Coronavirus Pandemic in the U.S. indicates a Need of a Completely New Model of Health Insurance

The debate about health care reform in the U.S. since long has been centered around two topics, first how to expand health insurance coverage access, and second how healthcare providers should be paid for their work. The first issue led to Medicare for All debate and the inception of a public option to compete with private insurance carriers. The second issue led to the discussion that whether the flawed fee-for-service reimbursement system should be replaced, and healthcare providers should be paid based on their performance in catering to the overall health needs of the patients they serve. However, even after ten years of the ACA, the healthcare system of the U.S. has made only slight progress on these fundamental issues.

The inadequacy of the current health insurance system of the U.S. has been exposed, due to the current crisis. The health insurance system was developed, thinking that only a limited and predictable section of the population will need health care services at a given time. The health insurance model was not built for healthcare spending coverage at a time of a novel, mass pandemic when patients with critical need reach out to healthcare providers at unprecedented rates. There are several billing codes in the U.S. healthcare system, though, there are no specific billing codes for time spent on activities like obtaining scarce personal protective equipment or ventilators, converting lobbies into hospital wards, comforting patients at their final breath, providing emotional support to colleagues who are experiencing patient despair. These activities are collectively parts of the unfunded mandate of the health care system.

Though insurance companies are collecting premiums from covered enrollees still, there are great reductions in optional procedures and office visits that have resulted in the loss of cash outflows for them. A majority of the health insurance companies have adopted models to provide temporary relief to patients, giving them relief from the payments of copayments and deductibles, besides assuring them coverage for COVID-19 related costs. The real problem is the hospital cost that cannot be credited to any single patient. However, a recent proposal has suggested a very sensible approach, where insurance companies are suggested to provide hospitals with global payments that approximately indicate the monthly amounts they have paid to those hospitals in recent years. Due to this, the hospitals will have cash in their hands, as their regular revenue sources have reduced at a time when they have to operate well beyond their ability.

While such measures may help hospitals in offsetting their financial pain at the time of the current crisis, these measures are quite small to rectify a health insurance model in which the patients are not insured when their health risks are at a peak. It does not necessarily require to shift to universal coverage like Medicare for all to address this issue. Instead, private insurance companies should provide coverage during the normal period, and they should also contribute funds to support pandemic or emergency response in the healthcare market. Insurance companies should be assessed a tax to fund the emergency response.

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