CHAPTER 1

History of U.S Health Care Reform

Prior to the 1960s, seniors and the disabled did not receive healthcare to treat their health conditions because insurance plans wereexpensive and unaffordable to most. To fill the major void in thehealth care system, John F. Kennedy publicly discussed the conceptof Medicare and Medicaid programs in 1962. With public support,Lyndon B. Johnson signed the amendment to the social securityact, TITLE XVIII—Health Insurance For The Aged And Disabled, tothe Social Security Act to add Medicare into our national healthcare system in 1965.

What is the difference between the Medicare and Medicaid?Medicare is our public health program that insures senior citizensand disabled people. Medicaid is our public health program thatinsures lower income individuals and their dependents as well aspeople with certain disabilities.

Health Maintenance Organization(HMO) Act of 1973

In 1973, President Richard Nixon signed the Health MaintenanceOrganization (HMO) Act of 1973. President Nixon helped fund thegrowth of the HMO system in the U.S. because he wanted to giveAmericans health insurance plan options. In President Nixon'sstatement on signing the HMO Act of 1973, he stated, "Healthmaintenance organizations provide health care to their members ona prepaid basis with emphasis on essential preventive services. Theestablishment of HMO's will allow people to select for themselveseither a prepaid system for obtaining health services or the moretraditional approach which has served the American people sowell over the years." In the 1980s, HMOs plan options were a verypopular plan design with employers. Today, the employer andindividual plan market prefers PPO health insurance over HMO.

Consolidated Omnibus BudgetReconciliation Act (COBRA)

Prior to the 1990s, employees who decided to leave their employerwere not able to take their health insurance plans with them. Forthose individuals who had an illness or had dependents who were illon the insurance plans, getting health insurance coverage elsewherewas not an option. In the individual and family health insurancemarket, if someone had an illness and did not have insurance tocover expenses, insurance carriers declined to offer them coverage.In other words, the healthy could get health insurance coverageafter they were removed from their employer plan, and the ill wereleft in the cold. Because of this loophole in the health care system,the Consolidated Omnibus Budget Reconciliation Act (COBRA)was signed into law in 1996. COBRA requires employers to extendgroup health benefits to employees who may no longer workfor the company but who still want to maintain and pay for theirhealth insurance plans. I cannot imagine a world without COBRAand wonder how the ill workforce survived when their group plancoverage ended.

Children's Health InsuranceProgram (CHIP)

In 1997, voters approved the Children's Health Insurance Program(CHIP). This program helps cover children who lack privateinsurance. CHIP allows low- to moderate-income families the abilityto provide health insurance to their children through this publicprogram. The program was created because families were livinguninsured, especially if they could not get their children insurance.The program allowed children to be covered free or at a low ratebecause the federal government subsidizes the cost to make itaffordable. Today, The Children's Health Insurance Program (CHIP)provides health coverage to nearly 8 million children in familieswith incomes too high to qualify for Medicaid but...