Final Exam Flashcards
What is insurance for?
Manage and redistribute financial risk of unexpected events
Manage trade offs that affect price (e.g. choice of provider, benefit package, cost split between sponsor and member)
History of US Healthcare
Out of pocket payment was the most common method, employers started offering insurance as a benefit during WWII
Cost/quality of healthcare skyrocketed as a result–> led to Medicare/Medicaid for people without jobs
Insurance Premium
The set amount the individual pays for health insurance every month even if you don’t use services (employer also contributes)
Insurance Deductible
The additional amount the individual pays for covered health care services before insurance starts to pay
Insurance Copayment
Fixed amount you pay for every health service you receive after you pay your deductible (i.e. $30 to see a dermatologist)
Co-Insurance
Percentage of costs you pay for after your deductible (i.e. being responsible for 20% of costs after deductible is met)
Affordable Care Act (ACA)
Medicaid coverage for everyone below 138% of the FPL
Health insurance exchanges for everyone above Medicaid eligibility threshold
Federal subsidies between 100-400% of FPL
Employer Sponsored Insurance
Federal tax policy subsidizes employer/employee- Used to collect, pool and redistribute money
Larger employers- effectively self-insured, risk pool is employees/dependents
Smaller employers- small carrier-based risk pools=high premiums
What are majority of bankruptcies in US caused by?
Inability to pay medical bills
Bronze Level Insurance
Lowest premium- highest cost sharing
Protects against catastrophic event, minimal coverage for routine care
Silver Level Insurance
Moderate premium- moderate cost sharing, tax credits based on 2nd lowest sliver plan
Gold Level Insurance
Lowest cost sharing- better deal for those expecting to use significant amount of care
Platinum Level Insurance
Highest premium, lowest cost sharing
Tax Cuts and Jobs Act of 2017
Trump’s approach to the ACA- made tax penalty for not having health insurance under the ACA $0
Key parts of the campaign- repeal ACA and replace it with something better (but it never happened)
California v Texas
Claimed Tax Cuts and Jobs Act rendered entire ACA unconstitutional
DOJ took many positions, key questions about “severability”, ended litigation for lack of standing
Standing- you have to be an aggrieved party to sue, argue that this doesn’t apply
Medicare
Eligibility- 65 and over or under 65 w/ permanent disabilities
2 yr waiting period for Social Security Disability Insurance & Medicare
No waiting period End-stage renal disease (ESRD) or ALS
Benefits of Medicare
- Providing insurance for people you least want in insurance pools (makes it more expensive for everyone else)
- Takes burden off of people would would have to care for family members
History of Medicare
AMA- dominant force in preventing major health form (“socialized medicine”)
Old Age and Survivors Insurance (OASI) strategy
1) Focus on elderly- political appeal, needy/deserving
2) Build on existing social security system
3) Restrict scope of benefits- move away from total health system reform and just focus on protecting the elderly
Medicare Part A- Hospital Insurance
Includes hospital care, skilled nursing, hospice and some home health care
$400/mo without work history, free if you or your spouse have 10 min years paying into SS from work
Long-term care: all costs out of pocket after day 101, doesn’t cover “unskilled” nursing home residency
Medicare Part B
Covers MD visits, preventative care, medical devices, ambulance, outpatient care and some home care (technically optional, most opt in)
Medicare Part C
Medicare advantage- private alt. to Parts A/B added later, broader benefits (dental, fitness, eye, prescription drugs)
- Feds negotiate premium w/ private plan sponsors, individuals still pay part of premium
-Higher cost for federal gov.
