Exam 1 Flashcards
Industry Sickness Funds
Employees pay 1% of wages weekly to sickness funds that sick co-workers can draw up to 60% of wages when ill
Safeguards:
- age limits
- waiting periods
- coworkers visited sick to verify illness
Employer’s (3) Defenses to Liability for Injuries in the Workplace
- Worker assumed the risk as part of employment contract
- It is the co-worker who caused the accident
- Worker is also at fault
Workers’ Compensation
Employers are liable for injuries that occur in the workplace if the employer is negligible
States enact workers’ compensation insurance
Employers could buy coverage, accept full liability, and retain defenses only if they purchased insurance
Why would employers want workers’ compensation insurance?
More predictable costs
Compulsory Health Insurance Initiatives - American Association of Labor Legislation Proposal
Compulsory contributions from employer, employees, and state for all manual laborers with income
American Association of Labor Legislation Proposal - Stakeholder Views
Employers - against b/c there was no offsetting reduction in costs
Organized Labor - mixed
AMA - initially supported, but then opposed b/c of interference b/w doctor-patient relationship and would decrease physician income
Baylor University Hospital - Single Hospital Plan
Lead up: Baylor University sees revenues and occupancy drop and charity care increase
Enrolled public school teachers for $0.50/month for 21 days of care in hospital for hospital services
All Hospital Plans
Sacramento, CA developed plan that included all community hospitals
Grew in populatrity from 1932-1933
American Hospital Association Committee
Approved hospital plans in 1933 if they were (1) nonprofit, (2) improved public welfare, (3) dignified promotion, (4) cover hospital charges only, (5) free choice of physicians, and (6) no competition among plans (1937)
Are hospital service plans insurance?
Initially: no, viewed as prepayment for hospital costs
1933: NY insurance comissioner says yes b/c hopsitals collect payments and promise care in te future –> hospital plans must comply with insurance laws
Enabling Legislation for BC plans in NY
(1) Nonprofit
(2) exempt from reserve requirements and premium taxes
(3) rates reviewed by insurance comissioner
Birth of Blue Shield Plans
Established first by California Physician’s Service
Free choice of physicians
Indemnity plan
Previously, health was viewed to be uninsurable b/c:
(1) not definite
(2) not measurable
Commerical Insurance
Began offering hopsital indemnity plans in 1934 and surgical indemnity coverage in 1938
Prepaid Group Practice?
Pay prepaid amount to group and the group will take care of your enrollees
Prepaid Group Practice - Ross-Loos Clinic (1929)
2,000 workers and families of LA Dept. of Water & Power
Contracted with clinic to provide comprehensive care
Prepaid Group Practice - View of Physicians
Strongly opposed
Worried about losing income since wealthy patients would move into prepaid practice which would be cheaper, making it so that physicians would lose majority of their profits which came from the affluent market
Those in prepaid group practices were shunned from medical societies and hospital access
Led to prepaid group practice building and running their own hospitals
Why did health insurance start to grow in the 1940s and 1950s?
(1) WWII led to wage and price controls, so in order for employers to compete for workerse, they offered health insurance as an incentive
(2) Taft-Hartley Act (1974), which made health insurance as a condition of employment and subject to collective bargaining
(3) Favorable taxes
- IRS ruled health insurance benefits are not subject to federal icnome tax
- Congress (1954) exempted employer sponsored heatlh insurance from federal income tax
