Exam 2 Definitions Flashcards
community rating
- A health plan sets the same premium rate for anyone in a given geographical area
- The insurer ignores any differences in expected costs among insured groups or people (previous illness, existence of a chronic condition, risky lifestyles, etc.)
- Achieves redistribution of health care more in accordance with human need from healthy to sick and from rich to poor
- Erosion of community rating has led higher cost groups (and individuals) to be charged higher premiums, some employers may not hire people with chronically ill-dependents for fear that it will increase their healthcare premiums
- This is one reason why proposals to reform health insurance often suggest a return to community ration or some other type of premium subsidy from the chronically-well to the chronically-ill
experience rating
- Experience-rating
People pay different premiums based on differences in their demographics, past health care utilization, medical status, and other factors - This type of “experience or actuarial rating” is used to minimize risks associated with policyholders who have high-risk related conditions
redlining
Refusing coverage to certain individuals or groups on the basis of geographical location, belonging to certain business groups that were considered as high-risk or on the basis of presumed high-risk lifestyles or history of excessive claims
managed care
- Any system that controls costs through closely monitoring and controlling the decisions of healthcare providers
- Most well known type of managed care plan is HMO
- Key feature: provision of care to a defined number of enrollees as a capitation (fixed) rate per member per month. As a result, cost centers such as hospitals, physician groups, clinics, etc. must be managed under a fixed budget
Why might people not like it?
- Managed care restricts autonomy of physicians
- Controls patient access and utilization of services requiring prior approval of services and referrals
- It rations services, physicians are expected to provide only medically necessary procedures
- Primary care physicians often serve as a gatekeeper to limit further or expensive services
HMO
- Health Maintenance Organization
- HMO act of 1973, President Nixon
- Aim to save costs within the private insurance sector by regulating employers
- The government gave employers the choice between a cheaper HMO plan and a more expensive option, so that more people would be covered by the HMO
- Required by law that any employer with over 25 employees would have to have some type of HMO
- HMO insurance plans represent a major shift from typical insurance policies (indemnity insurance, consumers free choice of provider)
- Insurance companies decide care providers, and may be limited with coverage area or available doctors. Limited number of specialists and typical limited care options
PPO
- You determine care providers, typically national coverage. Options for any specialist, options for best available care
- Likely involve more out-of-pocket costs like higher copayments or deductibles, but it allows you to go out of network if you agree to pay more
gate-keeping
- Patient has to see a provider before seeing a specialist
- Controlled access to providers with referrals and network system
premium
- Payments made by the insured on a monthly or annual basis to cover the specific set of losses indicated in the insurance policy
out of pocket maximum
- Came from Affordable Care Act, fundamental concept in making insurance affordable
- The most that you have to pay for covered services in a plan year. After you spend this amount on deductibles, copayments, and coinsurance for in-network care and services, your health plan pays 100% of the costs of covered benefits
- OOPM doesn’t include: monthly premiums, anything you spend for services your plan doesn’t cover, out of network care and services, costs above the allowed amount for oa service that a provider may charge)
deductible
The amount you must cover for medical expenses before your insurance policy starts paying, usually made on annual basis
insurance marketplace/exchange
- All states have this as of 2014
- An online market where you (as an uninsured individual), look for a plan among plans offered by various private insurance companies
- Can everyone go to the insurance marketplace? No. only people whose employer does not provide insurance
– Or, if their employer provides insurance but it doesn’t meet a certain standard (needs to be affordable, meet minimum value standard, annual out of pocket limit, provide substantial coverage for hospitalization and physician care) - State-based marketplace: states running a state-based marketplace are responsible for performing all marketplace functions. Consumers in these states apply for and enroll in coverage through marketplace websites established and maintained by the states
- Federally-facilitated marketplace: HHS performs all marketplace functions, consumers apply for and enroll in coverage through healthcare.gov
Bronze, silver, gold, platinum plans
- Five levels of coverage available in the marketplace
Bronze 60% of actuarial value (the percentage of total average costs for covered benefits that a plan will pay)
- Most people are required to have insurance that is at least bronze level 60% or have to pay a federal tax penalty
Silver 70%
- If you don’t expect to use regular medical services and don’t take regular prescriptions, you may want silver, bronze or catastrophic. These plans cost less per month but will pay less of your costs when you need care
- If you qualify to save on out of pocket costs, silver may over best value, you might qualify based on household size and income. - You can only get out of pocket savings if enrolled in a silver plan
Gold 80%
- If you expect a lot of doctor visits or need regular prescriptions, you should look at gold or platinum.
- Generally have higher monthly premiums but pay more of your costs when you need care
Platinum 90%
(Catastrophic less than 60%)
- Under 30 or have a hardship exemption and want low monthly premiums
guaranteed issue
Beginning in 2014 insurers required to issue or renew a policy to anybody, regardless of any preexisting conditions
Insurance companies not allowed to refuse renewal because someone became sick
- The ACA requires insurers in the individual market to cover anyone who wishes to enroll
- ACA restricts how insurers can vary premiums based on enrollee characteristics, can’t vary at all based on health status or gender, they can minimally vary based on age
individual mandate
- Means everybody needs to buy health insurance
- Ensures that healthy and young Americans who may not use health care frequently will buy insurance plans so that the insurance companies have a broader risk pool to pay for the guaranteed issue
Premium tax credits, Cost-sharing reductions (CSRs)
- Federal tax credits that help families pay for insurance (a tax subsidy. People too much income to qualify for more but still not rich)
- Available to all US citizens, residents and immigrants with work visas with income between 138-400% of the federal poverty line
- Available on a sliding scale if they choose to purchase insurance via a marketplace
- American Rescue Plan Act ARPA expanded and enhanced marketplace premium subsidies, recently placed Inflation Reduction Act IRA ensures ARPA’s subsidies continue until 2025
