly rate to the POS if the physician is not in the HMO network. Another version of the POS plan creates "tiers" of providers, which are rated by cost-effectiveness and quality of patient outcomes. A patient may choose a provider from any tier and then will owe a monthly premium payment set to the level of that tier.

A PHO is very similar to an IPA in that it is an organization among various physicians (or physician groups) and a hospital, set up to contract as a unit with an HMO. Physician-hospital networks, within HMOs or through PHO contracts, further the managed-care mission of "vertical integration," which is the coordination of health care (and payment for that care) from primary care through specialists to acute care and hospitalization.

Managed care has affected Medicare as well as private health care. In 1983, Congress changed the payment system for Medicare, Part A, from a fee-for-service-paid-retroactively system to a prospective payment system, which fixes the amount that the federal government will pay based on a patient's initial diagnosis, not on the costs actually expended (Pub. L. No. 98-369). Medical diagnoses are grouped according to the medical resources that are usually consumed to treat them, and from that grouping is determined a fixed amount that Medicare will pay for each diagnosis. Although this system is applicable only to the acute-care hospital setting, it is clearly an example of shifting the risk of the cost of health care from the payer (in this case, Medicare) to the provider, which is an important element of managed care. In addition, many HMOs now offer Medicare managed-care plans, and many older citizens opt for these plans because of their paperless claims and preset co-payments for physician visits and pharmaceuticals.

The most recent development in the area of health insurance is the medical savings account (MSA), a pilot program that was created by the Health Insurance Portability and Accountability Act of 1996 (Pub. L. No. 104-191). The premise behind the MSA is to take the bulk of the financial risk, and premium payments, away from the managed-care and indemnity insurers; and to allow individuals to save money, tax free, in a savings account for use for medical expenses. Individuals or their employers purchase major-medical policies, medical insurance policies with no coverage for medical expenses until the amount paid by the patient exceeds a predetermined maximum amount, such as $2,500 per year. These policies have extremely high deductibles and correspondingly low monthly premiums. The participants take the money that they would have spent on higher premiums and deposit it in an MSA. This money accrues through monthly deposits and also earns interest, and it can be spent only to pay for medical care. The major-medical policy applies if a certain amount equal to the high deductible is expended or if the account is depleted. MSAs do not incorporate any of the cost-controlling aspects of managed-care organizations, and instead depend on competition among providers for patients (who are generally more cost-conscious about spending their own money) to encourage efficient health-care delivery and to discourage unnecessary expense.

Litigation has resulted from insurance companies seeking to place limits for certain conditions. The decision by the U.S. Court of Appeals for the Seventh Circuit in Doe and Smith v. Mutual of Omaha Insurance Co., 179 F.3d 557 (7th Cir. 1999), cert. denied, 120 S. Ct. 845 (2000), concerns AIDS caps insurance policies. At issue in the case was whether the Americans with Disabilities Act (ADA) covers the content of insurance policies. The plaintiffs, who sued under the pseudonyms john doe and Richard Smith, argued that Mutual of Omaha Company had discriminated against them by selling them insurance policies with lifetime caps on AIDS-related expenditures. John Doe's policy had a lifetime AIDS cap of $100,000, and Richard Smith's policy had a cap of $25,000. Other health insurance policies sold by the company had lifetime caps for other diseases of $1 million. The Seventh Circuit found that AIDS caps do not violate the ADA. The court found that Doe and Smith were not discriminated against, because the company did offer them an insurance policy. The ADA, the court determined, would only prohibit Mutual of Omaha from singling out disabled people and refusing to sell them insurance. The court ruled that the ADA did not prohibit the company from offering disabled parties insurance policies with different terms and conditions from other people. The court held the plaintiffs were not denied a policy because they had AIDS but rather were denied coverage for certain AIDS treatments.

In August 2000, a federal appeals court upheld the dismissal of a class-action RICO suit against Aetna-U.S. Healthcare Inc. after finding that the plaintiffs had failed to allege a valid RICO injury and that they therefore lacked standing to sue. In Maio v. Aetna Inc., 221 F.3d 472, 493 (3d Cir. 2000) the court found that the plaintiffs were unable to demonstrate that Aetna's policies gave less of a health care product than what Aetna had promised to deliver in terms of the level and quality of health care coverage under its HMO plan. The court found that without proof that systemic practices actually negatively affected the health care that Aetna provided to its HMO members through its participating providers, the case could not stand. The consumers who alleged that Aetna had lured them in with false promises of high-quality care, while secretly pressuring doctors to cut costs and to provide only minimal care, did not prevail in the suit.

further readings

Ellwood, Paul M., Jr., and George D. Lundberg. 1996. "Managed Care: A Work in Progress." Journal of the American Medical Association 276 (October 6).

