Health care Flashcards
Spending
high and rising, 4.1 trillion dollars, 69% of health care is financed by insurance, public insurance makes up the rest
Problems
prices and quantity of services provided increase, 31 million americans had neither public or private health insurance and had a lack of access to health care services.
Global Comparisons/Results
US tops the chart when it comes to healthcare spending, 20% of national income was spent on healthcare, whereas only 13% was spent in less developed countries. U.S. health care expenditures are the highest in the world absolutely, as a proportion of GDP, and on a per capita basis. Yet many nations have lower rates of maternal and infant mortality and longer life expectancies.
why the rapid rise in costs?
higher health insurance premiums to employers and higher out of pocket costs to workers
Peculiarities if healthcare
ethical and equity considerations ( ethical questions intervene in markets when decisions involve te quality of life or literally life or death. Society regards healthcare as a right or entitlement)
Asymmetric information
healthcare buyers typically have no understanding of complex diagnostic and treatment procedures, but the physicians who are the sellers of those procedures have detailed information.
Positive externalities
spillover benefits, getting vaccinated to keep others from getting ill
third party payment insurance
healthcare consumers pay lower out of pocket prices. These lower prices result in people over consuming health care services
Health care demand
rising income and normal good, elasticity,
aging population and unhealthy lifestyle,
role of doctors,
supplier-induced demand (fee for the service),
defensive medicine (recommend more tests and procedures that are not warranted to protect themselves against malpractice suits)
medical ethics (doctors are committed to a standard of care to serve patients, means using costly medical procedures that may benefit their patients only slightly
Healthcare supply
supply of physicians, slow productivity growth, changes in medical technology
Role of insurance
protects you against the huge monetary losses that can result from hazards, paying a small cost in exchange for obtaining protection against uncertain but potentially larger costs
Supply factors
the supply of healthcare services has increased but more slowly than the demand. supply of physicians, slow productivity growth, changes in medical technology
ACA Goal
extension of health insurance coverage to every american
ACA Provisions
Preexisting conditions, caps and drops:
illegal for insurance companies to deny coverage to anyone on the basis of a preexisting medical condition
Increased the amount of money that insurance companies had to pay out to stop them from imposing annual or lifetime expenditure caps
Prevent insurance companies from dropping policy holders just because they’ve developed a costly illness.
Employer mandate: every firm with 50 or more employees must either purchase health insurance for the full time employees or pay a fine of $2000 per employee
Personal mandate: individuals had to purchase health insurance for themselves and their dependents unless they were already covered by government insurance or employer provided insurance, anyone refusing would pay a fine of $695 per uninsured family member
Covering the poor: 1. Employer mandate was used to force employers to provide health insurance, 2. medicaid system to cover anyone whos income was lower than 133% of the poverty level. 3. ACA subsidized the purchase price of health insurance for those who had to buy their own health insurance to comply with the personal mandate.
Insurance exchanges: government regulated markets for health insurance in which individuals seeking to purchase health insurance to comply with the personal mandate of the PPACA will be able to shop among insurance policies approved by regulators
Other provisions: adult children covered on their parents insurance until they are 26, encouragement of preventative care, 80% or more of premiums were spent on improving healthcare
Taxes
increased medicare payroll tax for people earning more than $200,00 per year
Increase in the capita gains tax for people earning more than $200,00 per year
40% tax payable by employers on and employer-provided insurance policy
2.9% excise tax applied to everything sold by medical device manufacturers
10% tax on indoor tanning
