Background: With the outbreak of World War II, the federal government imposed wage and price controls on employers to prevent them from raising wages to attract a shrinking available workforce. To address this compensation problem, the Internal Revenue Service (IRS) issued a major rule that health benefits would be treated as compensation just like wages, but with a crucial stipulation: This form of employee compensation, unlike wages, would be tax free for both employers and employees.
Background: Enacted in 1965, Medicare is a government program that provides health insurance coverage for 57 million persons: almost all retired Americans aged 65 and older, as well as some disabled populations. Largely because of lower than expected revenues resulting from a sluggish wage growth, the Medicare Hospital Insurance (HI) program will become insolvent by 2028. The declining status of the HI trust is, of course, only one marker of Medicare’s growing financial problems.
Background: Established in 1965 along with Medicare, Medicaid is a joint federal and state government run program that provides health care services to low-income Americans. Today, almost 73 million Americans are covered by Medicaid. It is the nation’s largest single health coverage program in the nation. For Fiscal Year 2015, combined federal and state Medicaid spending surpassed $500 billion, with the federal government contributing almost 62 percent of the spending and the states contributing about 38 percent.
Background: In an effort to win the support of health insurance companies during the debate over Obamacare in 2009, three health insurer bailout provisions were written into the bill to compensate health insurance companies for insuring high-cost consumers in the Obamacare exchanges. These three bailout provisions include risk corridors, reinsurance, and cost-sharing subsidies, that combined, could cost taxpayers $170 billion over the next decade. The risk corridor and reinsurance provisions expire in 2016.
Background: Market consolidation in the American health care system has occurred over the last couple of decades. From 1998 to 2012, there were a total of 1,113 hospital mergers and 2,777 acquisitions. Using the influence of the Medicare program, the federal government has favored incumbent general hospitals over their smaller competitors. At the state level, anti-competitive policy including certificate-of-need (CON) laws prevent the construction or expansion of new local hospitals. Passed in 2010,