Freiburg, James P. 1993. "The ABCs of MCOs: An Overview of Managed Care Organizations." Illinois Bar Journal 81 (November).

Halvorson, George C. 1993. Strong Medicine. New York: Random House.

Harris, Jeffrey R., et al. 1996. "Prevention and Managed Care: Opportunities for Managed Care Organizations, Purchasers of Health Care, and Public Health Agencies." Journal of the American Medical Association 275 (January 3).

cross-references

Health Care Law; Physicians and Surgeons.

HEALTH INSURANCE

Beginnings

Compulsory health insurance began in Germany in 1883 when Chancellor Otto Bismarck introduced it along with other social rights in lieu of granting wider political rights. It was adopted in modified form in Britain through the efforts of David Lloyd George in 1911. But a consciousness of the need for medical relief was slow to develop in the United States. Most American sickness benefits were provided by small immigrant benefit societies and local chapters of fraternal orders and unions. While American workers bought life insurance policies from commercial insurance companies, they spent their money to insure their escaping a pauper's funeral, not to buy better health. Reformers outside government rather than political leaders took the initiative in calling for health insurance measures. The first workmen's compensation law in the country was enacted in Wisconsin on 3 May 1911. By 1915 workmen's compensation laws had been passed by some twenty states. Such laws applied only to disabilities arising from employment. There was no other form of legally required health insurance.

The American Association for Labor Legislation

The American Association for Labor Legislation (AALL), founded in 1906, was at the center of the push for health insurance. The AALL's major concern was occupational disease, and its first major success came in the campaign against "phossy jaw," a bone-eroding disease of the face common among workers in match factories. In 1907 the AALL called for a broad program of social legislation that included sickness insurance, and by 1915 it announced that it was preparing a standard bill, which it intended to introduce into state legislatures in 1916. The bill called for compulsory health insurance for employed people earning $1,200 or less and for other employees who wanted to subscribe. The bill would provide hospitalization with necessary medical, surgical, and nursing care and cash payments equal to two-thirds of the employee's wages for up to twenty-six weeks of illness. Although some labor leaders endorsed the bill, it was opposed by the powerful president of the American Federation of Labor, Samuel Gompers, who criticized the belief that the government needed to supervise the nation's health when the trade unions were already raising the workers' standard of living. Official studies of health insurance were made in eight states between 1915 and 1918. Special commissions appointed in Massachusetts, California, and four other states approved the principle of health insurance, but the legislatures failed to act.

Two Objectives

The AALL pressed its campaign for health insurance while the progressive reform impulse was beginning to wane. The Progressive Party's nominee, former president Theodore Roosevelt, supported social and health insurance in the belief that no country could be strong whose people were sick and poor. But his defeat in 1912 by Woodrow Wilson meant that compulsory health insurance in the United States would not have a national political sponsor. Progressive reformers such as the AALL put forward two objectives for health insurance. First, reformers argued that poverty caused by illness would be reduced by providing support to families with ill breadwinners. Second, reformers claimed that the total costs of illness and insurance to society would be lessened by encouraging more effective medical care, creating financial incentives for disease prevention, and eliminating the wasteful expenditures on industrial insurance.

From Pro to Con

The arguments for health insurance reflected a Progressive belief in the ability of public health and medical care to prevent and cure disease. In general physicians at first supported the attempts to secure health legislation. In 1915 the American Medical Association responded positively to the AALL's push. By late 1916 social insurance bills had been introduced into state legislatures, and Congress was holding hearings on social legislation that included health insurance. In January 1917 the Journal of the American Medical Association again made favorable editorial comments about social insurance, pointing out that among the large industrial nations the United States was almost the only one that had failed to adopt compulsory health insurance laws. But there were disagreements between the reformers and the physicians, especially where the Progressive program conflicted with the physicians' defense of their income and professional autonomy. Searching for efficiency, some reformers encouraged the growth of group practices and suggested paying doctors by salary or capitation (per patient per year) instead of by the traditional fee-for-service method. This led to increasing negativity from physicians, and during 1917 the journal began to swing away from favorable comments on social insurance toward opposition.

