Health Insurance and Health Care Cost Management (Individual and Group) (Slides) Flashcards
Fee-For-Service and PPO Plans Coverage
Coverage pays for:
- Hospital expenses, typically based on a per day maximum cost
- nursing care
- X-rays
- Lab tests - Surgical expenses
- Non-surgical physician expenses
Patients pay a coinsurance or copayment amount after the deductible has been met
- Most common arrangement is an 80/20 coinsurance provision (20% paid by patient)
FFS PPO
4 Types of Health Insurance Policies
- Fee for Service Plans (also called Indemnity Plans)
- Visit the doctor or hospital of their choice
- An option is a Preferred Provider Organization (PPO) or network for reduced cost
- Managed Care Plans
- HMO Health Maintenance Organization: coordinates and provides care through a network of physicians and hospitals in a particular geographic or service area
- EPO Exclusive Provider Organization: services are only covered if a client uses doctors, specialists, or hospitals in the plan’s network (except in an emergency). No referral by PCP required.
- Point of Service Plans: combines elements of a Fee-for-Service plans with aspects of a managed care plan
Consumer-Driven Health Plans
- HDHP High Deductible Health Plan: client pays a deductible of at least $1,400 (individually) or $2,800 (family)
- the annual out-of-pocket amount (including deductibles and copayments) for 2021 cannot exceed $7,000 (individually) or $14,000 (family) annual is 5x the deductible
- HSA Health Savings Account is generally available to those who enroll in an HDHP and allow clients to pay for current health expenses and save for future qualified medical expenses on a pretax basis. Contributions limited to $3600 for individual and $7,200 for family
- HRA Health Reimbursement Arrangement (also called Personal Care Account) are available to enrollees in HDHPs who are ineligible for an HSA
- HSA and HCFSA (Health Care Flexible Spending Account) funds may be used to pay dental and vision costs, long-term care premiums and health care premiums, but cannot be used for elective cosmetic surgery or over-the-counter-drugs
General Purpose Healthcare Flexible Spending Account (HCFSA)
Set up through an employer to pay for many out-of-pocket medical expenses with tax-free dollars
- Deductibles
- Copayments
- Qualified prescription drugs
- Medical devices
Max contribution of $2750 / year
- Funds not spent at the end of the year cannot be used the following year
Is a Section 125 plan
- can be paid with pre-tax dollars
Cafeteria Plan
A separate written plan maintained by an employer for employees that means required of IRS Section 125
- allows employees the opportunity to receive certain benefits on a pretax basis
Participants must be permitted to choose from at least one taxable benefit (such as cash) and one qualified benefit
Qualified benefits include:
- Accident and health benefits
- Adoption assistance
- Dependent care assistance
- Group term life insurance coverage
- HSAs, including distributions to pay long-term care services
Contributions are not considered wages for IRS purposes
Point of Service Plans
Combines elements of a Fee-for-Service plans with aspects of a managed care plan
- Pay less fees when using healthcare providers that belong to the plan’s network
- Must first obtain a referral from their primary care doctor to see a specialist
Managed Care Plans
HMO Health Maintenance Organization: coordinates and provides care through a network of physicians and hospitals in a particular geographic or service area
- out of network care is not covered unless an emergency (or reciprocity arrangement)
No deductible or coinsurance for in-hospital care, as long as it’s in the network
Charge a copayment when service is provided
PCP Primary Care Provider
- Provides general medical care
- Required to give authorization / referral to see other providers
EPO Exclusive Provider Organization: services are only covered if a client uses doctors, specialists, or hospitals in the plan’s network (except in an emergency)
General-Purpose HCFSA (Health Care Flexible Spending Account)
An arrangement a Client sets up through the employer to pay for many out-of-pocket medical expenses with tax-free dollars.
- these expenses include
- insurance copayments and deductibles
- qualified prescription drugs, insulin
- medical devices.
Cafeteria Plan (Section 125 Plan)
Section 125 plan: an employer-sponsored plan that allows employees to purchase flexible benefits
- This plan qualifies under IRS Code Section 125 that allows employee contributions to be met with pretax dollars
- Nearly all HCFSA accounts are a benefit
- Allow a participant to choose one or more of the following benefits without being subject to the principles of Constructive Receipt
1. Adoption assistance
2. Dependent care assistance
3. Group-term life insurance coverage
4. Health Savings Accounts (including distributions to pay long-term care services)
VEBA Voluntary Employee’s Beneficiary Associations
A mutual association of employees providing certain specified benefits to its members or their designation beneficiaries
- May be funded by the employees or their employer
- VEBAs have existed in the tax law since the Revenue Act of 1928, although today these trusts are used primarily by states and municipalities
COBRA Consolidated Omnibus Budget Reconciliation Act
Gives workers and their family who lost their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances:
- Job loss (voluntary or involuntary)
- Reduction in hours worked
- Transition between jobs
- Death
- Divorce
- Other life events
Qualified individual may be required to pay the entire premium for coverage up to 102% of the cost to the plan
The Affordable Care Act
Mandates that everyone living in the United States must provide proof of coverage for minimum essential health expenses, unless they are exempt from the Act
- Those who do not have health coverage must pay a penalty when filing their federal income tax return
Covers children up to 26 years old
4 ACA Marketplace Plans
- Bronze: lowest month premiums, but the deductible is higher and the insured person pays more when they get care
- Silver: higher monthly premiums than Bronze, but the deductible is lower and the plan covers more of the costs
- Gold: higher premiums than Silver, “
- Platinum: highest monthly premium, but the deductible is very low and the plans pays nearly all costs of care
All plans offered in the Marketplace cover the following 10 “essential” health benefits:13
Ambulatory patient services (outpatient care you get without being admitted to a hospital)
Emergency services
Hospitalization (like surgery and overnight stays)
Pregnancy, maternity, and newborn care (both before and after birth)
Mental health and substance use disorder services, including behavioral health treatment (this includes counseling and psychotherapy)
Prescription drugs
Rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills)
Laboratory services
Preventive and wellness services and chronic disease management
Pediatric services, including oral and vision care (but adult dental and vision coverage aren’t essential health benefits)
Birth control coverage
Breastfeeding coverage
States are allowed to mandate additional coverage options, including:
Dental coverage
Vision coverage
Medical management programs (e.g., for specific needs like weight management, back pain, and diabetes)
Who Medicare is For, and the 3 Parts
People 65 or older
People under 65 with certain disabilities
Everyone with end-stage renal disease (permanent kidney failure requiring dialysis or a kidney transplant)
- Part A Hospital insurance
- Paid for through payroll taxes whil working - Part B Medical insurance
- Paid through monthly premium - Part B Prescription Drug Coverage
Medicare / Medicaid Part B Deductible and Coinsurance
Medicaid recipients first pay $148.50 per year as a Part B deductible
After the deductible is met, they typically pay 20% of Medicare approved amount for:
- Most doctor services (including most doctor services while you’re a hospital inpatient)
- Outpatient therapy
- Durable medical equipment
Medicare Advantage Plans
A health plan offered by a private company that contracts with Medicare to provide a patient with all Part A and Part B benefits, including:
- HMOs
- PPOs
- Private Fee-for-Service Plans
- Special Needs Plans
- Medicare Medical Savings Account Plans
