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1

Primary Methods of PRIVATE healthcare financing

3

Individual Out Of Pocket

Individual PRIVATE health insurance

Emplyer-sponsered private health insurance

2

Individual Out-Of-Pocket

Modes of paying for healthcare

simplest mode of financing = DIRECT PURCHASE by consumer

limite to a SINGLE TRANSACTION between indiv / provider

3

Third-Party PAYER

An organization that provides REIMBURSEMENT to a

healthcare provider for services rendered to a patient

 

Financial protection against HIGH HEALTHCARE COSTS!

4

Third-Party​ ADMINISTRATORS

PROCESS/MANAGE the health plan claims

but do NOT carry the insurance risk

 

 

Financial protection against HIGH HEALTHCARE COSTS!

5

Premium

Money paid TO AN INSURANCE COMPANY

for COVERAGE

(for a defined period)

6

Health Plan 

ENTITY that provides for coveraage of designated health services (benefits package)

for plan members for a FIXED / PREPAID premium

7

Benefits

(covered services)

Medical / Health SERVICES for which

your insurance plan will pay

8

Benefit Design

What IS or what is NOT

COVERED

9

Beneficiary

INSURED INDIVIDUAL

ex.

enrolee / member / policy card holder / dependents

10

Deductible

Patient Cost Sharing

amount that the Insured

MUST FIRST PAY

before benefits by the plan are payable during the policy term

11

Copayment

Patient Cost Sharing

FIXED/SET amount of money

paid by the Beneficiary at the time of service

12

Coinsurance

Patient Cost Sharing

specified PERCENTAGE of

medical expenses / service that the beneficiary must PAY

13

Individual PRIVATE Insurance

Modes of Paying

third party (insurer) is ADDED to the patient + health care provider

Premium paid by individual to insurance plan

is DIRECT reimbursement payment for the health plan to service the provider

SERVICE BENEFIT PLAN

14

ACA on Individual Private Insurance

Affordable Care ACT

Historically, age & health status were determining factors in eligibility & rates for individual health insurance plans

 

Now DENIAL of COVERAGE based  on pre-existing consitions is BANNED under the ACA of 2010

15

Employer-sponsored Private health insurance

Modes of Paying

EMPLOYERS pay all or part of the premium for employee insurance

50% + people under 65 obtain healthcare coverage as an employee benefit

Empolyer group premium setting based on

experience rating or community rating

16

EXPERIENCE RATING

Employer-sponsored Private health insurance

Insurance premiums based on medical claims history of subgroups of insured individuals.
subgroups = employer group

Premiums are adjusted based on the HISTORY of those covered

Pay different premiums based on:

demographics / PMH utilization / Medical Status / Other

17

COMMUNITY RATING

Employer-sponsored Private health insurance

Premiums based on insurance company's overall expenses for a

SPECIFIC geographic area

and everyone in community pays the SAME PREMIUM

 

Either PURE or MODIFIED (adjusted)
Community rating

18

PURE community rating

Employer-sponsored Private health insurance

PROHIBITS RATE VARIATION

based on demographic / health factors

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MODIFIED (adjusted) Community Rating

Employer-sponsored Private health insurance

MORE COMMON vs PURE

RATES VARY based on Demographics:
Age / Family Size / Location / Lifestyle

Rates can NOT vary based on 
health status or claims experience (pre-existing health conditions)