MEDICAL HERESY-1916

The battle of fee-for-service medicine vs. salaried group practice or nationalized health insurance has been a protracted one in the United States throughout the twentieth century. The Literary Digest published examples of some of the early salvos in 1916. When Dr. Richard Cabot argued in The American Magazine that the fees of some medical men were excessive and advocated putting them on salaries, paid either by the state or by large corporations and standardizing the charges, he roused the ire of many of his medical brethren. In a countercharge, The Southern Medical Journal (Atlanta) accused him of "so overstat[ing] his case that what little truth might lie at the bottom is hidden by the murky smoke of his insinuations." Dr. Cabot's suggestion, that the practice of medicine in "groups" as seen in modern hospital service and in the common affiliation of expert practitioners should be made universal, was attacked as dis-crediting the general practitioner, who "was conscientiously putting forth his best efforts to practice scientific medicine."

Sources:

"A Medical Heresy Hunt," Literary Digest, 53 (5 August 1916): 303-304;

"No Medical Heresies," Literary Digest, 52 (3 June 1916): 1630.

The Death Knell for Social Insurance

Fearing that sick pay could encourage malingering, employers rejected the argument that health insurance would increase productive efficiency. To the great annoyance of the reformers, the American Federation of Labor opposed social insurance as an unnecessary, paternalistic reform that would create a system of state supervision of the people's health. The private insurance industry, which feared the loss of an important source of profit, also fought the concept of compulsory health insurance. But the entry of the United States into World War I in April 1917 proved to be the final undoing of the Progressives and their social insurance movement. Anti-German sentiment in the country left social insurance vulnerable to the charge that it was "a dangerous device, invented in Germany, announced by the German Emperor from the throne the same year he started plotting and preparing to conquer the world." The Red Scare immediately after the war, when the government challenged the last vestiges of radicalism, meant opponents of compulsory health insurance would associate it with Bolshevism and communism. The health insurance movement dissipated in the complacency of the 1920s and the negative stance of the American Medical Association.

THE LOST WAGES OF ILLNESS

A study of 4,474 workers in a Chicago neighbor-hood in 1919 showed that about one in four was sick for a week or longer each year; on average these workers lost $119 or 13.7 percent of their annual wages. The proportion of families that could not "make ends meet" increased to 16.6 per-cent among those with serious illness, compared to 4.7 percent among those without. Sickness was the leading immediate cause of poverty and the chief factor in a quarter to a third of the charity cases in the state of Illinois.

Source:

Paul Starr, The Social Transformation of American Medicine (New York: Basic Books, 1982), p. 245.

Sources:

James Bordley III and A. McGehee Harvey, Two Centuries of American Medicine, 1776-1976 (Philadelphia: W. B. Saunders, 1976);

Paul Starr, The Social Transformation of American Medicine (New York: Basic Books, 1982).

Medicaid Act (1965)

Sara Rosenbaum

Enacted in 1965 as a legislative "afterthought" to Medicare, the Medicaid program (P.L. 89-97) has grown into a central part of the American health care system. Medicaid finances health needs throughout the entire life cycle: In 1999 the program funded nearly one-third of all U.S. births and approximately one-half of all nursing home care. It is the largest single funder in the treatment of HIV/AIDS and for serious mental illness, and provides more than a third of the revenues used to support the health care "safety net" for low-income, uninsured, and medically underserved persons. Medicaid insures nearly 14 percent of the nonelderly population and 20 percent of all children. In fiscal year 2002, combined federal and state Medicaid expenditures totaled nearly $250 billion, virtually equaling Medicare spending levels. Total program enrollment that year stood at forty-four million persons, making Medicaid the nation's largest single public insurance program.

