Health Insurance Reforms in America: An Ethical Principles Perspective


Health care is one of the key concerns for the United States government. The current health care system is perceived to be faulty and in need of reconstruction. The health insurance schemes currently in place have made the United States the country with the most expensive health care system anywhere in the world. Due to this high cost of health care, an increasing proportion of the population is unable to access medical care due to a lack of comprehensive insurance cover. A report by the California Nurses Association (2010) documents that according to a census survey carried out in the year 2006 an estimated 46.8 million people in the USA were uninsured. Given the recent credit crunch which has further led to financial crises in most industries, it can reasonably be argued that the figure of the uninsured in American has significantly risen

The majority of the population is greatly dissatisfied with the current health care system provided and the insurance schemes in particular. While an effective system can be deemed to be one which is efficient, acceptable, and at the same time equitable, the current system has been observed to be lacking in these attributes. This paper argues that there is indeed a need for reforms in the health insurance sector particularly from an ethical principles point of view. The paper will review the current practices and contrast them with the ideal ethical practices that should be implemented in the reforms.

Brief History of American Health insurance

A precursor to future health care insurance schemes in Amerthe ica was Blue Cross which was the first innovation that changed the shape of the health care system in America. This plan developed in 1930 advocated the payment of small premiums that would be cover the medical costs should one be hospitalized. The rationale behind this scheme was that while huge medical bills were unaffordable to most people, little deductions over a long period of time were affordable to the majority of the population (Kooijman, 1999). This form of prepaid service was beneficial to both the hospital and the consumer especially in times of economic difficulties since neither party had to worry about the hospital bill being cleared.

During the Second World War, employers started offering insurance cover to their employees mostly as a way of attracting and retaining employees. However, this created a trend and became almost mandatory as trade unions started to negotiate for insurance packages for their employees. Boychuk (2008) notes that as of 1960, private health insurance was deeply entrenched into the American health care system and over 70% of the citizens had some form of cover. However, the insurance schemes in place have been deemed to be inefficient, and calls for reform have been made through the decades. These calls have gone unheeded but with the election of President Obama in 2008, health care reform pleas received a new lease of life. The Obama-led reforms emphasize the affordability of health care for all American citizens through the adoption of a public option that would offer competitive prices to the people and therefore greatly regulate the health insurance market.

Ethical Principle Reforms in Health Insurance

Ethics can loosely be defined as a system of moral principles by which social conduct is judged as either “right” or “wrong”. As relates to a business entity, ethics are moral principles which prescribe what is acceptable behavior when dealing with clients. In our current health care system, there are numerous practices which are a direct consequence of the faulty insurance system that are visibly unethical in that they are not in the best interest of the vast majority and can therefore be judged as wrong and malevolent.

Research shows that approximately 18,000 adults die annually due to lack of timely medical intervention (California Nurses Association, 2009). This clearly demonstrates that the current insurance schemes fail to protect access to health care by all Americans. As it currently stands, the health care system does not effectively cover those who lack comprehensive insurance. While advocates of the current system insist that the health care system is just and attends to everyone who is in dire need of attention with or without insurance, in most cases the care is provided to people who lack comprehensive cover only when the disease has progressed into advanced stages. This goes against the principle of justice which dictates that all individuals must be treated equally. Reforms should be made to make the system just by making it insurance cover affordable for all and therefore avoiding these tragic occurrences.

The American Health insurance system is marred by lengthy processes and many overheads which lead to the increase in the cost of premiums for the customers. This is because the driving force of private firms is profit and therefore all means are undertaken to achieve this end even at the expense of the patient. The California Nurses Association (2010) reports that over 30% of healthcare costs go to cover administrative overheads by the insurance companies. This inflated administrative cost is unethical considering that it is responsible for raising the cost of insurance to levels that are unaffordable to many Americans. A public option insurance option would introduce a single payer system which would do away with the wasteful practices currently in play. Singer (2009) projects that up to $286 billion in saved costs could be gained in the form of writtenoff overheads, paperwork, and administrative costs. This would lead to a system that is beneficial to the average American.

