Insurer Types

Question 1

Why is insurance needed?

Answer 1

• 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

Question 2

Premiums paid in by the many_____

Answer 2

-reduce the financial risk of the few who need it

Question 3

With insurance involved:

Answer 3

• prices tend to go up

- majority payer (insurer, employer) is not the consumer (patient)

Question 4

Community rating

Answer 4

• insure a large community
• premiums all go into same pool (no matter how big the company
• small companies paying same premiums as large companies

Question 5

Experience Rating

Answer 5

• 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

Question 6

Experience vs Community Rating

Answer 6

• employer pays lower premiums for healthy employees in Experience rating system (incentive to discriminate)
• employer pay more for Community Rating

Question 7

Types of Payment plans

Answer 7

• conventional (indemnity)
• PPO (preferred provider org)
• HMO (health maintenance org)

Question 8

Indemnity Plans

Answer 8

• FFS (fee for service)
• most expensive plans for employers
• has deductible and co-insurance

Question 9

PPO

Answer 9

• 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)

Question 10

DFFS

Answer 10

-discounted fee for service

Question 11

PPO UR

Answer 11

• Utilization review

- decisions made retrospectively based on documentation (provider payed based on doc)

Question 12

PPO Plan goal

Answer 12

to pass along 20-50% reduction to employers via lower premiums

(20-50% discount from providers)

Question 13

PPO Co-Insurance: OLD

Answer 13

• PPO paid 80-90% of the discounted rate

- Patient paid 10-20% of what provider billed

Question 14

PPO Co-Insurance: NOW

Answer 14

• pt pays co-pay, deductible and co-insurance

- PPO pays what is left to meet allowable

Question 15

PPO Co-insurance: in vs out of network

Answer 15

• in network lower cost (10-20%)

- out of network higher cost (40-50%)

Question 16

HMO

Answer 16

• 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

Question 17

PCP

Answer 17

-primary care physician

Question 18

PCP Gatekeeper/Pre-auth

Answer 18

• 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)

Question 19

PCP paid via:

Answer 19

-capitation (PMPM)

Question 20

Withholds

Answer 20

• 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

Question 21

Co-Pays

Answer 21

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

Question 22

Staff Model HMO

Answer 22

• insurance company owns ALL entities from insurer to providers
• provides most control over healthcare delivery
• lowest premiums of HMO models
• Ex. Keiser Permanente

Question 23

Group Model HMO

Answer 23

• 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

Question 24

Network HMO

Answer 24

• HMO contracts with numerous physician providers
• physicians do not work for HMO
• physicians can see pts from other insurers
• premiums higher than group model

Question 25

IPA

Answer 25

Independent Practitioner Association

Question 26

IPA HMO

Answer 26

• 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

Question 27

POS HMO

Answer 27

• 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

Question 28

HMO – PPO now

Answer 28

• look similar
• both have:
• -pre-auth
• -deductible
• -co-pay
• -co-insurance
• -moderately sized provider panels
• -UR

Question 29

CDHP

Answer 29

• 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

Question 30

HSA

Answer 30

-health savings account (like a bank account but can only use for healthcare)

Question 31

MSA

Answer 31

-Medical savings account