Until 10/11 Flashcards
Why is health insurance important?
- Protects against financial losses
- Reduces access barriers so people less likely to forego care (preventative and chronic)
- Increases cost and utilization predictability (insurance companies can make more accurate predictions)
What were the Blue Cross health plans?
Hospital-based pre-payment insurance plans
What were the Blue Shield health plans?
Physician-based pre-payment insurance plans - doctor controlled (home visits, office visits, physician-hospital care)!
Why was employer health insurance created?
Labor shortage during WW2 so employers competed for workers by raising wages - US gov’t was worried about this with inflation so banned it. Employers began competing using fringe benefits, like health insurance.
What is the McCarran-Ferguson Act?
Deemed private insurance exempt from federal regulation.
US is capitalist so allows employers to control health insurance.
How did the IRS make health insurance cheaper for employers in 1954?
Made employer contributions for health insurance excluded from taxable income, so can increase health insurance contributions which then decreases cash wages.
Why is employer-sponsored insurance regressive?
- Not linked to salary, same premium - lower income pays higher share of wages in premiums.
- Excluded from payroll/income tax, so bigger tax break for the rich.
- Lower income earners are less likely to have employment that offers health coverage.
What advantages does for-profit, commercial health insurance have over Blue Cross/Shield (non-profit)?
- Can offer multiple forms of insurance, not just health.
- Can offer national coverage for large businesses.
- Offers indemnity plans which allow employer to play a direct role in benefit distribution.
- Offers lower prices on plans for healthy, low-risk workers.
What is experience rating?
Setting premiums according to individual risk = low-risk individuals cost less, high-risk individuals cost more
What is community rating?
Insurer sets rates based on pool/market risk factors, everyone pays same premium.
What is ERISA (1974)?
ERISA is the employee retirement security act passed by Gerald Ford.
Exempts self-insured employee health coverage from state regulation.
What are the harms of ERISA?
No uniform state/national oversight of key insurance elements.
Large plan inconsistencies.
What is an indemnity plan?
With an indemnity plan (sometimes called fee-for-service), you can use any medical provider (such as a doctor and hospital). You or the provider sends the bill to the insurance company, which pays part of it. Usually, you have a deductible—such as $200—to pay each year before the insurer starts paying.
What is an HMO?
HMO is a health maintenance organization that has a tightly managed network of providers with a primary care gatekeeper.
What is a PPO?
A preferred provider network where insurers create special “networks” of hospitals and physicians.
With a PPO plan, you can visit any doctor or hospital in or out of the network without a referral. You’ll pay less when you use in-network doctors and hospitals and pay more when you use out-of-network ones.
What is a high-deductible health plan?
Requires patients to pay the first several thousand dollars of medical bills, normally young people would choose this.
What are the types of private insurance policies today?
- Indemnity/conventional
- HMOs
- Preferred provider networks (PPOs)
- High-deductible health plans (HDHPs)
What is the most common health insurance status in the US?
Employer based insurance with 50%. Then it’s Medicaid (18%), Medicare (15%), non-group (6%), etc.
What is skin in the game?
Skin in the game is having a personal investment in something, so a vested interest in its success.
Do Americans have skin in the game?
Yes, because they have a growing share in out of pocket (OOP) spending even if they have employer coverage.
Do physicians have skin in the game?
Physicians historically had less skin in the game because they didn’t share in the financial risks, now they are beginning to have a larger share when we consider APMs… savings-sharings payment plans.
Why do employers offer health insurance?
- It attracts new employees and keeps them retained (job-lock).
- Many people believe the employer offering health insurance is a benefit, but really workers pay by taking lower wages.
- Employers get a tax exclusion (biggest tax break in US tax code)
What is the risk for employer-based insurance for a large employer? For a small employer?
Large risk pool because of a large # of people for large employer. For small employer there’s a narrow risk pool b/c of small # of people.
What are stop loss plans?
Insurance for providing insurance - the stop-loss insurer is liable for losses that go over set employee deductible limit.
Why are stop-loss plans beneficial?
Protect smaller employers from potentially bankrupting insurance risk - if small # of employees and one has severe health episodes, the cost could be catastrophic for employer.
Who purchases stop loss plans?
It is purchased by employers who have decided to self-fund their employee benefit plans, but do not want to assume 100% of the liability for losses arising from the plans.
What are the advantages of stop loss plans?
- Helps small employers mitigate the risk of one catastrophic risk bankrupting them.
- Helps when hospitals are experimenting to be more efficient, gives downside protection in case it fails and you lose money.
= provides protection to experiment and take risks
What is Medicare?
Public health insurance if you’re over 65 and have select disabilities/conditions. Divided into 4 sections.
What is Medicaid?
Eligibility defined by income.
Originally was just for the “deserving poor”, jointly funded by states/feds and covered elderly, disabled, pregnant, etc.
Now for all poor under the Medicare Expansion of the ACA, mostly funded by the feds.
What is Medicare Part A? What is it funded by?
Covers hospital care.
Funded by payroll tax.
What is Medicare Part B? What is it funded by?
Covers physician services (ex. x-rays, labs, non-hospital services, physical therapy, etc).
Funded by premiums from enrollees and federal revenue. Premiums subsidized and cover 25% of costs.
What is Medicare Part C? What is it funded by?
Medicare Advantage - managed private care plans that cover services in A and B.
Not separately financed, capitated payments from A, B, D funds.
What is Medicare part D? What is it funded by?
Pays for prescription drugs.
Funded by premiums from enrollees and general federal revenue.
Premiums are subsidized and cover only 25% of costs.
What is Medigap?
Medicare has substantial OOP (ex. 10% coinsurance), so Medigap is a private insurance that covers costs the feds don’t (ex. vision costs).
Covers costs enrollees would have to cover like deductibles, co-pays.
Funded by enrollee premiums.
What are Medicaid waivers?
Allow states to test new Medicaid approaches related to state-presidential priorities (ex. work requirements)
Can there be universal coverage in the US?
Actually there should be, because Medicare for all would shift the money from private health insurance spending to federal health spending - there would not be increased total costs.
Already paying for universal coverage .
What was sick care like in the 19th century?
Mostly women providing care in the home. Professional physicians weren’t well-respected and often had other jobs.
Hospitals mainly for people who were too poor or didn’t have family.
What transformed hospitals/medical care in terms of efficacy and safety?
Ether and Chloroform Anesthesia, Antiseptic technique, aseptic technique, gram stain diagnosits, x-rays.
