Costs and Access of Health Care in the US

Question 1

Costs and access health care in the US

Answer 1

• Make sure not reiterating previous presentations too much
• Correlate w QOD
• Consider keeping slides but not discussing in class – they are supplemental, extra, not included on exams, but available for those wanting more thorough coverage.

Question 2

Methods of Paying for Health Care

Answer 2

• 1.out-of-pocket
• 2.individual private Insurance
• 3.employment based group private insurance – this is the bismark system for a national plan
• 4.government financing
• Which of the 4 models of how a country organizes its health care systems (for each):
  
  • 1.out-of-pocket (all may have some component, out of pocket if no insurance or govt program, also may be part of insurance and govt programs (i.e. co-pays, deductibles) in Bismark (prvt insurance) and National Health Insurance systems)
  • 2.individual private Insurance (hybrid of out of pocket national systems – individual is paying the entire cost of the insurance, basically paying for their health care) and Bismark, and may supplement government programs (i.e. Medigap or Medicare Part D – Pharmacy coverage)
  • 3.employment based group private insurance (Bismark – pure and simple)
  • 4.government financing (Beveredge – VA, and National Health Insurance - CMS (Medicare and Medicaid)
• National Models of Health Care Systems
  
  • 1.Beveredge –socialized medicine for veterans, military, Native Americans (VAH, IHS, Military Health System). (4)
  • 2.Bismark – social insurance for most people with jobs (BC/BS, Aetna, Kaiser, etc.) (3)
  • 3.National Health Insurance - for Americans over the age of 65, some who are poor or disabled (Medicare, Medicaid) (mainly
  • 4.Out of Pocket – for those who don’t qualify or have health insurance, or can pay (cash) (1, and others to some degree – i.e. co-pays w private insurance (Bismark) or National Health Insurance (Medicare copays)

Question 3

out of pocket (direct purchase)

Answer 3

• 11.8% of national expenditures in 2010 (Over 80% of this category is from people with employer sponsored health insurance and Medicare)
• (The maximum out-of-pocket cost limit for any individual Marketplace plan for 2015 can be no more than $6,600 for an individual plan and $13,200 for a family plan.)
• Health care as a “commodity”
• Out-of-pocket expenditures per capita: Out-of-pocket payments include the patients’ share of payment for the provision of health care services and prescriptions covered by insurance; this includes any copayments, coinsurance payments, or deductible payments. If an insurance claim was not filed (for example, for the purchase of over-the-counter medicines), the expenditures are not included in this metric. HCCI calculated out-of-pocket expenditures per capita by dividing total out-of-pocket expenditures by the total insured population.

Question 4

individual private insurance

Answer 4

• Individual health insurance is coverage that is purchased on an individual or family basis, as opposed to being offered by an employer.
• Before PPACA and Marketplaces, approximately 5% of population.
• For people who either don’t have employment based insurance or don’t want it
• Changing rapidly with ACA – anyone can buy insurance in federal or state marketplaces

Question 5

employment based private insurance

Answer 5

• Employers pay most or much of the premium that purchases the insurance
• Covers just under half of US population
• Tax deductible expense
• Contributes to rising costs of health care
• Why would employment based private insurance contribute to rising costs?
  
  • People don’t pay directly for services
  • People get more care than they need – no incentive to not be wasteful.
  • May get more insurance than needed – as tax free for employers and employees.
• More next week…

Question 6

governmnet financing

Answer 6

• Pays for almost two-thirds of health care in the US
• Covers about a third of people
• Old, poor, special groups
• At $5,960 per capita, government spending on health care costs in the U.S. was the highest of any nation in 2013, including countries with universal health programs such as Canada, Sweden and the United Kingdom.
• Estimated total U.S. health spending for 2013 was $9,267 per capita, with government’s share being $5,960.
• government health spending in the United States exceeded total health spending (government plus private) in every other country except Switzerland
• Americans pay the world’s highest health-related taxes –despite popular perception that the U.S. health care financing system is predominantly private
• Direct government payments for programs including Medicare, Medicaid and the Veterans Administration accounted for 47.8 percent of overall health spending.
• government outlays for public employees’ private health insurance coverage was $188 billion, or 6.4 percent of total spending
• tax subsidies to health care was $294.9 billion, or 10.1 percent of the total
• David U. Himmelstein and Steffie Woolhandler. The Current and Projected Taxpayer Shares of US Health Costs. American Journal of Public Health: March 2016, Vol. 106, No. 3, pp. 449-452.
• More later…
• What are they?
• Eligibility criteria for each?
• Medicare, Medicaid (MediCal), VA, IHS

