Alabama Healthcare Market: Structure, HMOs, and Capitation

Overview of Alabama's Healthcare Delivery Structure

The health sector is an important part of the country's economy. It is estimated that health spending accounts for about 16 percent of the country's GDP (Gross Domestic Product). It is also estimated that health expenditures account for between 25 and 33 percent of some state budgets across the country. Multiple policies and regulations guide the many subsectors within the healthcare sector, and several regulatory authorities oversee various aspects of healthcare delivery. Local, state, and federal governments, as well as private professional associations, all play a role in regulating healthcare delivery.

Alabama's healthcare delivery structure entails the drafting, passing, and implementing of regulations, policies, rules, and laws to manage the state's healthcare system. The system includes services delivered by healthcare workers who prevent illnesses, diagnose and treat conditions, provide mental healthcare, and treat injuries. It also encompasses multiple diverse but related sectors, including health information technology, pharmaceuticals, and insurance. In Alabama, as in many other states, employers have almost always been the largest source of health insurance for individuals. This is partly because employers are granted an income tax exemption when they make payments for their employees' health insurance. Federal and state governments are also a significant source of health insurance, as they jointly provide coverage through Medicaid for individuals with low income. Additionally, the federal government provides health insurance for the disabled and the elderly (Ballotpedia, 2016).

Alabama self-funds all its health plan offerings. This means that instead of purchasing insurance, Alabama pays insurance claims using employee out-of-pocket contributions and state contributions, while an insurer administers the benefits. In 2013, 24 states across the US had health plans with no deductible; Alabama was not among them. With respect to private insurance, individuals obtain coverage either through the individual market — by purchasing their own insurance — or through their employer. Because health costs have risen over the last decade or more, insurance premiums have also increased. Between 2000 and 2014, insurance premiums for plans sponsored by employers — including those sponsored by local and state governments — increased by 144% for individuals and by 161% for families. However, the rate of premium increases has slowed over the last few years (Ballotpedia, 2016).

References

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Alabama Public Health. (2018). Access to care. Retrieved from https://www.alabamapublichealth.gov/healthrankings/access-to-care.html

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Ballotpedia. (2016). Healthcare policy in Alabama. Retrieved from https://ballotpedia.org/Healthcare_policy_in_Alabama

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