Medicaid's structural elasticity and its resulting ability to respond to national health priorities involving individuals and conditions considered uninsurable in the commercial market explain its importance to the health system. Legislators have amended Medicaid dozens of times since its original enactment to add numerous classes of eligible persons and covered services to address the range of priorities that have arisen over the nearly four decades since the law's original enactment. Examples include coverage for low-income pregnant women, uninsured women with breast and cervical cancer, community-based health care for children and adults with severe disabilities and at risk for institutionalization, workers with disabilities, and transitional insurance for families moving from welfare to work. Medicaid also has come to play a critical role in compensating for Medicare's limitations by offering premium and cost-sharing assistance to lower-income Medicare beneficiaries, as well as supplemental coverage for low income and medically needy beneficiaries for the many benefits and services that Medicare does not cover. This is particularly the case for prescription outpatient drugs and long-term care.

MEDICAID'S COMPLEXITY

The federal Medicaid statute is extremely complex, made so by two factors. The first is the program's historic ties to cash welfare payment principles. Originally Congress limited mandatory eligibility classifications to families with children and elderly and disabled persons receiving cash welfare. It significantly modified these rules over the years to either mandate or permit coverage for certain groups of low-income persons other than those who receive cash welfare assistance, but it never entirely replaced the original rules. The result is a complicated eligibility scheme that offers more than five dozen separate eligibility categories, some mandatory, others optional, encompassing pregnant women, children, families with children, and elderly and disabled adults. Poverty and low income (either outright or as the result of having incurred catastrophic medical expenses) are hallmarks of virtually all eligibility categories.

Ironically, no federal eligibility category exists for nondisabled, nonelderly, nonpregnant adults without children, even though these persons comprise a significant proportion of the nation's forty-two million uninsured persons. A number of states do extend coverage to such individuals by operating their Medicaid programs as "demonstrations" under the legal authority of Section 1115 of the Social Security Act. This provision of law, which dates back to 1963 (pre-Medicaid), permits the Secretary of the U.S. Department of Health and Human Services to waive otherwise applicable provisions of certain Social Security Act grant-in-aid programs in order to conduct welfare demonstrations that further federal objectives. Only a minority of states have expanded Medicaid eligibility standards in this fashion.

The second factor contributing to Medicaid's complexity is the program's special coverage structure. Several classes of benefits are federally required as a condition of state participation, and states must cover reasonable levels of benefits and services for their enrolled populations. Coverage is particularly comprehensive for children under twenty-one. The program either bars outright or severely curtails the use of patient cost-sharing and premiums. Unlike commercial health insurance or Medicare, Medicaid contains no pre-existing condition exclusion clauses or waiting periods. In addition, the statute bars discrimination in the provision of required services on the basis of a condition. For example, the types of hospital and medical care coverage limitations found in commercial plans for persons with HIV or mental illness would be impermissible in Medicaid.

Medicaid's legal structure accounts for its growth over the years. It is also this structure and its attendant costs that account for the deep controversy surrounding the program. Medicaid is a grant-in-aid program that provides federal assistance to states with approved plans to help defray the cost of extending covered benefits to eligible individuals when furnished by participating providers. The federal financial participation rate ranges from 50 to 77 percent of each dollar spent by a state on medical assistance under an approved state plan. Unlike other grant-in-aid programs, however, there is no aggregate upper limit on this federal contribution level: federal financing is open-ended and limited only by a state's own desires to contain the size and scope of their plans.

From a legal point of view, Medicaid is unique because unlike other grant-in-aid programs, it is an individually enforceable legal entitlement in the case of persons eligible for and receiving services under a state plan. Furthermore, enforceability is not simply an issue for beneficiaries. States have an enforceable right to payment, and participating health care providers that furnish covered services to eligible persons have a legally enforceable federal right to payment, although in recent years Congress has reduced provider protections by repealing key provider payment standards.

FUNDING CONTROVERSIES

Medicaid's controversy also relates to its sheer size and its legal entitlements; the law mandates continued funding increases, even as the number of persons and the cost and intensity of health care increase. State officials facing the worst financial crisis since the Great Depression have responded in 2003 with efforts to reduce Medicaid spending through reductions in "optional" eligibility, benefits, and provider payments. Although two-thirds of all Medicaid expenditures are attributable to "optional" benefits and services, the reality is such that these "options" are politically sensitive. For example, most nursing home expenditures are optional, as is coverage of women with breast cancer, prescription drug coverage, and residential facilities for persons with mental retardation.

