Social Insurance/Comparative H.C Systems

Question 1

What is Medicare?

Answer 1

A social insurance that consists of 2 main parts (Part A and B) along with Part C & D that provides coverage to beneficiaries who are 65 years or older.

Question 2

Medicare Part A

Answer 2

Hospital insurance that covers only inpatient services and copayments. Automatically given to those 65 and older. Also covers skilled nursing facilities, home health care, and hospice.

Question 3

Medicare Part B

Answer 3

1. Available to all residents 65 and older.
2. It is optional and must pay a premium to obtain it
3. Covers outpatient services along labs and clinical services (basically not everything covered by Part A).

Question 4

Medicare Part C

Answer 4

The Medicare Adv. Plan that is coordinated with PPOs, HMOs, and POSs and are chosen by the beneficiary to extend benefits. Only entitled to certain providers.

Question 5

Medicare Part D

Answer 5

Prescription portion that provides access to drug insurances. A premium also needs to be paid in order to obtain it. It is entitled to individuals entitled to Part A & B who have low income.

Question 6

How is Medicare Part A Financed?

Answer 6

Financed primarily through Mandatory Payroll Deduction (FICA) tax. Takes 1.45% from employee earnings and 2.90 % from self employed persons.

Question 7

How is Medicare Part B & D financed?

Answer 7

Financed by SMI trust fund where premium payments are collected trust fund. Any extra funds is contributed from U.S Treasury.

Question 8

Medicare Liabilities

Answer 8

For those with Medicare Part A and B, beneficiaries are liable for charges not covered by Medicare and for various cost-sharing features.

Question 9

Medigap

Answer 9

A third party that assists with covering for liabilities that the beneficiary cannot pay. It is a private health insurance that covers for services that Medicare Part A and B cannot cover.

Question 10

What is Medicaid?

Answer 10

1. Also known as Title XIX of the Social Security Act
2. A federal state matching program where certain criteria is met to provide coverage.
3. Serves America’s poorest communities
4. Largest funding program
5. Cost sharing partnership between Federal Gov’t and State Medicaid Program.

Question 11

How is Medicaid Financed?

Answer 11

It is financed by the federal and state governments. Funding is determined through shares of medical expenditures by each states Federal Medical Assistance Percentage Program (FMAP).

Question 12

Federal Medical Assistance Percentage (FMAP)

Answer 12

A formula that compares the state’s average per capita income level with the national income average. For instance, with states with higher per-capita income levels are reimbursed smaller shares of their costs.

Question 13

Medicaid Eligibility among Individuals and States…

Answer 13

For individuals, eligibility is determined by the state and federal funding to the states is determined if the states are providing Medicaid Coverage to certain individuals who receive federally assisted income as well as not receiving cash payments.

Question 14

4 criteria for a state to meet eligibility for state funding:

Answer 14

1. Have low income families with children
2. Families with children under 6 or pregnant whose family income is below the 133 % federal poverty level.
3. All children under age 19 with incomes at or below the FPL
4. “Dual eligible” Medicare Beneficiaries.

Question 15

Dual Eligible

Answer 15

Medicare Beneficiaries entitled to Medicare through Medigap. Establishes the relationship between Medicare and Medicaid.

Question 16

Who is considered the “payor of the last resort” and why?

Answer 16

Medicaid is considered so because Medicare in a dual eligibility will try to cover the services first before Medicaid will.

Question 17

Medicare and Medicaid have ____ interests in _____ costs, but _____ have an incentive to _______ for the management of care.

Answer 17

Medicare and Medicaid have similar interests in limiting costs, but neither have an incentive to take responsibility for management of quality of care.

Question 18

When shifting costs, what do Medicare and Medicaid cover?

Answer 18

Medicare is the primary payer in a dual eligible that covers hospital, physician, and other acute medical care while Medicaid (based on states discretion) chooses to pay the often considerable Medicare copayments.

Question 19

Conflicts arise in cost sharing between which two groups and why? (Hint: Not with Medicare)

Answer 19

Between Medicaid and the state because the state may have more restrictive policies on cost sharing where as the Medicaid program itself does not. Depending on the state, this can cause individuals to receive less access to treatment.

Question 20

What did Medicare have conflicting incentives with around 1983?

Answer 20

Conflicts between Medicare and prospective system. With the usage of DRG’s, this caused patients to be discharged “sicker and quicker”. This led to post acute nursing homes to be covered by Medicare after discharge.

Question 21

Possible Solutions to Conflicting Incentives?

Answer 21

1. Coordinate the two programs
2. Shift financial responsibility of “dual eligible” to federal government.

• PPACA creates “office of the duals”

Question 22

For public insurance, what are two challenges that they face that prevent successful outreach?

Answer 22

1. Lack of Knowledge

2. Stigma

Question 23

Gruber (2002) identifies two things that are net impacts of social insurance implementation?

Answer 23

1. Take up

2. Crowd out

Question 24

Take up

Answer 24

Previously uninsured and did not have Medicaid before

Question 25

Crowd Out

Answer 25

Individuals who did not know about insurance but now they do. Many will leave their private insurance to enroll in Medicaid due to cheaper costs and better coverage.

Question 26

In the Take-up and Crowd-Up graph what do each of the letters represent and what does the graph mean overall?

Answer 26

1. D represents people who value insurance more and E who value it less. C are ones who are indifferent (and have no value at all; corner solution).
2. Graph shows indifferent goods and represents a tradeoff.
3. M represents free public insurance
4. Take up represented when C curve moves closer to M causing increased in satisfaction.
5. When E moves close to M, that is crowd out.
6. With D, that does not change because they are satisfied with where they are at and there is no change.

Question 27

Canadian Health Care System

Answer 27

1. A National Health Insurance Payor (Public administration)
2. Universal Program is partially supported by grants from federal government
3. Portable, Universal, and Comprehensive
4. Financing and deliver based of Canada’s Medicare version
5. No financial barriers to access and patients have a free choice in selection of providers. (Accessible)

Question 28

Fuch and Hahn Physician Fee Quantity

Answer 28

Study done in 1990 that broke down Canadian and U.S expenditures by specific services and from there estimated spending between the two countries.

Question 29

What did the Fuch and Hahn study find?

Answer 29

1. There was 38% higher spending per capita in U.S
2. Fees were 239% higher in U.S
3. However, U.S net incomes for physicians were higher than in Canada.

Question 30

Why were costs lower in Canada?

Answer 30

1. Physicians not allowing to charge extra to patients who can afford it.
2. Hospital Costs were regulated by provinces through approval of hospital budget.
3. Administrative costs (cost of switching from one doctor to another) was low.

Question 31

What was the June and Dave O’Neil Study and what did they base their comparisons on?

Answer 31

Another study that compared U.S and Canada based on three questions:

1. What were the difference between the countries health statuses and why?
2. How does access to healthcare resources differ between the two countries and why?
3. Is inequality and access to resources different between the two countries?

Question 32

Answering questions to June and David O’Neil Study…

Answer 32

1. Looking at differences in health statuses (life expectancy and mortality), each country is different depending on life style choices.
2. When it comes to access to healthcare resources, it depends on the difficulty of obtaining those resources. For instance, Canada complains of long wait times where as for U.S there are complaints of high costs of care.
3. When it comes to inequality, relationship between both countries is the same.

Question 33

Anderson and Colleagues (2005) 2 reasons for why the U.S has high healthcare expenditures

Answer 33

1. Due to other countries constraints of healthcare supply unlike the U.S
2. High cases of malpractice litigation