Chapter 6 Reading Guide

Question 1

Group Insurance

Answer 1

insurance from an employer, union, or professional organization.

Question 2

Self-insured Plan

Answer 2

employer acts as its own insurer instead of obtaining insurance through an insurance company.

Question 3

Individually purchased private health insurance

Answer 3

this is a nongroup plan of insurance.

Question 4

High-deductible health plans (HDHPs)

Answer 4

combines a savings plan with a health insurance plan that carries a high deductible.

Question 5

COBRA

Answer 5

allows workers to keep their employers group coverage for 18 months after leaving a job.

Question 6

Medigap

Answer 6

private health insurance that can be purchased only by people enrolled in the original Medicare program.

Question 7

Premium

Answer 7

amount charged by the insurer to insure against specified risks.

Question 8

Covered services

Answer 8

services that are covered by an insurance plan are referred to as “benefits.”

Question 9

Deductible

Answer 9

amount the insured must first pay each year before any benefits are payable by the plan.

Question 10

Copayment

Answer 10

flat amount that the insured must pay each time health services are received.

Question 11

Coinsurance

Answer 11

a set proportion of the medical costs that the insured much pay out of pocket.

Question 12

Medicare Part A: Hospital Insurance

Answer 12

entitlement program. Benefits regardless of the amount of income and assets they may have at the age of 65.

Question 13

Medicare Part B: Supplemental Medical Insurance

Answer 13

voluntary program financed by general tax. Income-based and covers limited home health services.

Question 14

Medicare Part C: Medicare Advantage

Answer 14

provides additional choices of health plans, with the goal of channeling more beneficiaries into managed care.

Question 15

Medicare Part D: Prescription Drug Coverage

Answer 15

available to anyone who has coverage under parts A or B. Requires monthly premium to Medicare.

Question 16

How did Supreme Court Ruling on ACA affect Medicaid?

Answer 16

The Supreme Court’s ACA ruling made Medicaid expansion optional for states. Originally, it mandated coverage for low-income individuals, but the ruling allowed states to choose whether or not to expand Medicaid, with no federal penalties.

Question 17

How did ACA affect Medicaid in terms of coverage and cost?

Answer 17

coverage increased and costs grew as states were given the option to expand care.

Question 18

CHIP (Childrens Health Insurance Program)

Answer 18

offers federal funds in the form of grants to states. This was offered to families that exceeded the Medicaid threshold.

Question 19

MHS (Military Health System)

Answer 19

provides medical services to active-duty and retired members of the armed forces, their dependents, and former spouses.

Question 20

Tricare

Answer 20

health care program for uniformed service members, retirees, and their families around the world. Works with Medicaid.

Question 21

VHA (Veterans Health Administration)

Answer 21

the largest integrated healthcare system in the United States, operated by the U.S. Department of Veterans Affairs, providing medical services to millions of veterans and overseeing various healthcare facilities and initiatives.

Question 22

What is fee-for-service and its main problem?

Answer 22

a reimbursement method where healthcare providers are paid for each individual service or procedure they perform, but its main problem is that it can lead to cost escalations as providers may be incentivized to provide more services to increase their reimbursement.

Question 23

Retrospective Reimbursement

Answer 23

a payment method in which reimbursement rates for healthcare institutions are determined after evaluating the costs incurred in delivering services, often leading to a lack of incentives for efficiency and cost containment.

Question 24

Prospective Reimbursement

Answer 24

forward-looking payment method that determines the amount of reimbursement in advance, using established criteria, before healthcare services are delivered, with the goal of incentivizing cost reduction and predicting future healthcare spending.

Question 25

Value-based payment

Answer 25

a reimbursement approach that rewards healthcare providers based on the quality of care delivered and cost-efficiency, aiming to reduce adverse events, adopt evidence-based standards, improve patient experience, and increase care transparency.