Repeated calls for program reforms range from expanding existing eligibility and benefit rules in order to reduce the number of uninsured Americans or to respond to specific health problems (such as breast and cervical cancer) to eliminating much of the program and replacing it with aggregate block grants to states, as called for by the Bush administration in 2003. Most reform efforts are viewed as so politically and economically difficult that in many respects, Medicaid has remained essentially untouched since its original enactment, merely expanding in both scope and complexity over the years as needs arose. Whether this cycle of public outcry over program costs produces different results remains to be seen.

See also: Medicare Act; Social Security Act of 1935.

BIBLIOGRAPHY

Schneider, Andy, et al. The Medicaid Resource Book. Washington, DC: Kaiser Family Foundation, 2003.

INTERNET RESOURCES

National Health Law Program. <http://www.healthlaw.org>.

Center for Medicare and Medicaid Services. <http://www.cms.gov>.

health insurance prepayment plan providing services or cash indemnities for medical care needed in times of illness or disability. It is effected by voluntary plans, either commercial or nonprofit, or by compulsory national insurance plans, usually connected with a social security program.

Health Insurance Worldwide

Compulsory accident and sickness insurance was initiated (1883-84) in Germany by Otto von Bismarck; it was adopted by Great Britain, France, Chile, the Soviet Union, and other nations after World War I. In Britain the National Health Insurance Act of 1946, which went into effect in 1948, provided the most comprehensive compulsory medical care plan introduced anywhere up to that time. Under the plan the individual obtained free medical attention from any doctor participating in the national health service. The cost was met by the national government and local taxation; a small charge for some services has been instituted since then. In 1958 the Canadian Hospital and Diagnoses Act provided full hospital service almost free of charge in public wards; more comprehensive coverage was added in 1967. The program is financed by the federal government but administered by the provinces. National health insurance has been widely adopted in Europe and parts of Asia. The United States is the only Western industrial nation without some form of comprehensive national health insurance.

Health Insurance in the United States

In the past, health insurance in the United States took the form of voluntary programs. Such programs date from about 1850, when health insurance was provided chiefly by cooperative mutual benefit and fraternal beneficiary associations. Limited coverage by commercial companies was also introduced during that period, and subsequently many plans were established by industries and labor unions.

Advocacy of government health insurance in the United States began in the early 1900s. Theodore Roosevelt made national health insurance one of the major planks of the Progressive party during the 1912 presidential campaign, and in 1915 a model bill for health insurance was presented, but defeated, in numerous state legislatures. After 1920 opposition to government-sponsored plans was led by the American Medical Association and was said to be motivated by the fear that government participation in medical care might lead to socialized medicine .

Over the years in the United States, many plans have been set up by societies of practicing physicians, but the largest enrollment has been in Blue Cross and Blue Shield plans. These were set up as community-sponsored, nonprofit service plans based on contracts with hospitals and with subscribers. Most general voluntary plans accept subscribers, in groups or as individuals. These plans extend coverage to dependents and exclude accidents and diseases covered by workers' compensation laws. Although valuable in cushioning the financial distress caused by illness or injury, voluntary health insurance not only limits benefits in order to avoid prohibitive rates but excludes many people, particularly the poor, who cannot afford it, and senior citizens, for whom the cost is often prohibitive. By the mid-1990s many of the Blue Cross companies, which had been suffering financially, were reorganizing, and by 2002 more than 20% of Blue Cross members were covered by plans that had converted to for-profit status.

During the middle of the 20th cent. it became apparent that legislation was necessary to provide medical care for the elderly. A voluntary federal-state grant-in-aid program providing medical care to the elderly was first implemented in 1961. Legislation proposed by President Kennedy to provide medical care for the aged through the social security mechanism was defeated in 1961, but in 1965, during President Lyndon B. Johnson's administration, Federal legislation in the form of Medicare for the aged and Medicaid for the indigent was enacted. Since 1966, both public and private health insurance has played a key role in financing health-care costs in the United States.

Over 70% of all medical bills are now covered by government programs and insurance, and the number of people covered by some form of health insurance increased from about 12 million in 1940 to over 225 million in 1996. About 38 million Americans were enrolled in Medicare, and there were more than 36 million Medicaid recipients. In that same year, about 187 million people were covered by private health insurance. However, more than 44 million Americans are not covered by any health insurance, and those who are have seen significant cost increases. As premiums increased from $16.8 billion in 1970 to $310 billion in 1995, and national health-care costs rose from $75 billion in 1970 to just over $1 trillion in 1996, many businesses increased the amount of money employees contribute toward their health insurance. This situation has led to continuing political pressure for restructuring of the national health-care insurance system.