Question 7

factors associated with HC costs

Answer 7

• Income
• Age
• Disease prevalence
• Determinants of health
• Genetics
• Behaviors
• Environment in which individuals live and work
• The social and economic environment in the community

Question 8

Additional factors influencing costs of health care

Answer 8

• prevalence of insurance coverage
• information gaps in health care
• supply and mix of services
• new technology
• Payment incentives driving volume
• Regulatory issues
• Quality and safety
• Malpractice litigation risks

Question 9

increasingly expensive population

Answer 9

• Aging population
• Nearly half the U.S. population has one or more chronic conditions, among them asthma, heart disease or diabetes,
• Behavioral factors
• Two-thirds of adults are either overweight or obese
• We’re growing older, sicker and more overweight.
• As we get older, we tend to need more medical care. The baby boom generation is heading into retirement, with enrollment in Medicare set to grow by an average of 1.6 million people annually. Additionally, nearly half the U.S. population has one or more chronic conditions, among them asthma, heart disease or diabetes, which drive up costs. And two-thirds of adults are either overweight or obese, which can also lead to chronic illness and additional medical spending.

Question 10

why do we pay so much for health care

Answer 10

• higher administrative costs
• complicated system for billing
• a 2-to-1 ratio of specialists to primary care physicians
• more standby capacity
• more malpractice claims
• less social support for the poor
• higher drug prices
• higher health care worker incomes
• ØFee-for-service; complicated system for billing, lack of cost consideration by consumers, tax breaks
• ratio of specialists to primary care physicians. In other countries the ratio is 50-50. Specialists spend more money and use more exotic interventions and also get paid more per hour of work
• more standby capacity. The United States has 4.2 times as many MRI scanners as Canada. less social support for the poor.
• Some of the additional spending comes about because we readmission rates, due to less social support services, home care, primary care

Question 11

additional factors contributing to the rising costs of health care in the US

Answer 11

• Technology
• Prices are higher
• Supply-driven demand of services
• Price insensitivity to end consumer
• Judgment based nature of physician care —practice variation
• Values and culture

Question 12

Fee for service

Answer 12

• Fee-for-service – reimburses for each visit, procedure, and test
• 1. We pay our doctors, hospitals and other medical providers in ways that reward doing more, rather than being efficient.
• Most insurers — including traditional Medicare — pay doctors, hospitals and other medical providers under a fee-for-service system that reimburses for each test, procedure or visit. Coupled with a medical system that is not integrated, this encourages overtreatment, including repetitive tests, the report says. New efforts in the federal health law and among some private insurers aim to move payments toward a flat rate for a specific condition, such as a knee replacement, or for a patient’s entire episode of care, in order to streamline costs. Medical systems and doctors are also looking to electronic medical records as a way to improve coordination and reduce unnecessary, repeated tests.

Question 13

Lack of transparency about cost and qualitym compounded by limited data to inform consumer choice

Answer 13

• Examples of hospital charges:
• $37.50/tablet acetaminophen (Tylenol) in hospital charge
• $7.00 each for alcohol prep pad.
• $308.00 for four boxes of 24 sterile 4X4 gauze pads
• 1999, average charges billed to Medicare were equal to 104 percent of the cost to provide medical care, according to a report issued last June by the Medicare Payment Advisory Commission, an expert panel that counsels Congress. By 2010, the ratio had more than doubled to 218 percent.
• If gas stations worked like health care, you wouldn’t find out until the pump switched off whether you paid $3 or $30 a gallon. If clothes shopping worked like health care, you might pay $80 for a pair of jeans at your local boutique and $400 for the identical pair at the nearest department store—and the clothes wouldn’t have price tags on them.
• Consumers Report (http://www.consumerreports.org/cro/magazine/2012/07/that-ct-scan-costs-how-much/index.htm)
• New drug for Hep C - if taken by everyone who should take it, would cost Americans more per year than all other brand-name drugs combined. As long as Sovaldi, remains under patent, Gilead Sciences, can charge whatever it wants. At the moment that’s $1,000 per pill, or $84,000 to $150,000 for a course of treatment.
• http://sandiegofreepress.org/2013/03/how-hospitals-mark-up-the-cost-of-over-the-counter-supplies-like-aspirin-and-q-tips-as-much-as-1000/

Question 14

what is the source of 1/4 of the excess costs of health spending

Answer 14

ADMIN

Question 15

theoretic model: health care costs and health outcomes

Answer 15

• As costs increase, initially and/or for some investments there is dramatic improvements in health (i.e. childhood immunizations, dietary supplementation).
• As interventions become more expensive, may be more marginal improvements in health, diminishing returns (i.e. expensive treatments for end stage cancer, prolongation of anencephalic infant)
• However, if we can shift off this curve, by greater efficiency or productivity, we can get better health outcomes for same cost.
• So, eliminating those parts of cost that are expensive but have limited value can allow greater resources to go towards those with greater bang for the buck.
• But – importantly – this implies that we are interested in the health of the overall population, not of an individual. A very expensive might be good for the health of a single person, but not make much difference for the health of the population the person is a member of.

