Class 1: 12Sep20 - Insurance Lecture

Question 1

What are the 3 components of the health crisis in the US dating back to 1976?

Answer 1

Cost, Access, Health Levels

Question 2

How much is today’s healthcare cost of the overall national income?

Answer 2

20%

Question 3

What are the main healthcare topics of debate?

Answer 3

Drug prices and health insurance

Question 4

What are “new: tools to impact healthcare?

Answer 4

Economic tools, strategy. big data

Question 5

What was Dave Ridley idea for a loaw and what it impacted

Answer 5

Priority review voucher for neglected diseases, each voucher >$100Mil

Question 6

Avg. healthcare cost per person in US? whats the breakdown on contributins?

Answer 6

$10K ($1k out of pocket and $9k by a third party, taxes and with premiums by emplpoyeers and employers)

Question 7

What is the issue with insurance and price sensitivity?

Answer 7

There are no STOPS for getting more services or higher cost ones

Question 8

Who would be potentail players to set a top to high healthcare cost?

Answer 8

Payer (insurer/employer), Provider (doctor), Patient, Goverment?

Question 9

What is CAPITATION with regards to healthcare provider costs?

Answer 9

A fix amount (budget) to spend on someone, but will provider then skimp on quality?

Question 10

How many amerivcans get insurance from employers? and how many are not insured at all?

Answer 10

1/2 americans, less than 10% are not insured.

Question 11

What is an insurance premium?

Answer 11

The fixed monthly payment to keep insurance. Employers tend to mapy most of it.

Question 12

What is an insurance deductible?

Answer 12

The amount of care I pay per year before the plan kicks in

Question 13

What is co-insurance?

Answer 13

The percentage of the care cost that I would pay (i.e 20%. Co-insurance is payment AFTER the deductible is met

Question 14

What is the “Diminishing marginal utility of income”

Answer 14

Each extra $ of income makes us happier but at a diminingh rate

Question 15

Describe and differentiate RISK AVERSION and LOSS AVERSION

Answer 15

Risk Aversion: Give up out later money to not lose it all (values her first dollar); Acceptlower incomr in exchange to eliminating possibility of no income

Loss Aversion: This person value his current wealth and frames LOSES based on his REFERENCE current/starting wealth

Question 16

How does insurance benefot patients, providers, and insurers?

Answer 16

Patients pay a small amount to avoid a big loos; Insurers use the law of large numbers that allow pooling of risk and profits; Provides get reliable payments

Question 17

What are two insurance problems?

Answer 17

1. Adverse selection (those who need insurance, get insurance) this could cause the insurance market to unravel
2. Moral hazard: people who get insurance ,use it- as theya re no tpaying the full cost

Question 18

Why don’t healthy people not exit the insurance market?

Answer 18

1. responsible and risk averse

2. receive tax advantages of empoyer-provided insurance ($10k in insurance or $7k CASH after tax)

Question 19

Why may excepting tax from health insurance be unfair?

Answer 19

• disproportionat help to high incomes
• inefficint as it then makes health insurance on sale; you get more coverage and with that people become insensitive to health care costs. ->basically more bang for your buck and you get price insensitive

Question 20

Why get insurance via employer?

Answer 20

1. Untaxed when provided by emplpoyeer
2. Employer has large risk pool to spread risk
3. Large employeers are required to do this, per Affortable Care Act

Question 21

How have HDHI (High decutible health insurance) helped on cost issues? how many people have it?

Answer 21

• It pushed cost to invidividuals to be more price sensitive
• Makes people shop around more, although no tmany providers are sharing cost info
• 1/4 of americans

Question 22

• What are some ocncers with high decutible cost insurance plans?

Answer 22

• can people make health decisions?
• should yound people, who lean this way, have the oppotunity to opt-in to this degrees, unabalcnig the pools of older/sick inidivduals?
• overall savings seem not to be there, breakpoint is
  $7k in costs. The top 5% spend $50/k per year abd that is 50% of the total spending

Question 23

HDHI Pro and Con?

Answer 23

Pro: More efficient market
Con: Can’t ask patient to shop for health care, can’t trust them

Question 24

Contarst Medicare AND Medicaid? How much of US fed budget is this? Which one covers long term care?

Answer 24

Medicare: [CARE]
- Regargeless of income, 65yrs +, 9 million disabled, if less than 65 (diability sociail security payments ongoing, kidney fail, ALS)

Medicaid [AID] [32 states and collab with Fed Govt.; 18sattes need extra conditions)
- Low income, aged, disabled, pregnant, children (CHIP)

Medicaid covers long-term care for low-income seniors, because Medicare does not cover long-term care.

Together this is 1/4 of Fed budget

Question 25

What is used to determine is someone qualifies as low income?

Answer 25

FPL -> Federal Poverty Level, by Dept. Health and Human Services (DHHS) ->$19,530 IN 2013

Question 26

Why does Mediccare and medicaid keep expanding respectively?

Answer 26

Medicare b/c people live longer

Medicaid b/c expanding to more states