Congress debated many bills for a national health insurance plan in the 1960s and 70s, and in 1973 it passed the Health Maintenance Organization (HMO) Act, which provided grants to employers who set up HMOs (see health maintenance organization ). Unlike insurers, HMOs provide care directly to patients; HMOs were viewed as low-cost alternatives to hospitals and private doctors. In 1997 approximately 651 HMOs provided care to 66.8 million people.

In the 1980s and 90s political leaders again advanced a variety of national health insurance proposals. One plan backed by leading Democrats was known as "pay or play" because it would have forced employers to provide health insurance or pay into a national fund that would cover uninsured workers. A second, advanced by President G. H. W. Bush in 1992, would have provided tax breaks, vouchers, and other incentives to employers to extend health insurance benefits. A third proposal, based on the Canadian model and nationalized health care, was opposed by most doctors and the insurance industry.

In 1993, President Clinton , who had been elected on a promise of health-care reform, proposed a national health insurance program that would have ultimately provided coverage for most citizens, but opposition by insurance, medical, small-business, and other groups killed it. In 1999, Clinton and Congress battled over developing a "patient's bill of rights," to protect people from denial of service and other HMO limitations. Many individual states have developed their own health insurance alternatives by using managed-health-care systems that monitor the type of services offered and have set fees for each service, by expanding Medicaid to help serve formerly ineligible patients, and by establishing statewide or small-business health insurance alliances that pool people into a large group that has more buying power.

Bibliography

See H. Eckstein, The English Health Service (1958); D. S. Hirshfield, The Lost Reform (1970); M. V. Pauly, Medical Care at Public Expense (1971); J. Blanpain, National Health Insurance (1978); O. Anderson, Health Services in the United States (1985); F. T. O'Grady, Individual Health Insurance (1988); D. Long, Principles of Life and Health Insurance (1988).

Health Insurance. The history of health insurance in America is largely a twentieth‐century story. Well beyond 1900, paying for medical care, with few exceptions, remained a private activity between patients and their physicians and hospitals. Widespread interest in sickness insurance—as it was originally called—did not develop in the United States until the 1910s, and then attention focused on compulsory, not voluntary, insurance. Inspired by the rapid spread of government‐sponsored sickness‐insurance plans in Europe, the progressive American Association for Labor Legislation in 1912 set up a committee to prepare a model bill for introduction in state legislatures (on the assumption that the U.S. Constitution prohibited a federal plan). The model bill required the enrollment of most manual laborers earning a hundred dollars a month or less and provided for both income protection and medical care. Although many physicians greeted this plan enthusiastically, sentiment turned against the measure during World War I, and by 1920, when the American Medical Association (AMA) formally declared its opposition, the campaign for compulsory health insurance—or socialized medicine, as it was sometimes called—was dead.

The Great Depression, beginning in 1929, again brought health insurance to the fore. As hospital receipts and physician income plummeted, interest in voluntary health insurance grew. In December 1929, the Baylor University Hospital in Dallas, Texas, announced a plan to sell hospitalization policies to the city's school teachers for fifty cents a month. Other hospitals around the country adopted similar plans, and within a few years groups of hospitals were banding together to offer what came to be called Blue Cross insurance. The AMA, which urged Americans “to save for sickness” rather than purchase insurance, initially opposed this development “as being economically unsound, unethical and inimical to the public interests.” In 1937, however, in the face of a renewed push for compulsory health insurance, the AMA finally approved group hospitalization plans—as long as they left the payment of physicians out of the scheme. By this time the AMA was working on a physician‐controlled plan to provide medical (as opposed to hospital) insurance. The resulting medical‐society plans, which started in the Pacific Northwest, took the name Blue Shield. By 1952 over half of all Americans owned some health insurance, and although insurance benefits paid only 15 percent of private expenditures for health care, prepayment plans were being hailed by a presidential commission as “the medical success story of the past fifteen years.”