Question 16

cost control

Answer 16

• Control price inflation
• Eliminate ineffective and inappropriate care
• Reduce administrative waste
• Innovations
• Prevention
• Prioritization and cost effectiveness analysis
• 1.regulate drug and procedure prices
• 2.Using EBM to utilize best practices
• 3.As much as 31% of US HC spending on services like insurance marketing, billing, claims, processing, and utilization review. (provider offices and orgs costs…)
• 4.New technologies and drugs – but final analysis may reveal increased utilization wiping out lower global costs
• 5.Some initiatives very cost effective (immunizations), some not so much (BP and breast CA screening and treatment)
• 6.CEA must be done through an ethical lens, and have to accept a population rather than individual perspective

Question 17

purpose of health insurance

Answer 17

• To protect individuals and families from high (and catastrophic) or unexpected health care expenses.
• The cost for this protection is paid as a monthly premium or annual tax.
• Indemnify. To compensate for loss; to provide security for financial reimbursement for costs incurred by health care expenses.
• Disability insurance is NOT health insurance! That’s to generate your income!!

Question 18

Company worker insurance: 1870s

Answer 18

Railroad, mining, and other industries begin to provide company doctors funded by deductions from workers’ wages.

Question 19

healthcare in the 1900 - 1910

Answer 19

• 1900s - US lags behind Europe in finding value in insuring against the costs of sickness.
• 1901 - AMA reorganizes as the national organization increases from 8,000 physicians in 1900 to 70,000 in 1910 – half the physicians in the country (beginning of “organized medicine”).
• Surgery common, especially for removing tumors, infected tonsils, appendectomies, and gynecological operations.
• Doctors are no longer expected to provide free services to all hospital patients

Question 20

1910 - 1920

Answer 20

• Progressive reformers argue for health insurance, seems to be gaining support.
• Opposition from physicians and other interest groups, and the entry of the US into the war in 1917 distract attention from the reform effort.
• Efforts to establish compulsory health insurance programs fail in 16 states.

Question 21

1920s - political complacency

Answer 21

• Higher cost of medical care is a new and dramatic development, especially for the middle class
• Growing cultural influence of the medical profession - physicians’ incomes are higher and prestige is established
• 1929—schoolteachers arrange for Baylor Hospital in Dallas, TX, to provide room, board, and specified services at a predetermined monthly cost. This plan is considered the forerunner of Blue Cross plans

Question 22

1930s

Answer 22

• The Depression changes priorities, greater emphasis on unemployment insurance and “old age” benefits
• Social Security Act is passed, omitting health insurance
• Push for health insurance within the Roosevelt Administration
• Blue Cross begins offering private coverage for hospital care in dozens of states

Question 23

1940s - companies offer health benefits

Answer 23

• Prepaid group healthcare begins (Kaiser)
• 1943—War Labor Board rules wage freeze does not apply to fringe – employers offer health benefits, giving rise to the employer-based system in place today.
• President Roosevelt asks Congress for “economic bill of rights,” including right to adequate medical care.
• President Truman offers national health program plan, proposing a single system that would include all of American society.
• Truman’s plan is denounced by AMA, and is called a Communist plot by a House subcommittee.

Question 24

1950s

Answer 24

• National health care expenditures are 4.5 percent of the Gross National Product.
• Reliance on system of private insurance for those who can afford it and welfare services for the poor
• Federal responsibility for the sick poor is firmly established
• Up to 18% now, projected to be almost 20% in the next few years

Question 25

1960s - cost of hospital care

Answer 25

• DOUBLED
• Over 700 companies were selling health insurance
• Unemployed, especially the elderly, were having difficulty affording insurance
• President Lyndon Johnson signed Medicare and Medicaid into law (Title XVIII and Title XIX of the Social Security Act)

Question 26

1978 - pregnancy coverage

Answer 26

• 1978—Pregnancy Discrimination Act amends Title VII of the Civil Rights Act of 1964. Requires that employers treat disabilities and medical conditions associated with pregnancy and childbirth the same as other disabilities or medical conditions.

Question 27

1986 - COBRA

Answer 27

• 1986—Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires employers with 20 or more employees to offer continued health coverage to terminated employees and dependents for a specified period (18 or 36 months).
• Required to provide but not pay for it … thus doubling, tripling, or increasing costs even more for terminated employees.

