Exam 3 Flashcards
FSA
Flexible Spending Account
- Must be established by an employer through a cafeteria benefit plan
- Balances unspent at year-end are lost – “Use It or Lose It!”
- Entire annual designation may be spent at anytime
HRA
Health Reimbursement Account
MSA
Medical Savings Account
HSA
Health Savings Account
- A tax-sheltered financial account into which individuals and employers may contribute funds and from which individuals may withdraw money to pay for qualified health services
- Contributions from an employer or employee are made pre-tax
- Funds may be withdrawn tax free to pay for qualified medical expenses, except health insurance premiums
CDHP
Consumer Directed Health Plan
Combines a High Deductible Health Insurance Plan (HDHP) and a Health Savings Account
Rationale behind CDHP
- Consumers are responsible for much of the price of initial medical care expenditures.
- As a result, they have incentives to shop more carefully for health services, both in finding providers who offer the preferred set of services and in negotiating with providers for lower prices.
The Small Group Market is typically defined as what
- A firm with fewer than 50 employees
- They aren’t subject to the pay or play mandate
- They DON’T have to offer insurance coverage or pay a $2000 fine per worker
What are HSA’s typically combined with?
High Deductible Insurance Plan
Why don’t Small Employers offer Health Insurance?
- Business can’t afford it
- Revenue too uncertain
- Employees have coverage elsewhere
- Employees prefer wages
Why do Small Employers offer Health Insurance?
- Right thing to do
- Helps recruitment
- Owner coverage
- Decreases turnover
What is Medicaid and who does it cover?
A joint federal and state funded needs based program designed to provide health insurance coverage to:
- Pregnant Women
- Children
- Elderly
- Disabled
Who is eligible for Medicaid Coverage?
- Categorically needy
- General eligibility determined by being a member of a “covered group/category” (Low Income, Blind, SSI recipient)
- Medically needy
- Incomes adjusted for medical spending
- Special groups
- Dual eligibles
Who comprises the majority of the Medicaid Enrollees and Expenditures?
Enrollees: Children and Adults
Expenditures: Disabled and Elderly
Who tends to use capitation more aggressively?
Medicaid managed care tends to use capitation more aggressively than private sector
Who funds Medicaid and who dictates what is covered?
- Federal government matches state Medicaid spending based on the ratio of state to federal per capita income
- The state decides the majority of the services that are covered
Future of Medicaid under ACA?
- The ACA required the states to expand their Medicaid programs or incur the complete loss of federal matching of their existing Medicaid program.
- This matching percentage will slowly decrease from 100% every year.
- 17 million people would gain Medicaid coverage if every state were to expand their program.
What’s CHIP?
Children’s Health Insurance Program
- CHIP provides federal matching funds for the provision of health insurance to lower-income CHILDREN up to 350% of the FPL, at the state’s discretion.
Who funds CHIP?
Average federal match is 15 points higher than Medicaid
How do the qualifications of CHIP differ from Medicaid?
Medicaid/CHIP covers 1 in 3 kids in the US
CHIP covers Children up to 350% of the FPL
What is Crowd Out?
Crowd-out exists when a public program such as Medicaid causes people to drop private coverage and shift to the public program.
What is Long Term Care Insurance?
It covers:
- Nursing home care
- Assisted living
- Home health services
Why don’t more people have Long Term Care Insurance?
Demand side factors: 1. Misinformed Public 2. Availability of Informal Care Real Reason: 1. Most people already have coverage known as Medicaid
Four Parts of Medicare
Part A - Inpatient services (hospital, SNF, home health)
Part B - Physician/ambulatory services, DME
Part C - Managed care (Medicare Advantage)
Part D - Prescription drug
How is each Part of Medicare funded?
Part A - Hospital Insurance Trust Fund, which gets it’s funding from the payroll taxes (FICA Tax)
Parts B and D- Supplementary Medical Insurance Trust Fund which is funded by 25% from premiums 75% from general federal taxes
Part C - Funded through HI and SMI Trust Funds
Who’s eligible for Medicare?
- 65+
- Disable
- End Stage Renal Dialysis
What does the future of Medicare look like?
Due to the retirement of the Baby Boomers there will be fewer people paying FICA and more people drawing from the trust funds
Other things that will decrease the amount of money in the funds:
1. Increasing healthcare prices
2. Increasing healthcare utilization
3. Expanding healthcare technology
