Test 1! Flashcards
HMO, PPO, POS
HMO: Health Maintenance Organization
* Gate keeper, in network, provision of care + insurance function
PPO: Preferred Provider Organization
* Negotiate contracts, own networks of providers, larger network
POS: Point-of-Service plan
* …yeah
Let’s talk Workers Comp:
The first kind of HI was worker’s comp where employers were liable for workplace injury. They, however, had three defenses:
- That the worker assumed the risk in taking the job
- That coworker caused the accident
- Contributory negligence (partial fault of the employer)
1965: Medicare and Medicaid
Let’s talk 1930s (Great Depression)
1930s: Great depression brought about all-hospital service plans (Baylor developed this) and Prepaid Group Practice Plans. Blue cross was made for hospitals, later on Blue shield was for docs/services.
Baylor targeted school teachers and created the original hospital service plan. Created a network of hospitals that became Blue Cross
California docs were kicked out of medical society, but came together and formed a network for doctors and services. Became Blue Shield.
Let’s talk Early growth of Hi 1940s-1950s
1940s: labor unions made it a requirement for employees to have HI. Wage and price controls and Federal tax codes contributed to the early growth of HI.
1943: HI benefits are not subject to income tax
Give a quick skinny on Medicaid
Made in 1965 along with Medicare
Federal-state run program for adults, children, elderly and disabled
What are three trends you see from table 2.1?
Medicaid is increasing as under PPACA states are encouraged to expand medicaid to cover more Americans. It still is a primary source of funding for nursing homes
Employer-sponsored insurance went lower as, with the recession, people gave up their benefits to keep their jobs. The bulk of employees are in the 3-9 employee range (where only 50% are given the benefits)
The uninsured rose. Men are more likely to have it than women. Minorities and illegal aliens are less likely to have insurance (46% of noncitizens)
Explain some advantages of employer-sponsored coverage
- Rates are generally lower (employed more likely to be healthy than unemployed)
- Multiple options are often provided
- Dependents can also be covered under this insurance
What is a risk premium?
The measure of our willingness to pay insurance. It’s the amount over and above the expected loss that we are willing to pay to avoid the consequences of the loss.
What are two of the 4 HI hypotheses?
Degree of risk aversion
The wealth effect: as wealth increases, risk premium decreases, no insurance.
What is adverse selection?
When the consumer know more about their likelihood of using health services than does the insurer.
How do companies combat adverse selection.
Utilizing underwriting to determine premiums
HMO effect vs Favorable selection
HMO effect is when HMOs UTILIZE multiple strategies to reduce hospitalizations
Favorable selection is the PHENOMENON that HMOs attract members who are low utilizers.
Give examples of rate making:
Community rating: when all individuals and/or all groups are put into a single risk pool
Manual rating: when insurers seek to identify characteristics of individuals/groups that are associated and place into risk pools.
Experience rating: bases the premium on prior or current claims of a group
What is self insuring?
When an employer bears the underwiting risk itself. It may use a third-part administrator.
What happens when you combine dissimilar groups?
you have a wider range of costs/utilization with hard to predict premiums/rates.