Question 28

1996 - HIPAA

Answer 28

• Health Insurance Portability and Accountability Act of 1996 (HIPAA) sets national nondiscrimination and “portability” standards for individual health insurance coverage, HMOs, and group health plans; establishes tax-favored treatment of long-term care insurance. Also regulations placed on standard electronic formats and for the privacy of personal health information.

Question 29

1996 - mental health parity act

Answer 29

• Mental Health Parity Act requires group plans that offer mental health benefits to provide the same level of coverage for such benefits that they provide for medical and surgical benefits. The act does not apply to groups of fewer than 50 and substance abuse or chemical dependency treatment. The act provides an escape clause for plans in the event plan costs increase more than one percent due to the act. The provisions of this act expired on Sept. 30, 2001.

Question 30

2000 - electronic processes

Answer 30

• Electronic Signatures in Global and National Commerce Act of 2000 gives electronic signatures and records the same weight as written signatures and records, which led to easier administration of electronic benefit, compensation, and human resources systems.

Question 31

2010 - patient protection and affordable care act

Answer 31

• Requires most U.S. citizens and legal residents to have health insurance.
• Created Health Benefit Exchanges through which individuals and small businesses can purchase coverage, with premium and cost-sharing credits available to individuals/families with income between 133-400% of the federal poverty level (the poverty level was $19,530 for a family of three in 2013)
• Imposed new regulations on health plans in the Exchanges and in the individual and small group markets.
• Expanded Medicaid to 133% of the federal poverty level.
• Required all insurer plans to provide certain list of item, could not use pre-existing conditions to deny coverage, abolished most limits on coverage

Question 32

premium, deductible

Answer 32

• Premium: Amount paid regularly (monthly or quarterly or deducted from a paycheck) to purchase insurance coverage
• Deductible: Money paid out of pocket for health services before the health insurance plan begins to pay for costs
  
  • (High premium plans tend to have low deductibles, and low premium plans tend to have high out-of-pocket costs)
  • Deductibles are often for procedures or imaging

Question 33

co-pay

Answer 33

• Set payment for costs of health care shared with the insurance company. The co-pay is the money the individual pays for services. The other portion of the cost is paid by the insurance company.
• Example is office visit co-pay, typically $20-$30 per visit

Question 34

co-insurance

Answer 34

• For many services the insurance company will pay a percent of the cost of the service (i.e. 70% - 90% of the cost).
• The co-insurance is the amount the individual pays for the service, figured as a percent of the cost.

Question 35

co-payments vs co-insurance

Answer 35

• Co-payments are fixed costs. You will pay the same amount for every office visit, hospitalization, ER visit, or prescription
• Co-insurance is a percent of the cost of the service

Question 36

“out of pocket”

Answer 36

• Out of Pocket Maximum: the maximum limit on how much you have to pay out of your own pocket for services in a calendar year. After that, 100% of the fees are paid by insurance
• includes deductibles, coinsurance, copayments, or similar charges
• does not include premiums, balance billing amounts for non-network providers and other out-of-network cost-sharing, or spending for non-essential health benefits.

Question 37

Maximum payments

Answer 37

• Lifetime Maximum Benefit = The maximum amount of money an insurance company will pay for your care.
• (The Affordable Care Act prohibits health plans from putting a lifetime dollar limit on most benefits you receive)

Question 38

actuarial value

Answer 38

• The percentage of total average health care costs for covered benefits that a plan will cover.
• For example, if a plan has an actuarial value of 70%, on average, you would be responsible for 30% of the costs of all covered benefits.
• However, you could be responsible for a higher or lower percentage of the total costs of covered services for the year, depending on your actual health care needs and the terms of your insurance policy.
• The average… for a standard population,
• Now required to be 80% for small plans; 85% for large plans
• The higher the actuarial value, the less patient cost-sharing the plan will have on average. The percentage a plan pays for any given enrollee will generally be different from the actuarial value, depending upon the health care services used and the total cost of those services. And, the details of the patient cost-sharing will likely vary from plan to plan.
• Actuaries are stats people (probabilities that youll get sick)

Question 39

pre-existing condition

Answer 39

• Insurance companies used to be able to deny coverage for health services related to a health condition the person had before they bought insurance
• (The Affordable Care Acts prohibits this and now all people are eligible to get health insurance)
• Association health plan – health care that is allowed to not pay for preexisting conditions

Question 40

high-deductible health plan (HDHP)

Answer 40

• plan with low premium and high deductibles
• a form of catastrophic coverage,
• maximum amount out-of-pocket limit for HDHPs is $6,450 for self-only coverage and $12,900 for self-and-family coverage (in 2015)
• (this limit does not apply to deductibles and expenses for out-of-network services if the plan uses a network of providers)