Question 26

Covid-19 effect on Health Insurance and Financing

Answer 26

significant health insurance and financing effects, including increased direct medical costs, potential long-term health consequences, economic hardships resulting in job losses and loss of health insurance, government mandates for coverage of coronavirus tests, and financial strains on healthcare providers due to a cessation of elective surgeries.

Question 27

Balance Bill

Answer 27

The amount a provider bills to the patient for the portion not paid by insurance.

Question 28

Beneficiary

Answer 28

Refers to the insured, especially a person insured through a public program such as Medicare or Medicaid.

Question 29

Benefits

Answer 29

Services covered by an insurance plan.

Question 30

Capitation

Answer 30

A fixed monthly fee based on the number of enrollees that is paid to a provider by a managed care organization.

Question 31

Charge

Answer 31

Fee (price) for a service generally set by the provider.

Question 32

Claim

Answer 32

Refers to a billing for services the provider has to file with the insurer in order to receive payment.

Question 33

Coinsurance (second definition)

Answer 33

The ratio of cost sharing between the insurance plan and the insured. For example, an 80–20 coinsurance means that insurance will pay 80% and the patient will pay 20% of an approved charge.

Question 34

Consumer-directed health plan

Answer 34

A high-deductible health plan that carries a savings option to pay for routine health care expenses.

Question 35

Copayment (second definition)

Answer 35

The portion of total medical costs that the insured has to pay out of pocket each time health services are received.

Question 36

Cost shifting

Answer 36

The practice whereby providers charge extra to payers who do not exercise strict cost controls to make up for inadequate reimbursement from other sources, or to make up for uncompensated care rendered.

Question 37

Deductible (second definition)

Answer 37

Amount the insured must first pay before benefits by the plan are payable. A deductible is commonly required to be paid on an annual basis.

Question 38

Fee schedule

Answer 38

A list showing individual fees for each type of service.

Question 39

Gross Domestic Product (GDP)

Answer 39

The total value of goods and services produced in a country. It is an indicator of total economic production.

Question 40

Group Insurance (second definition)

Answer 40

A policy obtained through an entity, such as an employer, a union, or a professional organization, that anticipates that a substantial number of people in the group will participate in purchasing insurance through that entity.

Question 41

High-Deductible health plans (HDHPs; second definition)

Answer 41

A health plan that combines a savings option with a health insurance plan carrying a high deductible.

Question 42

Insurance

Answer 42

A mechanism for protection against risk.

Question 43

Insured

Answer 43

The individual who is covered for risk by insurance.

Question 44

Insurer

Answer 44

The insuring agency that assumes risk.

Question 45

Medigap (second definition)

Answer 45

A private insurance policy purchased by many of the elderly to pay for expenses not covered by Medicare.

Question 46

Moral Hazard

Answer 46

Consumer behavior that leads to a higher utilization of healthcare services because people are covered by insurance.

Question 47

National Health Expenditures

Answer 47

Total amount spent for all health services and supplies and health-related research and construction activities consumed in the United States during a calendar year.

Question 48

Preexisting condition

Answer 48

Any significant health problem that an insured had prior to obtaining health insurance coverage; examples include diabetes, cancer, heart disease, HIV/AIDS, etc.

Question 49

Premium (second definition)

Answer 49

The amount charged by the insurer to insure against specified risks.

Question 50

Prospective Reimbursement (second definition)

Answer 50

A reimbursement methodology in which rates are set on the basis of costs already incurred.

Question 51

Risk

Answer 51

The possibility of a substantial financial loss from an event of which the probability of occurrence is relatively small.

Question 52

Self-insured plan (second definition)

Answer 52

A health insurance plan in which the employer acts as its own instead of obtaining insurance through an insurance company.

Question 53

Third-party employers

Answer 53

Insurance companies, Blue Cross/Blue Shield, and the government (for Medicare and Medicaid) who make payment for claims on behalf of the insured.

Question 54

value-based payment (second definition)

Answer 54

Reimbursement to providers for quality of care and cost efficiency.