Health Care Reform Flashcards
What comprises US health insurance?
Job-based private insurance (employed)
Individual private insurance (typically small-employer, unemployed)
Medicare (over 65 years old or disabled)
Medicaid (poor)
VA insurance (military veterans)
Roughly how many Americans do not have health insurance
30 million
Describe what private insurance is
Protection against big medical expenses
Utilizes risk pooling: healthy subsidize sick
Cost of policy typically shared by employer and employee
Insurance company helps cover health expenses incurred by enrollees
Define premium
Cost of the policy
Define deductible
Out-of-pocket amount that patient must pay before insurance kicks in
Define co-pay
Upfront fixed amount to access certain health services (ex: $40 co-pay for office visit, $20 co-pay for prescription meds)
Define co-insurance
Percent patient pays after deductible is met (ex: 80/20 policy: insurance pays 80%, patient pays 20%)
What are some private insurance models?
Fee-for-service
HMO’s
HSA + high-deductible plan
Define fee-for-service (private insurance)
Is the traditional model
Providers bill insurance for each individual service (insurance company reviews each item, decides whether to authorize payment)
Is expensive, administratively burdensome (providers/hospitals have incentive to deliver more procedures, tests, services; difficult for insurance company to limit costs)
Define HMO
HMO = Health Maintenance Organization
“Managed care”: a cost containment model
Requires use of in-network providers, hospitals, labs
In-network providers (employees or contract with HMO at a discount)
Primary providers as gatekeepers (control specialist referrals, labs, imaging AKA control excessive cost spending)
Define High-deductible plan + HSA
Is the current trend
High-deductible plan: less expensive, shifts cost to the individual, aims to reduce utilization, barrier to care
Health savings accounts (HSA): individual makes pre-tax contribution to a personal health account (AKA still comes from paycheck), can be used toward out-of-pocket expenses not covered by insurance (deductibles, co-pays)
Problems with job-based insurance for employers
Huge cost burden
Increasing costs limit growth, hiring and wages
Problems with job-based insurance for employees
“Job lock”: can’t leave dead-end job because you need the insurance
If you lose your job, you lose your insurance
Name some types of public US health insurance
Medicare, Medicaid, Veteran Administration
Define Medicare
Health insurance financed by federal government (no state funding only federal)
Enacted in 1965
Eligibility: 65 years old and older, permanently disabled, chronic renal disease
Parts A, B, C, D
Define Medicare Part A
All Americans enrolled at 65
Covered services: hospitalization, skilled nursing facility up to 100 days, home health care, hospice care
Financing: payroll tax (employers and employees 1.45% each (3% total)), patient deductibles, copays
Define Medicare Part B
Optional extra coverage for additional premium ($165/month in 2023)
Covered services: provider services, outpatient tests, medical equipment, PT/OT
Define Medicare Part C
“Medicare Advantage”
Individual pays additional premium to enroll in private HMO (a secondary insurance to Medicare)
Government pays HMO a lump sum per beneficiary per month; HMO then administers the insurance
More costly to government than traditional Medicare
Define Medicare Part D
Prescription drug benefit
Enacted 2003
Pay additional premium
Administered by private insurance
Government not allowed to negotiate prices with drug companies (disadvantage to expensive drugs that patients may need)
Define Medicaid
Health insurance for the poor, enacted 1965: low income families with children, poor pregnant women, disabled, blind
Expanded coverage under ACA (in states that have opted in)
Federal program, administered by states (financing shared between federal and state governments)
Minnesota’s program: “Medical Assistance”
Medicaid problems?
Low reimbursement rates (<70% of Medicare rates)
Many providers won’t take Medicaid patients –> restricted access to care –> patients often go to ED’s, county hospitals, community clinics
Cost of US healthcare/health insurance?
17.7% of GDP (2x as much as other democracies)
Unaffordable for many (average family premium: $22,400)
___% of bankruptcies are related to medical bankruptcies
67%
___ people in America are saddled with health care debt
100 million
What drives healthcare/health insurance costs?
Technology, new drugs (not always cost effective, companies generate consumer demand)
Chronic disease (increased prevalence, patients living longer)
Demographics (Baby boomers, increasing life spans)
Administrative waste (31% of health spending, 1500 different private insurance companies, no central coordination)
Defensive medicine (ordering extra diagnostic testing in the event that provider gets sued (however this only attributes to 3% of overall healthcare spending))
Higher prices
Quality of US healthcare/health insurance?
Life expectancy: 28th/193
Infant mortality: 41st
Overall: 37th
Worse outcomes than almost any other advanced democracy
What is the most common reason for being uninsured among uninsured non-elderly people?
Coverage is not affordable
Define underinsurance
Insured, but inadequately
Unaffordable high deductibles, copays
Avoidance of necessary care
Illness can bring financial ruin
On average, how many hours per week do American healthcare providers typically spend on pre-authorization and paperwork?
21 hours/week per practice
What was the Affordable Care Act?
Introduced/enacted in 2010
Expands health coverage to more Americans (20 million more, but 30 million still uninsured)
Reforms private insurance practices
Complex and controversial
What were some private health insurance reforms as a result of the ACA?
Insurance companies can no longer deny coverage for pre-existing conditions (and can’t charge higher premiums)
Preventive care to be covered at no extra charge
Young adults can stay on parents’ policy until age 26
What is the “individual mandate”?
Requirement to buy health insurance–or pay a fine
Rationale: effective risk pooling requires everyone to participate (young and old, healthy and sick)
Highly controversial
Can the federal govt. require citizen to buy a product? Supreme Court ruled “yes” at that time
Repealed by 2017 GOP tax bill
What are state insurance exchanges?
A state marketplace where private insurance companies offer competing plans
Minnesota’s exchange: MNsure (choice of bronze, silver, gold, platinum plans; differing price levels reflect differing deductibles)
Subsidies for those earning 133-400% Federal Poverty Level
Describe Medicaid expansion
States encouraged to expand Medicaid coverage to all those below 133% federal poverty level
Fed govt pays 100% for 3 years, then at least 90% thereafter
Optional, per Supreme Court
Only 39 states have opted in so far
What is employer mandate?
Large businesses (>50 employees) must provide employee coverage or pay penalty
What were 2 other ACA provisions?
Increased Medicare/Medicaid payments to primary care providers
Funding for community health centers that serve low-income populations
ACA pros
Millions more insured
Private insurance reform
Strengthens primary care
Attempts to address health disparities
ACA cons
Not universal health care
Expensive
Builds on inefficient, profit-driven system
Insurance industry stays in control and expands
Cost explosion continues
Underinsurance remains
Define universal healthcare
Access for all to health care
Doesn’t specify how to get there
Define socialized medicine
Publicly-financed, publicly owned (ex: Great Britain)
Define single-payer system
Publicly-financed, privately-delivered (ex: Canada)
Describe some features of single-payer system
Single unified plan that covers everyone, regardless of pre-existing conditions, financial means, job status
Financed by streamlined, single public fund (eliminates private insurance)
Delivery of health care remains private
Name some strengths of the single-payer system
Guaranteed coverage for all (continuous, de-linked from employment; free choice of providers)
Major cost savings (slashes administrative waste, duplication; prohibits profit taking; negotiating clout (drugs and medical supplies)
What is the Minnesota Health Plan?
Single payer bill for Minnesota
Covers all Minnesotans
All medically necessary services, including dental care
What is the Lewin Group Report?
Economic model of MN single-payer
Financing: employer and employee payroll tax; eliminates deductibles, co-insurance, most copays
