Vanderbilt Law Review

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Steve Tilghman of Birmingham, Alabama knows first-hand the health insurance problems American families face.' Steve's family had adequate health insurance until Steve decided to change careers. After expiration of the eighteen-month extension period COBRA provides, Steve's family could not afford the one thousand dollar monthly premiums necessary to maintain their policy. Steve's epileptic son further complicated his ability to find adequate health insurance. After having no insurance for two months, Steve ultimately was able to find health insurance for only part of his family. Steve had to acquire a separate, unrated policy for his epileptic son. Steve is uncertain about the value of this policy, fearing that under this plan the insurer will consider the epilepsy to cause any injury to his son, in which case the plan does not cover him. In short, Steve's family is self-insured. Steve faces tension between protecting his family's financial resources and not compromising his child's health.

The problems Steve's family faced in acquiring health insurance largely are due to the fragmented health care financing system in the United States. The American health care financing system is a hodgepodge of private sources supplemented with public sector coverage. Theoretically, third-party health insurance is available to all American families: (1) Medicare for the aged and disabled; (2) Medicaid for the qualified poor or for specified disabilities;' (3) employment- subsidized insurance for workers and their dependents; and (4) privately purchased insurance if ineligible under the previous three categories. Health care providers, individual patients, and philanthropic groups provide the remainder of health care financing. This fragmented financing system creates inequitable and inefficient results according to the insured's financial status.