Question 41

health savings account (HSA)

Answer 41

• a tax-advantaged medical savings account for people who are enrolled in a high-deductible health plan (HDHP).
• funds contributed to an account are not subject to federal income tax at the time of deposit.
• Unlike a flexible spending account (FSA), funds roll over and accumulate year to year if not spent.
• HSAs are owned by the individual,

Question 42

flexible spending account (FSA)

Answer 42

• one of a number of tax-advantaged financial accounts that can be set up through an employer
• allows an employee to set aside a portion of earnings to pay for qualified expenses, most commonly for medical expenses but often for dependent care or other expenses.
• deducted from an employee’s pay, and not subject to payroll taxes

Question 43

traditional insurance model

Answer 43

• Insurance is based on the concept of “random hazard”
  
  • Something random will happen (e.g., car accident, house fire)
• A person buys insurance as protection against the likelihood of a “random event” happening
• If sure thing, the insurance company would charge full price of event, plus extra for administration (and even profit)
• Health Insurance ≠ Other Insurance
• Almost all people will use health care
• Use of health care is not random
  
  • In fact, if insured more likely to use (“Moral Hazard”)

Question 44

health insurance and the consumer role

Answer 44

• Consumers demand health insurance and often purchase it in markets
• Two key issues that can lead to market failure:
  
  • Moral hazard
  • Adverse selection

Question 45

moral hazard, adverse selection

Answer 45

• Moral hazard: Health insurance affects consumer demand for health care – higher utilization of covered services
• Adverse selection: When given a choice, people who choose to purchase insurance are likely to be a group with higher than average losses. (Also applies to a choice between low-option and high-option plans.)

Question 46

what is risk aversion?

Answer 46

• Are you “risk adverse”? Which would you select?
  
  • Your pay check, or
  • Double your pay check for correctly picking one coin flip.
  • Equal expected values; most of us are risk averse and select the “certain” option.
• Risk aversion - the degree to which a certain income is preferred to a risky alternative with the same expected income.

Question 47

main categories of health insurance

Answer 47

• Fee-for-service (indemnity)
• Managed care (pre-paid); HMO

Question 48

pricing of insurance policies

Answer 48

• Premium = Expected value of claims plus loading costs
• Loading cost: administrative and other costs associated with underwriting insurance policies.
• Loading costs = (risk premium + administrative costs + marketing costs + profits)
• Loading costs = “price” of insurance

Question 49

why is small group health insurance so expensive

Answer 49

• Per capita loading costs decrease as firm group size increases.
  
  • Loading costs = (risk premium + administrative costs + marketing costs + profits)
• Small group purchasers have less bargaining power.
• Adverse selection.

Question 50

do people choose to die

Answer 50

• Actuaries have found that, statistically, people who buy life insurance are more likely than average to die.
• Is this a “moral hazard” or an “adverse selection” problem?
• People who buy health insurance (especially on private individual market) more likely to use it

Question 51

possible solutions to increased utilization of health care services due to effect of adverse selection

Answer 51

• Waiting periods
• Preexisting condition exclusions
• Risk rating (underwriting)
• Insurance that precludes individual selection according to subscribers’ perceptions of their own risk (Universal health insurance, employment-based insurance)
• Targeted marketing
• Some of the techniques used by health insurance companies to minimize the effects of adverse selection.

Question 52

possible solutions to increased costs due to moral hazard

Answer 52

• (Higher) co-payments
• (Higher) deductibles
• Utilization review
• Since size of moral hazard problems (DWL) increases with price elasticity of demand, offer less generous insurance for specific services with more elastic demand (e.g., mental health coverage).
• High Deductible Health Plans (HDHP) keep usage down by increasing out-of-pocket share of costs

Question 53

keeping costs down with use of risk pools

Answer 53

• Insurers strive to maintain risk pools which, on average, has a population with health status similar to the general population
  
  • Avoid attracting those who are less healthy than average and thus may be “greater” users; getting a “sicker” population than “average” is “adverse risk”
  • Worry that those who buy, need it more: adverse selection - those at higher risk more likely to buy (and use) health care
• Medicare Part C (managed care plans that contract with the government to provide all services), selectively target their efforts at recruiting people over 65
• Best doctor doing bariatric surgery in plan A, those who are obese more likely to join plan A
• If a plan attracts a disproportionate share of people in poor health, the average cost of treating its population will increase
  
  • People with a higher than average risk of needing health care are more likely than healthier people to seek health insurance
  • People in better health will be unwilling to pay more than they would use and thus disenroll

Question 54

underwriting

Answer 54

• The process of determining:
• whether or not to accept an applicant for coverage,
• what the terms of the coverage will be,
• what the cost of the coverage will be (what is each individual’s risk of using health care)
• An assessment of risk (risk assessment) used by health insurers to obtain/maintain a predictable and stable level of risk within their risk pools.
• Variables looked at:
  
  • Health history
  • Age
  • Gender
  • Occupation
  • Geographic location
  • Genetic makeup?

