PHAR 738 Final Exam (Comprehensive) Flashcards
How much does the United States spend on healthcare? What is the insurance type breakdown? Medical expenditures breakdown?
The United States currently spends approximately 17% of its national gross domestic product (GDP) on health care (growing from 5.2% in 1960)
Private health insurance (33%), Medicare (20%), Medicaid (15%), Out of Pocket (12%), Other Third Party Payers and Programs (7%), Other government insurance (4%), Public health activity (3%)
Hospital care (31%), Physician/Clinical Services (20%), Prescription Drugs (10%), Health Insurance Administration Costs (7%), Nursing Homes and Long-Term Care (6%), Dental (4%), Medical Products (3%), Public Health Activity (3%), Home Health Care (3%), Research (2%), Other 11%)
Describe the Iron Triangle
A triple aim to optimize health system performance:
>Improving the patience experience of care (quality)
>Improving the health of populations (access)
>Reducing the per capita cost of healthcare (cost)
Outline the basic history of health insurance
> Accident insurance for railroad or steamboat travel during civil war
Accidental plans led to more expansive plans in the later 1800s
Early supplementary income plans
How was health insurance founded in America?
> Baylor Hospital Partnership in 1929 (teachers paid preset amount for number of hospital days)
American Hospital Association encourage hospitals to develop similar plans
Kaiser shipyard began supplying employee insurance during WWII
When as Medicare/Medicaid Passed?
1965
Describe the HMO act
Health Maintenance Organization Act of 1975
> requires employers with more than 25 employees and an offered health plan to include 1 HMO
Which act expanded psychiatric coverage?
Mental Health Parity Act (1996)
Describe the Health Insurance Portability and Accountability Act
1996
> Expanded was to obtain individual health insurance
created framework for federal government to collaborate with state governments to regulate insurance markets
Difference between subscriber and dependents
Subscriber purchases the policy; Dependent refers to any other members of the same policy
What is a community rating?
When all subscribers pay the same monthly premium
Describe medical underwriting
Charging different monthly premiums based on how much medical care an individual is likely to require
What forms of cost-sharing are there?
Deductible - specified amount a patient must pay in a given time period before the insurer begins to pay
Copayment - requires patients to pay a specified dollar amount each time a service is received
Coinsurance - required percentage of the cost of covered services that the patient must pay
What is the out-of-pocket max?
Out-of-Pocket Max = deductibles + copayments + coinsurances
What are some potential risk management problems?
Catastrophic Hazard – widespread, catastrophic event that would exceed a company’s ability to pay
Adverse selection – low risk individuals less likely to purchase insurance than high risk
Incentives to create losses – individuals gain from an apparent loss (i.e. physicians making more money from a fee-for-service plan)
Supplier-induced Demand – demand does not come solely from provider
Primary Agent Problem – when one person or entity is able to make decision on behalf of or that impact another person
Moral Hazard – overconsumption; when the price of a product or service decreases, the quantity demanded increases
What was concluded from the Rand Healthcare Experiment?
Participants with cost sharing model made fewer medical trips
Once patients entered the health care system, cost sharing only modestly affected the intensity or cost of an episode of care
No adverse health effects but poorest and sickest patients had better health outcomes under a free plan
Participants in cost sharing plans worries less about their health and had fewer restricted activity days
What is the breakdown of insurance coverage, by type, in the United States?
Employer Sponsored (57%)
Medicaid/Other Public (19%)
Uninsured (19%)
Private Non-group (5%)
What does the employer determine in employer sponsored insurance models?
Coverage benefits, premiums, any cost sharing components, who is eligible for coverage
What are the two types of Employer group health plans (EGHP)?
Fully-insured - the insurance company assumes risks, acts as the payer and gets any profits; this model is regulated by the state
Self-Insured - employer is the payer, assumes risks and the company gets any profits; regulated by the federal government
Besides Medicaid, list other public programs
State Children’s Health Insurance Program (S-CHIP and CHIP), Indian Health Services for Native Americans and Alaskan Natives, Veteran Health Administration, TRICARE for current members of the military as well as some retirees and their dependents
Describe COBRA
Consolidated Omnibus Budget Reconciliation Act - allows individuals to keep their EGHP for up to 18 months post-employment, making the subscriber responsible for full monthly premium
Describe Staff Model HMO
> Characterized by direct ownership of healthcare facilities and employment of physicians under a fixed salary
PROS - control over physicians actions with little risk and competition to physicians, patients also have access to everything
CONS - extremely costly for organization with less independence for physicians, physicians risk termination based on performance and patients have limited choices
Describe Group Model HMO
> Contracts with physician groups who offer services to HMO patients on a capitated basis
Same pros and cons as staff model HMO but not quite as expensive and organizations have a little less control over physicians
Kaiser Permanente is an example
Describe Network Model HMO
> Contracts with physician groups who non-exclusively offer services to HMO patients on capitated basis
Less costly with limited control over physicians
Physicians bear more risk and competition for patients is higher
Describe Independent Practice Association Model HMO
> Physicians form a separate legal organization contract with an HMO at a negotiated fee
patients have options, physicians have independence and bargaining power and the organization is typically low cost
Describe Preferred Provider Organization (PPO)
> Affiliated physicians that seek contracts with insurance plans
those in a PPO can see any provider but have an incentive to stay within network
physicians accept a discounted fee-for-service in exchange for high patient volume and quick claims payment
Describe Point of Service
> Combination of HMO and PPO
HMO characteristics - required to choose a primary care physician within a network
PPO characteristics - the provider may make referrals outside of the network, but those referrals will receive lesser compensation
The patient must fill out reimbursement paperwork if they go out of network
What are the three types of consumer driven health plans?
