Class 7 Flashcards
Finance
Government, Private, Out of Pocket
US Healthcare Basics
inherently redistributive, government involved in all levels, obtained in a variety of way
Why Insurance?
Manage and redistribute financial risk of unexpected events, increase purchasing power of public over providers, insulate government and employers from individual decisions and illnesses, manage tradeoffs that affect price
What form of payment was most common for most of U.S history?
Out-of-pocket
What changed in US history that made insurance necessary?
The cost (and quality) of care skyrocketed,
WW2 leads employers to start offering insurance as an employee benefit
Goal of Insurance
Manage Risk of Catastrophic Costs by pooling funds across a large number of people
Strategies for Managing Risk
Community rating (population-based pricing) and Experience rating (based on individual or group predicted need for medical services)
Community rating
Whole Community Pooled Together, Early forms of insurance coverage (BC/BS), Current ACA Marketplaces
Experience rating
specialized pool based on shared life experience, employer sponsored insurance, small group and individual plans
private insurance basics
Cost-sharing of insurance costs between the employer and the employee
premium
the set amount the individual pays for health insurance every month even if you use no health services
deductible
the additional amount the individual pays for covered health care services before your insurance starts to pay
copayment
a fixed amount you pay for every health service you receive after you pay your deductible
co-insurance
the percentage of costs you pay for after your deductible (i.e., being responsible for 20% of costs after deductible is met)