Question 55

underwriting and individual market

Answer 55

• No “community” - individual rating
• Insurers want to know health history of each individual – to “pick” healthier members: “Cherry Picking”
• Don’t want
  
  • Sick, old, may get sick…
• Avoid those with preexisting medical condition: an illness or medical condition for which a person received a diagnosis prior to enrolling in a plan
  
  • May exclude if appears that that spurred need to get coverage (i.e. pregnancy)
• Have welcome parties upstairs 3 flights of stairs….
• Individuals now able to purchase on exchanges

Question 56

high deductible health plans (HDHP)

Answer 56

• Insurance policy that has a higher deductible and lower premium than traditional health plans.
• In 2016, must have deductibles of at least $1,350 for an individual and $2,700 for a family
• The out-of-pocket maximum cannot exceed $6,650 for an individual or $13,300 for a family.
• Can pair tax-deductible health savings account (HSA) with high deductible plan.
• Maximum contribution for HSAs are $3,350 (individual) and $6,550 (family)
• The IRS defines a high deductible health plan as any plan with a deductible of at least $1,350 for an individual or $2,700 for a family.
• An HDHP’s total yearly out-of-pocket expenses (including deductibles, copayments, and coinsurance) can’t be more than $6,650 for an individual or $13,300 for a family. (This limit doesn’t apply to out-of-network services.)
• Paired with Health Savings Accounts -
• Individual responsible
• Shop around
• Make smart choices
• Catastrophic coverage
• Protected on upper end (after spend deductible)

Question 57

health savings accounts (HSAs)

Answer 57

• A health savings account (HSA) combines high deductible health insurance (HDHP) with a tax-favored savings account.
• Money in the savings account can help pay the deductible.
• A type of savings account that lets you set aside money on a pre-tax basis to pay for qualified medical expenses. By using untaxed dollars in a Health Savings Account (HSA) to pay for deductibles, copayments, coinsurance, and some other expenses, you can lower your overall health care costs.
• An HSA can be used only if you have a High Deductible Health Plan (HDHP) — generally any health plan (including a Marketplace plan) with a deductible of at least $1,350 for an individual or $2,700 for a family. When you view plans in the Marketplace, you can see if they’re “HSA-eligible.”
• For 2018, you can contribute up to $3,450 for self-only HDHP coverage and up to $6,900 for family HDHP coverage.
• HSA funds roll over year to year if you don’t spend them. An HSA may earn interest, which is not taxable.

Question 58

uninsured in america

Answer 58

• Mostly adults, not children – half are childless adults.
• Poor and near-poor – 60% have incomes above federal poverty level
• Workers and family members – 80% in families with at least 1 worker
• Unskilled laborers, service workers.

Question 59

provider payments via managed care

Answer 59

• Fee for Service (with UR*)
  
  • Payment per procedure
• Preferred Provider Organizations (PPO) (UR)
• Health Maintenance Organizations (HMO)
  
  • Payment per patient (capitation)
  • May be salaried providers
• * UR (utilization review): insurer reviews and authorizes or denies payment
• How insurers transfer money to providers of services

Question 60

value based payment and reform

Answer 60

• Pay for Performance
  
  • Bonuses
• Bundled Payments
  
  • Episode based
• Care Coordination Payments
  
  • Payment for support healthcare services
• Accountable Care Organizations (ACOs)
  
  • Share savings; move towards global budget
• Merit-Based Incentive Payment System (MIPS)
  
  • Quality reporting and EHS use incentive programs
• Advanced Alternative Payment Models (APMs)
  
  • i.e. ACOs, Patient Centered Medical Homes, and bundled payment models
• Preview of coming attractions… The trend in insurer third party payment of providers.
• The MIPS is a new program that combines parts of the Physician Quality Reporting System (PQRS), the Value Modifier (VM or Value-based Payment Modifier), and the Medicare Electronic Health Record (EHR) incentive program into one single program in which Eligible Professionals (EPs) will be measured on:
  
  • Quality
  • Resource use
  • Clinical practice improvement
  • Meaningful use of certified EHR technology

Question 61

type of insurance affects accessibility

Answer 61

• Comparison study of appendicitis outcomes:
  
  • Fee-for-service
  • HMO
  • Medicaid
  • No insurance
• Medicaid or no insurance = 50% greater risk of ruptured appendix
• Fee-for-service vs HMO = 20% greater risk

Question 62

do out-of-pocket expenses affect access?

