Lecture 3: Health Insurance Flashcards
What is the primary means of healthcare financing in the US?
Employment-based health insurance (World War II)
What was the 1st insurance plan to cover physician services?
Blue Shield Plan
What things planted the idea that health insurance is needed in 1900s?
- Advancements in medical treatments and hospital care costs are rising and it become difficult for people to preduct future needs and costs for health care
- Great Depression led to economic instability of hospitals; patients lost income if sick and accumulated health care debt
When there were no programs for elderly, poor and unemployed person. What public health insurance programs were created in 1965?
- Medicare
- Medicaid
What is the primary way that people in the United States receive healthcare insurance?
Employer
Differentiate between private and public health insurance. What are examples of each?
- Private health insurance: primarily employer based, self-insured via an individual health insurance policy
- Public Health Insurance: recieve goverment funding (examples include Medicare, Medicaid, SCHIP, VA/TRICARE)
Define the 4 principles of insurance (why do we have insure companies? what are there characteristics?
- Difficult to predict risk for individuals
- Easier to look at patterns and trends for groups of people and predict risk more accurately
- Insurance helps to shift risk from an individual to a group as resources are pooled
- The insured group shares in any losses
Define moral hazard
Consumer behavior
refer to people with medical insurance getting more medical care, aside from whether they need it or not
If you have insurance, you are more likely to use healthcare good and services than if you had to pay price out-of-pocket
Define provider induced demand
- healthcare provider (physician) has the ability to create demand for healthcare goods and services
- More prominent in Fee-for-Serice reimbursement models
Define adverse selection
People in poor health are more likely to enroll in insurance and use healthcare services; if people are very sick, more likely to get health insurance
What do moral hazard and provider-induced demand result in?
- Inefficient and inappropriate use of healthcare goods and services
- Wasted healthcare resources
- Increased healthcare expenditures (increasing NHE because patients are using more resources and that increases the demand for those resources)
***both have effects on healthcare services utilization and cost
How can having patient cost sharing (e.g., premiums, deductible, copay, etc.,) impact moral
hazard?
- patient cost sharing decreases moral hazard
What is cost sharing?
A term used to describe the practice of dividing the cost of health care services between the patient and the insurance plan. For example, if a plan pays 80% of the cost of a service, then the patient pays the remaining 20% of the cost.
**patients need skin in the game: insurance premiums, deductible, co-insurance, and copays
What does cost-sharing depend on?
- plan type
- type of service
- in-network vs. out of network care
Does it usually cost the patient more or less if they get care outside of a provider network?
Costs more
*Patients have lower cost sharing if receive services in “preferred provider network”= get discounts