Health savings account (HSA)
Flexible spending accounts (FSA)
Health reimbursement accounts (HRA)
*Individuals must also enroll in a high deductible plan
Describe the key points of the Affordable Care Act
> All individuals must get health insurance or face a penalty
> Individuals will have access to health insurance (Young adults may stay on parents plan until 26, Insurers can no longer discriminate on pre-existing conditions or project health status, Policies no longer have annual policy limits)
> Employers (Small employers (under 50 employees) will receive tax credits if they offer insurance and will be allowed to purchase insurance through the exchanges, Large employers (51-200) are required to offer affordable health insurance options, Very large employers must automatically enroll employees in the company’s health insurance plan, but employees have the choice to opt out)
Who handles enrollment for Medicare?
Enrollment is handled by Social Security or by the Railroad Retirement Board (RRB)
Who handles administration of Medicare?
Centers for Medicare and Medicaid Services (CMS)
What is the deductible period for Medicare Part A?
60 days ($1260 in 2015)
What forms of Medicare should never be taken from a Social Security check?
Private insurance (Advantage or Part C) or Medigap
Who is automatically enrolled in Part A?
Those already receiving Social Security benefits or Railroad Retirement benefits
Most disabled are automatically enrolled
Describe automatic Medicare Part A enrollment for disabled?
> Enrolled after receiving 24 months of cash SS benefits
No waiting period for those with ALS or early onset Alzheimer’s
Under 65 with ESRD must apply at SSA
When is the Initial Enrollment Period for Part A
7 month period with the 4th month being the month you turn 65
*If your birthday is on the first day of a month, you may use the previous month as the enrollment period if you wish
For those with SSA disability, there is a 24 month waiting period starting on the day the first disability application was submitted (assuming it gets approved)
When are the effective dates for Part A enrollment?
Three months before birthday month - effective date is birthday month
Birthday month - month following birthday month
Month after birthday month - 2 months after birthday month
(stops increasing after +3 months)
What general services are provided for those with Part A?
Hospital inpatient services, Skilled nursing facility care, home health care (must be ordered by prescriber), hospice and blood
What hospital inpatient care services does Part A cover?
Semi-private room, meals, general nursing, other hospital services and supplies
How long are you covered in a hospital under Part A?
Days 1-60 with no copays (1260 deductible)
61-90 days: 315$ a day
91-150 days: 630$ a day
After 150 days you pay everything
What requires someone for an SNF under part A? How do you get by this?
3 consecutive midnights in hospital inpatient care.
Some advantage plans will waive this as well as the observational status/inpatient rule.
Observational status rule is a Part B benefit.
What does SNF coverage include under Part A?
Semi-private room,. meals, skilled nursing care, physical, occupational and speech therapy, medical social services, medications and medical supplies/equipment, Ambulance transport if necessary, dietary counseling
How long are covered in SNF under Part A?
First 20 days is $0
Days 21-100: $157 dollars a day
You pay everything after 100 days
What is covered under Part A for home health care?
Therapy, some health aide services, part-time skilled nursing care, 20% co-insurance for durable medical equipment from Medicare approved provider
What are the Part A conditions for home health care?
Doctor must make a plan for home health care, must be in need of specific skilled services, must be homebound and home health agency must be Medicare-approved
Coverage should continue if the patient’s condition would deteriorate if treatment was ended
What is covered under Part A for hospice care?
Two 90 day periods and unlimited 60 day periods (must have certification from physician and hospice provider must be approved by Medicare)
Unlimited respite care in Medicare certified facility for 5 days at a time.
Medical equipment supplies, drugs for pain relief and symptom control, home health aide and homemaker services, social worker services, dietary and grief counseling
How much does an individual pay for Part A hospice care?
Up to 5 dollars for prescription drugs and 5% for respite care.
What isn’t covered under Part A?