Answer 62

• RAND Health Insurance Experiment (RAND HIE)
  
  • experimental study of health care costs, utilization and outcomes in the United States, which assigned people randomly to different kinds of plans and followed their behavior, from 1974 to 1982. As a result, it provided stronger evidence than studies that examine people afterwards who were not randomly assigned. It concluded that cost sharing reduced “inappropriate or unnecessary” medical care (“overutilization”) but also reduced “appropriate or needed” medical care. It did not have enough statistical power to tell whether people who got less appropriate or needed care were more likely to die as a result.
• cost sharing reduced inappropriate or unnecessary medical care (overutilization)
• But - also reduced appropriate or needed medical care.

Question 63

does having Medicaid (Medical) = access?

Answer 63

• Only 54% of physicians in California accepted new Medicaid patients in 2013
• (Medicaid in April 2014 paid a standard rate of $18.10 for a traditional office visit for a returning patient)

Question 64

medicaid access

Answer 64

• “Medicaid Access Study Group”
• After identifying themselves as Medicaid recipients, callers secured appointments or authorization for walk-in visits from only 44 percent of the 953 sites that were called
• “Not accepting Medicaid” - most commonly stated reason for not granting an appointment (more than all other reasons combined).
• 63 percent of the 395 private practices did not accept Medicaid
• Mandatory copayments were another potential barrier to care. A copayment was requested by 168 of the 418 sites (40 percent) that initially agreed to give our callers an appointment or walk-in visit. The median amount requested was $45 (range, $1 to $200). Staff at 134 of these 168 practices (80 percent) stated that this fee would not be waived if the patient was unable to pay.

Question 65

racial, cultural and language barriers to access

Answer 65

• National Standards for Culturally and Linguistically Appropriate Services in Health and Health Care (the National CLAS Standards) are intended to advance health equity, improve quality, and help eliminate health care disparities

Question 66

the uninsured

Answer 66

• In past – treated as “charity cases”
• less likely to have a usual source of care outside of the emergency room
• often go without screenings and preventive care
• often delay or go without needed medical care
• pay more for medical care
• between 20,000 and 45,000 Americans die each year due to a lack of health insurance.

Question 67

lack of access

Answer 67

• Lack of ability to pay
• Lack of available services
• Barriers to services include:
  
  • Lack of availability
  • High cost and/or lack of insurance coverage
• Financial barriers are major cause of lack of access in this country

Question 68

access = the timely use of personal health services

Answer 68

• Gaining entry into the health care system.
• Accessing a health care location where needed services are provided.
• Finding a health care provider with whom the patient can communicate and trust.
• Access to health services means the timely use of personal health services to achieve the best health outcomes.1 It requires 3 distinct steps:
  
  • 1. Gaining entry into the health care system.
  • 2. Accessing a health care location where needed services are provided.
  • 3. Finding a health care provider with whom the patient can communicate and trust.
• Access to health care impacts:
  
  • Overall physical, social, and mental health status
  • Prevention of disease and disability
  • Detection and treatment of health conditions
  • Quality of life
  • Preventable death
  • Life expectancy

Question 69

results of lack of access

Answer 69

• Unmet health needs
• Delays in receiving appropriate care
• Inability to get preventive services
• Hospitalizations that could have been prevented
• These barriers to accessing health services lead to:
  
  • 1. Unmet health needs
  • 2. Delays in receiving appropriate care
  • 3. Inability to get preventive services
  • 4. Hospitalizations that could have been prevented

Question 70

insurance coverage is essential

Answer 70

• Uninsured people are:
  
  • Less likely to receive medical care
  • More likely to die early
  • More likely to have poor health status
• Health insurance coverage (whether private or public government) helps patients get into the health care system.
• Uninsured people are:
  
  • 1. Less likely to receive medical care
  • 2. More likely to die early
  • 3. More likely to have poor health status
• Lack of adequate coverage makes it difficult for people to get the health care they need and, when they do get care, burdens them with large medical bills.
• Current policy efforts focus on the provision of insurance coverage as the principal means of ensuring access to health care among the general population.
• (However, other factors may be equally important to removing barriers to access and utilization of services.)
• Almost half of population has employment based coverage.