Autonomy can be defined as the freedom by the patient to make decisions on issues concerning their health (Kelly, 2009). This implies that the patient has a right to make choices about their health care. The current system obliges the patient to stick to one medical institute. This creates a state whereby the autonomy of a patient is compromised as they are obligated to seek the medical assistance of only a medical institute designated by the insurance company. Proposed reforms in the insurance schemes would lead to a system that would grant patients independence by giving them a chance to select their own health care service provider and therefore leading to improved service since the patient gets to choose the doctor they prefer and can therefore establish a working relationship. This is as opposed to the current system which empowers the insurance firms to dictate upon the patient the care providers and hospitals from which they can gain their medical services.

Due to the lack of insurance covered by majority of the population, people have to make do with curative care since they cannot afford to visit medical facilities for checkups or any other form of preventive medical care. Sebelius (2009) highlights the fact that 85% of medical costs incurred in the country arise from people ailing from chronic conditions. She further notes that if diagnosed early, these diseases such as diabetes and obesity can be prevented thus saving the medical cost to be incurred in their treatment. However, the current insurance system leads to a situation whereby the practitioner cannot exercise the principle of Nonmaleficence which calls on medical practitioners to protect individuals who are unable to protect themselves. As such, a nurse can see a patient who is in need of some form of preventive care but due to the limitations imposed by insurance, he/she cannot do anything to help the patient. Reforms should be made to overcome this kind of system.

Veracity, which implies truthfulness, is one of the core principles by which medical personnel operates. As such, patients are kept in the know of what is happening and they are given truthful details as to the procedures they undergo. However, the American Nurses Association (2009) reports that about 1/3 of medical expenditure goes to cover services that do not improve the health of the patient. This suggests that the medical practitioners are not truthful to the patients since patients would not consent to services that add no value to the quality of their lives. This is a direct result of the faulty Insurance system. Reforms would lead to doctors being truthful and acting only in the best interests of their patients.

In its present form, the American health insurance system is by large run by private companies which are mostly self-regulating. These companies are commercial in nature and therefore profitability is one of their core driving forces. There is little accountability by the companies to the public as the chief obligation of the insurance companies is to their shareholders. The implementation of health care reforms would lead to the government being in a position to regulate the price that the consumer pays through the market competitive forces. This would create a scenario similar to the highly effective healthcare plan in Switzerland where the insurance companies and medical providers in Switzerland are obliged to negotiate health care prices each year. Due to this government-enforced price control, the medical costs for the average American citizen can be projected to fall by over a third thus making the system more cost effective (Boychuk, 2008). This would ensure that insurance firms do not exploit the citizens as they would be accountable to the government. The insurance system would therefore be faithful and honor its commitments to the public.

Confidentiality has always been a core issue in the medical profession. This is because people do not want their medical details to be flaunted around. Health insurance requires that numerous documents be filled out detailing one’s medical history. When a person is sick, the documents are run through many offices thus visible to a number of people. This not only increases the overhead cost of the process but also leads to a lack of privacy thus violating the client’s right to confidentiality (Sebelius, 2009). Proposed health reforms would bring about a single payer system that would significantly reduce the number of people who would access the client’s medical information.


The American Health Care System has long been observed to be faulty and from the above discussions, it is clear that the system needs radical changes. This paper set out to show that there is a need to reform the health insurance system in our country so as to deal with the ethical issues that are posed by the current system. From the arguments presented in this paper, it can irrefutably be stated that better and ethically sound health care in America can only be achieved by means of reforms. While most of these proposed reforms are radical and would require billions of dollars to implement, they are necessary for our nation’s health care system to become efficient and affordable for the good of the entire American citizenry.


American Nurses Association (2009). Health System Reform. Web.

Boychuk, W. G. (2008). National Health Insurance in The United States and Canada: Race, Territory, and The Roots of Difference. Georgetown University Press.

California Nurses Association (2009). The Cost of Healthcare – More Americans Priced out of Care. Web.

Kelly, P. (2009). Essentials of Nursing Leadership & Management. (2nd ed.). Cengage Learning, 2009.

Kooijman, R. (1999). The Pursuit of National Health: the Incremental Strategy Toward National Health Insurance in the United States of America. USA: Rodopi.

Sebelius, K. (2009). Health Insurance Reform Will Benefit All Americans. Web.

Singer, P. (2009). Why We Must Ration Health Care. Web.

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