Insurer Types Flashcards
Why is insurance needed?
- mitigate (reduce) the financial risk of the insured (lost income)
- pay premiums now so if large sum is needed later the insurer pays most of it, thereby protecting the insured’s income
Premiums paid in by the many_____
-reduce the financial risk of the few who need it
With insurance involved:
- prices tend to go up
- majority payer (insurer, employer) is not the consumer (patient)
Community rating
- insure a large community
- premiums all go into same pool (no matter how big the company
- small companies paying same premiums as large companies
Experience Rating
- look at experience of each individual company
- each company charged premiums based on their customers only
- premiums per employees higher for smaller companies
- why smaller companies are dropping out of providing insurance for their employees
Experience vs Community Rating
- employer pays lower premiums for healthy employees in Experience rating system (incentive to discriminate)
- employer pay more for Community Rating
Types of Payment plans
- conventional (indemnity)
- PPO (preferred provider org)
- HMO (health maintenance org)
Indemnity Plans
- FFS (fee for service)
- most expensive plans for employers
- has deductible and co-insurance
PPO
- preferred provider organization
- in network: covered 80%
- out of network: covered 60% or less
- has deductible and co-insurance
- has provider panel (must sign contract to be in)
- DFFS primary payment model
- introduced UR
- lower premiums than indemnity plans (but more expensive than HMO)
DFFS
-discounted fee for service
PPO UR
- Utilization review
- decisions made retrospectively based on documentation (provider payed based on doc)
PPO Plan goal
to pass along 20-50% reduction to employers via lower premiums
(20-50% discount from providers)
PPO Co-Insurance: OLD
- PPO paid 80-90% of the discounted rate
- Patient paid 10-20% of what provider billed
PPO Co-Insurance: NOW
- pt pays co-pay, deductible and co-insurance
- PPO pays what is left to meet allowable
PPO Co-insurance: in vs out of network
- in network lower cost (10-20%)
- out of network higher cost (40-50%)
HMO
- health maintenance organization
- more restricted provider network
- gatekeeper for PCP
- capitation for PCP
- co-pays but no deductibles
- pre-authorization by insurer &/or PCP for non-PCP services
- transfer of risk to providers
PCP
-primary care physician
PCP Gatekeeper/Pre-auth
- you can’t do ANYTHING without seeing PCP (even going to ER or PT)
- then insurer must look over it to see if you really need it (i.e. surgery)
PCP paid via:
-capitation (PMPM)
Withholds
- to control physicians
- insurer withholds a % of the full PMPM and puts it at targets (other care providers)
- if goal is met then they get the % back; if not the insurer keeps it
Co-Pays
HMOs eliminated the after-the-fact deductible and co-insurance and replaced both with an up-front co-pay
-make people think about whether they really need care
Staff Model HMO
- insurance company owns ALL entities from insurer to providers
- provides most control over healthcare delivery
- lowest premiums of HMO models
- Ex. Keiser Permanente
Group Model HMO
- HMO contracts with one large multi-specialty physician group for all their patients
- physicians do not work for HMO
- can see pts from other insurers
- premiums higher than staff model
Network HMO
- HMO contracts with numerous physician providers
- physicians do not work for HMO
- physicians can see pts from other insurers
- premiums higher than group model
IPA
Independent Practitioner Association
IPA HMO
- physician practices contract with IPA who then contracts with HMO
- physicians not limited to IPA/HMO pts
- introduces middle man (IPA) that wants cut of premiums
- premiums higher than network HMO
POS HMO
- point of service
- allows pt to seek care outside the HMO physician/hospital network
- but pt’s pay higher co-pays and co-insurance for going out of network
HMO – PPO now
- look similar
- both have:
- -pre-auth
- -deductible
- -co-pay
- -co-insurance
- -moderately sized provider panels
- -UR
CDHP
- consumer directes health plans
- combo of HSA or MSA and a high-deductible health plan
- transfer of risk now to pt
- goal: pt becomes price sensitive
- pt pays out of pocked from HSA/MSA then deductible before insurance kicks in
HSA
-health savings account (like a bank account but can only use for healthcare)
MSA
-Medical savings account