Question 71

health insurance coverage in the US

Answer 71

• 1930-1970s: increases in proportion of Americans with employer based health insurance, and Medicare/Medicaid
• 1980s-2010: increases in uninsured, from 25 to 50 million people
• 2010: Drop in uninsured, from 50 to 27.3 million people
• Three broad periods in the past century…
• WWII, exemption of premiums from limitations on compensation
• Medicaid and Medicare – 1965
• 1980s-2010 – loss of employer insurance,
  
  • Change in labor force: Loss of jobs with benefits – manufacturing, shift to more low paid service jobs
  • Steep increase in cost of health insurance (premiums rising well over 100%, and employee share increasing)
  • Effect would have been worse without expansion of Medicaid (in some states) and SCHIP
  • COBRA (1985) requires employees to pay full cost
• Uninsured tend to be poorer (22% of those w incomes < $25,000, vs 6% of those w incomes > $100,000)
• Total Uninsured Rate: 8.6%
  
  • 18-64 Only: 11.9%
  • 0-17: 5.0%
  • Over 65: virtually 0 (with Medicare).

Question 72

underinsurance

Answer 72

• Deductibles and copayments/co-insurance
• Less generous plans due to rising premiums
• Gaps in Medicare coverage
• Lack of coverage for long-term care
• Short-term Health Plans
• Association Plans
• 62% of bankruptcies caused by inability to pay medical bills in 2007 – 75% of these had health insurance at the onset of their illness.
• Average deductible in 2014 was $1,200
• Rise in use of HDHP, that pay less.
• New short-term plans have limited coverage - ACA-exempt Insurance Options
• The laws ban short-term insurance and put limits on association health plans respectively. These are two types of coverage that are exempt from Affordable Care Act rules, such as accepting patients with pre-existing conditions and covering ‘essential health benefits’ including mental health and maternity care.
• Uninsured tend to skip recommended care, less preventive care tests, less specialist care

Question 73

healthcare and health status

Answer 73

• “Access” is only one factor
• Also:
  
  • Income
  • Race/ethnicity
  • Behaviors
• Socioeconomic status is the dominant factor.

Question 74

effects of ACA on access

Answer 74

• Enrollment in Medicare up (demographics)
• Enrollment in Medicaid up (economy)
• Employer based coverage stable (economy improving)
• Implementation of ACA provisions:
  
  • Young adults enrolled in private coverage (ACA)
  • No pre-existing clause children
  • No cap on insurance coverage
• Among its reforms, the ACA expanded Medicaid coverage in participating states to all nonelderly adults with incomes below 133 percent of the federal poverty level (FPL), about $16,000 for an individual or $33,500 for a family of four, and provided subsidized insurance through the health care marketplaces for small businesses and individuals without access to employment-based insurance. Since the ACA’s first open enrollment period in the fall of 2013, the number of uninsured Americans has fallen from 41 million to 27 million.
• Before implementation of the ACA’s coverage expansions, many Americans had inadequate access to care. A substantial share of the nonelderly population—from 9 percent to 19 percent, depending on the question asked—went without care because of cost in the period before the ACA expansions were implemented. The percentage was somewhat higher among those in the income range that is eligible for marketplace subsidies and much higher among those with incomes in the Medicaid-eligible range
• There is also evidence to suggest that the ACA has significantly reduced health disparities between racial and ethnic groups.

Question 75

current developments

Answer 75

• Short Term Plans – health insurance that is only good for a limited period of time (1-3 yrs max) – don’t have to abide by the affordable care act!
  
  • They are not good deals! But they are easier to get and it is cheaper (short term)
• Association Plans
• Elimination of Individual Mandate Penalty – this was a tax penalty (recently repealed)
  
  • This year you have to have healthcare or you have to pay a tax – but in the years to come, this will not be true
• Affordable Care Act required plans to cover essential health benefits and take patients with pre-existing conditions
• The Trump administration has been pushing for the return of short-term health plans and association health plans, two types of coverage that are exempt from Affordable Care Act requirements and could offer an affordable alternative to consumers who feel priced out of the Obamacare marketplace. But some California advocates say these plans offer shoddy coverage and pose a threat to the stability of the healthcare system.
• Before the Affordable Care Act required plans to cover essential health benefits and take patients with pre-existing conditions, association health plans gave small businesses an option to band together and buy their own insurance.
• Association Health Plans work by allowing small businesses, including self-employed workers, to band together by geography or industry to obtain healthcare coverage as if they were a single large employer.
• Association Health Plans will also be able to strengthen negotiating power with providers from larger risk pools and greater economies of scale. ACA limitations apply. But companies with < 15 employees don’t have to cover all the essential health benefits.
• Elimination of the individual mandate penalty and the proposed expansion of short-term plans would create the perfect storm that could take healthy consumers out of Covered California and lead to increased premium rates
• DEATH SPIRAL!!! – with insurance companies, if you don’t require insurance, people wont get it so premiums will increase and as premiums increase, less people can afford healthcare so then premiums increase again, etc. etc.