3. Raising Money Flashcards
Deductible v. Premium?
Deductible: Amount that the insured must pay out-of-pocket before the health insurer pays its share. Premium: Amount the policy-holder or sponsor (e.g. EMPLOYER) pays t the health plan to purchase health coverage
What’s an exclusion
Any medical expense not covered by insurance policy
what are coverage limits?
Max benefits (typically annual or lifetime) on certain services or expenses i.e. a max of 10 permitted chiropractic visits per year, or 1 million dollar lifetime max on prosthetics.
Waiting period?
any length of time after a policy begins during which certain medical expenses may not be covered, i.e. a 6-month waiting period on expenses related to cancer
Why are HMOs the most restrictive plans?
They require members to choose a PCP from provider network (OR ELSE they dun pay for costs)
Can PPO members go out of network for care and still receive insurance coverage?
Yep, but it will be for less than what they would have received for staying in-network.
POS?
Point of sale - mix of HMO and PPO. Like HMO, requires members to choose PCP. BUT members can go out of network and still receive coverage. Out-of-pocket expenses are substantially higher for members who don’t get referrals for non-network care.
EPO v. HMO?
Like HMO, gotta choose PCPs within network. BUT, they dun have to pay deductibles, and will pay small copays. Con…fewer physicians enrolled in this.
4 methods of paying for health care?
Out of pocket payment, individual private insurance, employment-based group private insurance, and government financing
Percentages of national health expenditures?
Almost half is govt financing, 30% employment-based private insurance, 10% out-of-pocket payment, and 5% individual private insurance. Values are rounded off.
100 years ago, how did people pay? How about first half of 1900s?
Through barter, and then through cash payment
Why can’t we just cash pay for insurance? (3)
Need v. Luxury, Unpredictability of need and cost, patients need to rely on physician recommendations
Explain need v. luxury?
If health care is a basic human right, then people who are unable to afford health care must have a payment mechanism available that isn’t reliant on out-of-pocket payments
Explain unpredictability of need and cost.
Unpredictability of health care needs makes it difficult to plan for these expenses.
Explain patients need to rely on physician recommendations.
The demand for health services is partially INVOLUNTARY and is often physician rather than consumer-driven. So you may not know what you’re getting into or if it’s really necessary.
How does private insurance work?
Add an insurer (private insurer), which requires TWO transactions…premium from the person to insurance plan, and reimbursement from the insurance plan to provider.
Why is individual health insurance not a dominant method for paying for health care?
HUGE administrative costs.
Who pays more of the premium for employment-based health insurance?
Employers!
Explain how the govt factors into employment-based health insurance.
Fed Gov views premium payments as a tax-deductible business expense. Cuz employer is paying for part of the premium, it’s like employee is getting tax-free income and the fed govt is subsidizing the insurance.
Explain experience rating.
People who are more likely sick pay higher premiums.
Community rating?
Health insurance provides mechanism to distribute health care more in accordance with human need rather than ability to pay. This is done by redistributing funds from the healthy to sick.
2 ways community rating is achieved?
1) WITHIN groups, people who become ill receive benefits in excess of their premiums, while healthy people can’t take advantage 2) BETWEEN groups, people who use health care less help pay for sick people who use more health care than their premiums can buy
How redistributive is experience rating?
A lot less redistributive than community rating…just like community WITHIN groups there is redistributing based on need, but BETWEEN groups there more healthy people don’t subsidize high risk groups
2 points of view regarding experience rating?
From elderly/chronic illness perspective, experience rating is DISCRIMINATORY. Healthy people might have another viewpoint…why should they voluntarily transfer their wealth to sicker people through insurance subsidy. This is why community rating CAN’T SURVIVE in a market driven competitive private insurance system.
Insurance companies were originally made to solve the problem of out-of-pocket expenses, but what 2 problems were created?
1) People no longer had to pay out of pocket, so they started using more health care unnecessarily 2) Since providers controlled insurance, and they don’t have to charge pts anymore, they can raise prices. Both = RISING COSTS
2 groups who received little benefit from employment-based private health insurance?
Poor (usually unemployed or low salary with no insurance) and elderly (needed health care most and were crapped on by the disappearance of community rating)
MCARE A v. B?
A is HOSPITAL insurance plan (through soc security taxes of employers and employees), and B is a PHYSICIAN SERVICE plan (through federal taxes and monthly premiums from the beneficiaries)
MCARE D?
Rx coverage, paid by federal taxes and monthly premiums
MCAID?
Run by the states, funded by federal ADN state taxes, pays for care of certain low-income groups
Who’s eligible for MCARE A?
As long as you reach 65 and are eligible for social security, nothing else matters … you’re eligible. If you’re not eligible for s.s., you can enroll by paying a monthly premium.
How are you eligible for social security?
If that person has paid into the s.s. system for 10 years, he and spouse are eligible
How is MCARE A financed? How will this change with ACA?
Through S.S.. The ACA increases SS payments for higher income taxpayers starting 2013.
Who’s eligible for MCARE B?
People who are eligible for MCARE A who pay the monthly B premium. Some low incomes dun gotta pay, higher incomes pay more.