-Elderly can forgo A &B for Medicare Advantage
Medicare Part D
Prescription drugs- Passed during Medicare Modernization Act of 2003
Run by private companies/no public option
Donut Hole
Original design of Part D created gap for prescription drug coverage
Catastrophic coverage threshold- Once initial limit is reached, beneficiary pays full cost until out-of-pocket costs reach a certain amount ($4750)
*Eliminated w/ recent policy changes
Medicare Coverage Limitations
1) high deductibles & cost sharing
2) no limit of out of pocket spending (A&B)
3) doesn’t cover long term care, dental, eyes, hearing aids
Medigap Insurance
Sold by private companies to fill gaps in Medicare coverage
Can pay remaining costs (copayments, coinsurance, deductibles), coverage outside of US, services not included in Medicare
Medicare Trust Fund
Hospital insurance trust fund financed through payroll taxes on earnings/income taxes on SS benefits (Part A)
Medicare Drug Provisions of Inflation Reduction Act
Feds can negotiate price of certain drugs in Medicare program- pick 10 drugs a year
Change Medicare Part D- get rid of paying 5% on catastrophic cost after $3250
Flaws:
1) Will take a long time to take effect (gives insurance a long time to figure out how to fight this/new president can roll it back)
2) 10 drugs a year is minimal- pharma can increase costs of drugs not picked
Great Social Policy Divide
Universal benefits vs particularistic benefits
Universal benefits everyone- inherently popular, seen as earned
Programs benefiting select people aren’t popular- seen as indigent (e.g. Medicaid)
Medicaid
Provides health coverage (all kinds of care) for the poor- jointly administered by the states and the federal government (mostly the feds, states cover the rest)
Long term institutional/community care for poor, elderly
Medicaid Eligibility
Low income (defined by each state), mostly children, pregnant women and sometimes parents
Low-income elderly/disabled often dual-eligible for things that Medicare won’t cover
Low-income adults w/o dependents in some states (post-ACA)
Federal Medical Assistance Percentage (FMAP)
Federal share of Medicaid payment varies by state
Formula relies on state per capita income (poorer states pay for less/richer states pay more), states report Medicaid costs & fed gov matches costs for each state- Lowest federal rate is 50%
Feds pay costs, but states manage as they see fit (while following basic requirements)
Poor southern states are hesitant to accept free $ for Medicaid expansion partly bc they benefit from FMAP
FMAP Requirements
Most provide certain benefits to certain populations
Services- physician, hospital, nursing home care
Populations- children and pregnant women
Feds will cover optional services (dental care) for optional groups (poor adults, elderly w/ massive medical costs)
ACA complicates basic requirements
CHIP
Medicaid offshoot for children- includes poor children in families that earn too much for Medicaid popular
Comprehensive coverage- free well child visits, copayments for other services
Refunding sometimes an issue, but quickly resolved bc politicians fear retribution
Medicaid Politics
Popular but contentious
1) Takes up large portion of state budgets
2) Provides for a group not historically seen as deserving (this is changing)
3) Concern that requirements are too prescriptive- can’t act in best interest of the state
4) Doesn’t pay well- many doctors don’t want to see Medicaid patients
Medicaid Waiver
Section 1115 of SS Act allowed federal government to waive provisions of major health programs (e.g. Medicaid)
States apply for them to try projects to improve Medicaid- ideal outcome would be program works and feds could change law nationally to improve Medicaid for everyone
ACA Medicaid Changes
Biggest change to Medicaid- mandated that all states expand Medicaid to 138% of FPL
Feds cover 100% of new costs for first 3 years and 90% moving forward
NFIB v Sebelius
Holding- most of ACA is constitutional except for Medicaid expansion
Deemed coercive under Dole Test- requiring states to expand or risk losing matching funds for former beneficiaries
Results: some states expanded or opposed expansion for political/economic reasons=coverage gap (people in-between get screwed bc not eligible for either program)
Gresham v Azar
Trump HHS pushed a work requirement for Medicaid
- Objective of Medicaid must be prioritized
- HHS waiver approvals are arbitrary/capricious
- Concerns over loss of coverage
Case blocked attempt to roll back Medicaid eligibility- if it leads to less people enrolling, it’s not doing what Medicaid aims to do
Block Grant Argument
Conservative states- federal rules are too limiting, want funds as block grants bc they know better how to distribute funds
Would eliminate waste and allow states to innovate
Opposition- what if a recession hits and block grants are too small? Allows states to make programs more meager
Harris v McRae
Does the Hyde amendment contradict liberty/equal protection as part of the Due Process Clause of the 5th amendment by denying public funding for abortions?
Should states be required to fund the cost of medically necessary abortions when federal reimbursement is unavailable under Title XIX?
Ruling: violates liberty interest, financial need isn’t a suspect class
Essentially gov doesn’t need to remove obstacles to freedom of choice that it didn’t create ) :
Hyde Amendment
Restricts abortion funding under other health programs (Medicaid) funded through HHS
Health Care Provider Examples
1) Hospitals and outpatient centers (e.g. Academic medical centers, community hospitals, safety net providers)
2) Physicians (e.g. primary care, specialists)
3) Other providers (e.g. nurses, PAs, home health aids)