Government Insurers Flashcards
reasons for government participation in insurance (5)
[SUCCEss]
- social purposes
- unmet insurance needs
- compulsory purchase of insurance
- convenience
- greater efficiency
three levels of government involvement with state and federal examples
- exclusive insurer, e.g. monopolistic state workers comp funds and Social Security
- partner with private insurers, e.g. FAIR plans, windstorm plans, residual auto plans and NFIP, TRIA, crop insurance
- competitor to private insurers, e.g. state workers comp funds and flood insurance
criteria for evaluating government insurance programs (5)
[W/I-SEAN]
- is it welfare or is it insurance?
- does it serve a social purpose?
- is it efficient?
- is it accepted by the public?
- is it necessary?
origin of federal crop insurance
- created in 1938 after the Great Depression and Dust Bowl to protect farmers against low yields for certain crops in certain regions
- unsuccessful due to high costs and low participation
crop insurance protections (2)
- yields fall below a certain level
* prices fall below a certain level
mechanisms to reduce risk and adverse selection in crop insurance (3)
- must elect to purchase coverage prior to planting
- must insure all fields growing a given crop in the same county
- not eligible for federal disaster relief programs for crop loss if insurance is not purchased
describe public-private partnership of crop insurance
- Federal Risk Management Agency (RMA) sets rates
- private insurers market, write, and service crop insurance policies
- government reimburses private insurers for expenses
impacts of subsidization of crop insurance (3)
- farmers purchase more coverage than they would if paying full premium
- better protection for farmers may reduce requests for disaster assistance
- costs are increased for taxpayers
arguments for and against federal crop insurance
- for: it is necessary to bring stability to a volatile sector of the economy
- against: programs encourage overproduction and farming in riskier areas
three federal workers comp insurance programs
- Federal Employee Compensation Act (FECA) - provides benefits to federal employees, excluding military
- Longshore and Harbor Workers’ Compensation Act - employers required to provide workers comp for longshore, harbor, and maritime workers injured while working on or near navigable water in the U.S.; necessary since sometimes no state coverage applies
- Black Lung Benefits Act (BLBA) - benefits provided to miners totally disabled from black lung disease, paid through a federal excise tax with one-time contributions from Congress
types of residual market mechanisms for workers comp (4)
- state funds
- assigned risk plans
- reinsurance pools
- JUAs
interaction between workers comp and Medicare
- ongoing concerns about overlap
* workers comp and liability insurance are primary to Medicare
describe conditional payment by Medicare
- eligibility concerns can delay payments
- Medicare makes conditional payments to providers
- Medicare must be reimbursed later if a primary insurer is determined
describe Medicare Set-Aside Allocations (MSAs)
- parties in a workers comp settlement are required to set aside money for medical expenses
- MSA should be sufficient to offer primary coverage when the claimant is Medicare eligible
initial problems with MSA implementation (3)
- Medicare administrators did not know if parties were collecting workers comp or liability payments
- parties had little incentive to agree to MSAs
- aggressive collections did not exist
2001 Center for Medicare and Medicaid Services (CMS) guidelines for MSAs (2)
- Medicare will refuse payment if MSAs are not submitted or not approved
- Medicare will become more aggressive about seeking reimbursement for past conditional payments
Medicare, Medicaid, and SCHIP Extension Act (MMSEA)
(2007)
requires insurers to determine Medicare status of claimants and report claim data to CMS