Long term care, vision and dental, hearing aids, private-duty nursing, non-prescription drugs and most nutritional supplements
What does a person pay for Part B?
104.90 premium, $147 yearly deductible and 20% co-insurance
General enrollment information for Part B
IEP - first 7 month period when first eligible for Medicare
GEP - January through March of each year with Part B going into effect July 1
Permanent 10% premium increase with each 12 months of delay
SEP - up to 8 months after active work or EGHP ends (whatever comes first)
Describe Social Security Hold Harmless Benefit
The part B premium cannot cause a decrease in SS pension relative to the previous year. If the social security increase does not cover the increased Part B premium, the increase in the Part B premium wont have to be paid
Only Part B premium NOT coming from SS pension will increase (those new to social security, Medicaid, IRMAA and those paying premium from checking accounts)
What is the late enrollment period?
Starts with 7th month of the IEP and goes to March of the current GEP
Describe IRMAA
Income Related Monthly Adjusted Amount
> Premiums are based on income with no marriage penalty
Part D and Part B IRMAAs
Based on taxes from 2 years ago
How did the Health Reform Law impact Part B?
Froze IRMAA Part B threshold until 2019, improved prevention by covering only proven preventative measures and by eliminating cost sharing for these measures in both Medicare and Medicaid, required qualified health plans to provide at a minimum coverage without cost and provided access to a comprehensive health risk assessment and creation of a personalized health plan
What are some examples of instances in which assignment must be accepted?
Medicare part-B prescription drugs, ambulance providers
What does Part B help pay for?
Doctors services, outpatient and medical and surgical services and supplies, diagnostics tests, outpatient therapy and surgery, outpatient mental health services, some preventative health care, physical, occupational and speech therapies, some home therapy and a few other medical services
What does Part B cover for preventative health care?
Welcome to Medicare extended visit, annual visits, smoking cessation clinic, some shots (flu, pneumococcal and Hep B), and specific screenings
What are the physical, occupational and speech therapy limits for Part B?
$1940 cap for Jan 1 - March 31 unless exception has been approved.
Medicare must approve maintenance of patient’s health.
What are some of the ‘other’ medical services that Part B provides?
Appropriate clinical lab test, home health services, approved durable medical equipment, blood, some diabetes supplies and ambulance services if medically necessary
What isn’t covered under Part B?
Long-term care, dental care and dentures, outpatient prescription drugs, hearing aids/exams for fitting hearing aids, routine vision and eyeglasses, routine annual physical exams and lab tests, travel outside of the US, alternative care and medical transport services
If you are on an EGHP and Medicare, who pays first?
Medicare if employer has under 20 employees (employer WILL assume you are enrolled in Medicare)
How many standard Medigap plans are there and what are they?
10: A, B, C, D, F, G, K, L, M, N
Which plans are companies required to sell?
A and F (F is the cadillac of plans)
Who regulates these Medigap plans?
The state insurance commissions (not CMS)
How does billing work with Medigap policies?
Provider bills Medicare who then notifies the Medigap plan who pays the deductible and 20% coinsurance
How do the enrollment periods for Medigap work?
IEP - first 6 months after enrollment in Part B
SEP - 63 days for A, B, D, F, K and L from date previous plan ends as long as client doesn’t lose coverage through their own fault
What are the look-back/waiting period rules with Medigap?
> Medigap plans may only obtain client’s medical history from the 2-6 months prior to effective start date of policy
> Medigap can delay paying for 3-6 months for a health problem discovered during the 2-6 month lookback
> Lookback is not permitted if the client had continuous coverage prior to enrolling in Medigap policy
Define Medicare Supplement SELECT Plans
A medigap plan that uses provider networks
Define Medicare Supplement INNOVATIVE plans
the insurance company can offer some additional benefits at no extra cost to the Medicare beneficiary
How is cost of Medigap determined?
Age, gender, smoking status and where the person lives
What is the Oregon Medigap Birthday Rule?
For a persons birthday and 30 days beyond, a Medigap policy holder can change companies without underwriting, change to an equivalent plan (can change to a plan with less coverage but not better coverage)
What is one key difference in premiums between medigap policies and advantage plans?
Advantage Plan premiums do not increase with age
What role does the CMS play in advantage plans?
They give different plans ratings on a 5 star rating scale and award higher rated plans more money
How does enrollment in advantage plans work?
> Follows the same 7 month style that standard Medicare follows
No late enrollment penalties
Can enroll or change plans without underwriting from October 15 - December 7
If late enrollment in Part B, Medicare advantage enrollment is from April 1 - Jun 30 with plan becoming effective July 1
Disenrollment lasts from Jan 1 - Feb 14
60 day special enrollment for those who lose coverage (when it’s not their fault)
Continuous special enrollment for Limited Income Subsidy (LIS) with new coverage going into effect on next day of following month
