Assignment 5 - Premium Price Sensitivity and Out-Of-Network Benefits Flashcards
presents the maximum amount that individuals are willing to pay to avoid the consequences of an uncertain loss.
Risk premium
In insurance vernacular the actual amount that is paid over the expected loss is called the ________
loading fee.
Why is the total premium the employer pays on behalf of the employee not used by analysts to examine the impact of insurance premiums on the choice of health insurance plan?
they are more worried about out of pocket
The author of the 1986 study found that a 10% increase in the monthly out-of-pocket premium had a short-run effect of reducing the HMO share of a firm’s subscribers by __ and a long-run effect of a reduction of __.
- 2%
- 6%
What other factors besides changes in out-of-pocket premiums add complexity to estimating the effect of out-of-pocket premiums on health plan choice? (4)
- the availability of other plan substitutes within and outside the employee’s own firm
- the introduction of a different employer contribution structure
- the degree of choice of providers among the plans being offered
- the employee’s age and household income and the presence of chronic disease in the employee’s household.
The size of the effect of higher monthly out-of-pocket premiums is also dependent on:
- a) the initial enrollment share of the plan raising its price
- b) the share the plan has of overall enrollment of similar plans.
Since the late 1990s, the level of insurance coverage through employers has eroded. This decline has been linked to three potential sources:
- fewer firms are offering coverage
- fewer workers are eligible for the coverage offered
- and fewer eligible workers take the coverage offered to them
Study findings are mixed and the various studies’ estimates of price responsiveness indicate that the out-of-pocket premium has only a minor influence on____
the decision to decline coverage.
The methods insurers use to calculate provider reimbursement for out-of-network services vary by plan, but most commonly reimbursement is capped using either(2)
- a percentage (usually 140% to 250%) of the Medicare rate
- the usual and customary rate (UCR).
What issues make it difficult for individuals to manage access to out-of-network services? (3)
- inadequate or outdated directories to determine provider network participation
- failure by most providers to publish list prices for their services
- difficulty understanding insurers’ out-of-network reimbursement schedules
Ordinarily, plans do/do not allow out-of-network cost-sharing or balance billing to contribute to an individual’s annual out-of-pocket maximum.
do not
Adequacy of provider networks is affected by (5)
- geography
- provider type
- the absolute number of providers
- the amount of provider competition
- insurer policies, including reimbursement.
What are the incentives and disincentives for providers to join a network?
- Provider competition / lack of provider competition
What controversy has swirled around the payment of emergency care?
Balance billing for emergency services
How is the implementation of the ACA impacting out-of-network coverage?
Insurers are now required to provide details on their plans using plain language and a standardized form called a ‘’Summary of Benefits and Coverage (SBC),”