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Chapter 11: Healthcare Benefit (Broad Types of HC Plan (ACA Main Provision…
Chapter 11: Healthcare Benefit
Third Party Payments For Health Care Goods +Services
HCGS
Three Parties
Seller for HCGS
doctors; hospitals; drug companies
providers(doctors)
Buyer of HCGS
patient; insured person; EE/ER who gave them Health Ins.
consumer
Entity financially responsible for paying for HCGS
third party
insurer
government
medicare
medicaid
ER if self-insured
Incentives
patient/ insured/EE/ Buyer
moral hazard problem
no incentive to behave as a traditional consumer
Providers of HCGS
payment system in a 3rd party payment arrangement
Fee-for-services (FFS)
for every service, a separate fee is paid
inventive! max # of services
Patients with ins.+providers who are paid by FFS
utilization of HCGS :arrow_up:
dillema
Healthcare :arrow_up: GDP% :arrow_up:
ACA
more people have ins. more deductible
the reason why we spent so much money on the country is because of health insurance. And why so expensive , since we have HI.
Who bears the financial risks for over utilization?
providers
no
patients
a little
deductible & copayment
insurers
yes!
ER
yes, if plan is experienced rated
Broad Types of HC Plan
Traditional indemnity Plan
basic plan for hospital care
+majority medical
complete freedom of choice of providers
insurer role is to indemnify for covered losses
eg. $1000 in medical expenses
Insured pay first, file-claim with the insurer
$1000 Provider charge
-100 reductible
$900
80%/20%
&720 paid by the insurer
coinsurance
total out of pockett expenses for the insured (OOP)
$280
Coinsurance"180
deductible:100
OOP maximums
once reached coinsurance changes from 80%20% to 100%0%
typical payments
deductible
100-500
coninsurance
80%20%
OOP max
$2500-$5000
Managed Care Plans (HMO)
HMO=Health Maintenance Org.
Two roles
Insurance type role
pay for HCGS
Providers
provide HCGS directly
arrange for the provision of care through a contract
Typical HMO Structure
IBC key stars
person enrolls in a HMO
select a primary care provider (PCP) from a network of doctor
2 terms
PCP-acts as a gatekeeper for referrals to specialists+hospitals
must receive a referral to go to a specialist /hospital
typ. paid by capitation
1 more item...
doctors-that are have contracts with the HMO
Possible Disadvantage. to an HMO VS Indemnity Plan
Freedom of choice
may have to change providers to join an HMO
No coverage for "out-of-network" utlization without a referral
Managed Care Plans: PPOs
Preferred Provider Org.
IBC- personal chocice; Bluecross incsurers
have contract with preferred providers doctors, hospital, drug store
provider network
preferred providers agree to
provide services
discount from full charges
accept the PPO payment + any deductible/ copayments as payments in full of services
no "balance billing" of patients
eg. normal charge for a procedure=$100
preferred providers agrees to a discount =$75 copayment=$5
copayment(5)+PPO payment(70)
payments in full=75
patient
use a preferred provider
stay in -network
small copaymt
no balance billing
use a non-preferred provider
go out-of-network
have some coverage
pay first, seek reimbursement from PPO
:arrow_up:out-of-pocket cost
reimbursement hassle
Freedom-of-choice has a "price"
:arrow_up:out-of-pocket cost
reimbursement hassle
pays doctors by FFS
discounted FFS
PPO
doesn't place providers at financial risk for overutiliazation
Consumer Driven Health Plans (CDHPs)
most traditional health ins.(indemnity,PPO,HMO)
low deductible
EX; high deductible health plan
eg deductible= $2000/yr+high OOPmax
health savings account(HSA)
EE controlled
EE owned
ER/EEcan deposit funds into the HSA
EE can use the funds to pay the deductible +other OOP costs
consumerism
proper use of insurance (low F high S)
information available to insureds to help them be better consumer of HCGS
now insureds behaves traditional consumers because they are spending their own money
ACA Main Provision
market places
individual mkt
small group insurance mkt <=50 EEs
Large group mkt >50 EEs
individual /small group mkt
guaranteed issue
no denying coverage for "pre-existing conditions"
community rating
age
3:1 rating bands
location
tobacco use 1.5-1
guaranteed renewability
coverage for dependence up to age 26
coverage for (10 ) essential health benegits
no annual or lifetime maximums
no cost sharing for preventive services
Creation of On-Line Exchanges
market place
four types of coverage (actuarial values)
bronze
60%
silver
70%
gold
80%
platinum
90%
individual mandates
buy health ins. or pay a fine
2017 $695 or 2.5 of income (fine)
weak mandate
tax credits to purchase a silver plan for low-income individuals
Employer Mandate
ER shared responsibilities provision
ALE : applicable Large ER
ERmandates
ERs with 50+ EEs must provide HI
pay a fine
95% of all full-time EE
full-time:30 hrs/week
affordable basis
EE's contribution exceed 9.69% of EEs income
Silber plan at a min. 70% ACV
min. value
capitation- the more service they do; the more they can pay