With voluntary plans failing to protect so many Americans, the perennial debate over compulsory health insurance flared again. Pro‐insurance reformers had been bitterly disappointed when President Franklin Delano Roosevelt failed to include health insurance in the 1935 Social Security Act. To remedy this omission, the Social Security Board in 1943 drafted a bill to provide health insurance to all persons paying Social Security taxes, as well as to their families. Despite the strong backing of President Harry S. Truman, neither this nor subsequent versions were enacted by Congress. The election of a Republican administration in 1952 temporarily ended the debate over compulsory health insurance.

The 1960 election of John F. Kennedy, a Democrat, revived discussion of the government's responsibility to provide adequate health care for its citizens. Despite strong opposition from organized medicine, Kennedy's successor, Lyndon B. Johnson, persuaded Congress in 1965 to include health insurance as a Social Security benefit (Medicare) and to provide for the indigent through grants to the states (Medicaid). Ironically, after years of warning that government health insurance would ruin the medical profession financially, physicians found that Medicare and Medicaid—by bringing in more patients, raising fees, and facilitating bill collecting—greatly increased their income.

The last third of the twentieth century witnessed numerous attempts to solve the twin problems of access to health care and its ever increasing cost. In the private sector the most notable development was the rapid growth of health maintenance organizations (HMOs) after 1973, when Congress passed the bipartisan HMO Act. By 1990, the California‐based Kaiser Permanente, which had pioneered in developing prepaid group‐practice arrangements, had enrolled more than 6.5 million members. Proposals offered by different advocacy groups ranged from a national health service, on the left, in which medical workers would become salaried employees, to income‐tax credits for the purchase of commercial health insurance, on the right. None of these efforts succeeded, including President Bill Clinton's ill‐fated health security plan in 1993–1994, which would have covered all Americans through large health‐insurance purchasing cooperatives. Instead, the United States continued its piecemeal response to health‐care coverage, with considerable experimentation occurring at the state level. By the end of the century, nearly 84 percent of Americans enjoyed health‐insurance coverage, but an estimated 44 million remained uninsured, some by choice (over 8 percent of the uninsured earned more than $75,000 annually), most by necessity.
See also Great Society; Insurance; Medicine: From the 1870s to 1945; Medicine: Since 1945; New Deal Era, The; Progressive Era.

Bibliography

Daniel S. Hirshfield , The Lost Reform: The Campaign for Compulsory Health Insurance in the United States from 1932 to 1943, 1970.
Ronald L. Numbers , Almost Persuaded: American Physicians and Compulsory Health Insurance, 1912–1920, 1978.
Monte M. Poen , Harry S. Truman versus the Medical Lobby: The Genesis of Medicare, 1979.
Ronald L. Numbers, ed., Compulsory Health Insurance: The Continuing American Debate, 1982.
Paul Starr , The Social Transformation of American Medicine, 1982.
Robert Cunningham III and and Robert M. Cunningham Jr. , The Blues: A History of the Blue Cross and Blue Shield System, 1997.

Ronald L. Numbers

HEALTH INSURANCE

HEALTH INSURANCE. Most Americans believe medical care should be available to every citizen. Yet the United States is the only wealthy democracy that does not insure millions of its citizens, and Americans pay higher health care costs than patients in any other country. From 1970 to 1996 the percentage of Americans without medical insurance climbed from 10.9 to 15.6. At the turn of the twenty-first century over 40 million Americans lacked any type of coverage and roughly the same number were underinsured against serious illnesses.

A poorly designed health care system explains why so many either lack coverage or must worry about losing insurance if they lose or change jobs. In the United States, health insurance is closely linked to employment. Government-sponsored programs cover only certain groups—veterans and military servicemembers, the elderly and the poor, and Native Americans. Most Americans enroll in a plan offered by their employer. Coverage therefore depends on both government policies and the ability of private employers to offer job-related benefits.

In the early twentieth century, most Americans lacked health insurance. In 1915, the American Association for Labor Legislation (AALL) urged state lawmakers to provide coverage for low-income families. Fifteen states were considering legislation before opponents of government-sponsored insurance attacked the proposals as "un-American" forms of "socialism." Although critics defeated the AALL legislation, Congress established a national hospital system for veterans in 1921.

