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Most Americans have some form of health insurance - all Americans pay into the system but not all benefit

For the majority of people living in the US – approximately 249 million Americans or 84 percent of the total US population[2] – the current system provides some form of health coverage and access to health care. Of those under age 65 (commonly referred to in census and survey data as the “non-elderly population”), 82 percent have health insurance (see Figure 1).[3] Almost all Americans age 65 and over have health insurance due to the Medicare program, a federal entitlement program that primarily covers individuals age 65 and over regardless of income or health status and individuals under age 65 with permanent disabilities.[4] While the majority of Americans are insured, all tax-paying Americans pay into the current health care and health insurance system but not everyone benefits from it. Eighteen percent of the non-elderly population and 16 percent of the total US population is uninsured[5]; furthermore, of those who are insured, the vast majority are paying for both their own health insurance and a number of other programs that provide health coverage for various segments of the population. The inefficiencies and inequalities in the current health insurance structure are the subject of this next set of fact sheets that examine how people get health insurance - who pays and how much, and who plays and at what cost.

Figure 1. Health Insurance, Health Coverage, and Access to Health Care

The terms health insurance, health coverage, and health care are ubiquitous in discussions on health care reform. These terms, however, may become confusing if not clarified.

Health coverage refers to any plan or policy that charges an incremental payment (or wage loss) to ensure access to health care services for both present and future health needs. This can include traditional insurance plans and policies, modeled after the first Blue Cross Blue Shield plans, as well as more contemporary forms of health coverage including indemnity plans, HMOs, pre-paid plans, and employee health benefit plans. Regardless of which approach is employed, individuals buy into these plans and policies for more or less the same reasons: “1.) to protect themselves from the potentially extreme financial costs of medical care if they become severely ill, and 2.) to ensure that they have access to health care when they need it.”¹

Health insurance is a form of health coverage which involves the transfer of health risk from an individual to the insurer. Health insurance and health coverage are often used interchangeably to refer to plans that provide access to health care. However, a distinction is made when discussing the difference between traditional health insurance plans and employee welfare benefits plans that provide health and medical coverage (in the latter, companies assume their own health risks whereas in the former, companies and individuals transfer their risk to a private insuring entity). State and federal regulations governing these two forms of health coverage are also different, and these distinctions are discussed in the section on employer sponsored health coverage.

Health care, then, refers to the actual health services – the hard and soft technologies related to health – that are provided to individuals who either have health coverage or who are in a state of emergency (as per the Emergency Medical Treatment and Active Labor Act (EMTALA), health care providers must serve individuals in emergency need regardless of ability to pay, citizenship status, or legal status). Health care providers is also a general term that can refer to health professionals such as doctors, nurses, dentists, psychologists, etc; health facilities such as hospitals nursing homes, community health centers, and institutional care facilities; and other key service providers including pharmaceutical or drug companies, medical equipment suppliers, etc.²

1 “How Private Health Insurance Works: a Primer,” Kaiser Family Foundation (April 2002): p. 1,

http://www.kff.org/insurance/2255-index.cfm (accessed Dec. 12, 2007).

2 “Medicaid History & Organization (Chapter 3),” Texas Medicaid in Perspective (Texas Health and Human Services Commission, January 2007): p. 5, http://www.hhsc.state.tx.us/medicaid/reports/PB6/PDF/Chapter03.pdf (accessed Dec. 12, 2007).