In the 1930s the depression put medical care beyond the reach of many middle-class Americans. The influential American Medical Association (AMA) nevertheless opposed both private and public insurance plans, and AMA opposition forced President Roosevelt to exclude health care provisions from his Social Security Act. Over AMA objections, cash-strapped hospitals nevertheless began implementing new prepayment schemes. At Baylor University, a plan devised by Dr. Justin Ford Kimball offered hospitalization benefits in exchange for monthly prepayments. By 1940, fifty-six "Blue Cross" programs were offering hospital benefits to 6 million subscribers. In 1943 the AMA itself established Associated Medical Care Plans, the model for "Blue Shield," to maintain some control over the reimbursements paid to doctors.

After World War II, President Truman called on a Republican-controlled Congress to enact universal health coverage. When Congress did not act, Truman won the 1948 election, and the Democrats won back Congress. Truman renewed his campaign for universal coverage, but the AMA spent millions to thwart him. Weak support among voters and political divisions among Democrats contributed to the plan's defeat. So, too, did the relative availability of private insurance after the war. Many employers now offered benefits to attract scarce workers, and tax policies encouraged them by exempting revenues used to pay employee premiums. Moreover, after labor unions won the right to bargain for health insurance, many union members gained employer-financed coverage.

In the 1950s many elderly, unemployed, and chronically ill Americans remained uninsured. When Democrats swept Congress and the presidency in 1964, Lyndon Johnson made government-sponsored health insurance for the elderly a top priority. In 1965 Congress amended the Social Security Act to create Medicare and Medicaid, providing health coverage for the elderly and the poor. Under Medicare, age and social security status determined eligibility; under Medicaid, income determined eligibility, and benefits varied by state.

Since the 1960s, health care costs have consumed an ever larger percentage of the gross national product, and the problem of cost containment has dominated health care discourse. President Nixon elevated health maintenance organizations, or HMOs, to the top of his health care agenda. In 1973 Congress passed the Health Maintenance Organization Act, which financed the creation of HMOs (prepaid group practices that integrate financing and delivery of services) and required employers to offer HMO plans. Since then, the number of Americans insured by HMOs has skyrocketed.

In 1960 fewer than 50 percent of Americans had health insurance; at the beginning of the twenty-first century roughly 85 percent were covered by private insurance, Medicare, or Medicaid. In 1992, 38.9 million Americans still lacked health insurance. Upon his election, President Clinton kept a campaign promise by introducing a plan to reform health care financing, control costs, and extend coverage to the uninsured. Clinton's "Health Security" plan featured universal coverage, employer mandates, and complex regulatory mechanisms.

Health insurance companies and other interest groups spent millions of dollars to defeat the Clinton initiative. Republican Party strategists feared that Democrats would earn the confidence of middle-class voters if Health Security became law. Antigovernment conservatives used moral suasion and grassroots mobilization to undermine the Clinton plan. Opponents successfully portrayed Health Security as a choice-limiting takeover of the health care system by liberals and bureaucrats. The Clinton plan would have guaranteed every American a choice, however, of at least three different plans, including a fee-for-service option. From 1992 to 1997 enrollment in HMOs and other health plans that limit one's choice of doctors soared by 60 percent. By the beginning of the twenty-first century, over half of all insured American workers were enrolled in employer-sponsored HMOs.

BIBLIOGRAPHY

Bok, Derek. The Trouble with Government. Cambridge, Mass.: Harvard University Press, 2001.

Gamble, Vanessa Northington. "Health Care Delivery." In Encyclopedia of the United States in the Twentieth Century. Edited by Stanley I. Kutler et al. Vol. 2. New York: Scribners, 1996.

Skocpol, Theda. Boomerang: Health Care Reform and the Turn Against Government. New York: Norton, 1997.

JustinSuran

See alsoHealth Care ; Health Maintenance Organizations ; Insurance ; Medicare and Medicaid .

Penn Central Company former U.S. transportation company, formed in 1968 by the merger of the New York Central RR and the Pennsylvania RR . By the early 1970s the railroad was bankrupt; in 1976 the U.S. government created Conrail from the Penn Central and five other failed eastern railroads. In 1994 the company became an insurance firm, American Premier Underwriters. Conrail itself was taken over in 1999 by the CSX and Norfolk Southern railroads.

Bibliography: See J. R. Daughen and P. Binzen, The Wreck of the Penn Central (1971, repr. 1999).