Understanding Healthcare Systems

Question 1

the US has the most ____ health care system in the world: just over ___ of GDP

Answer 1

the US has the most expensive health care system in the world: just over 17% of GDP

Question 2

explain the pressures that explain the rise in health care costs

Answer 2

• demographic pressures
• technological pressures
• overall rising cost of health care

Question 3

describe the specific challenges for the US

Answer 3

• malpractice and defensive medicine
• some ineffective and inappropriate care
• higher prices and medical inflation
• administrative waste
• pressures of profit in medical care

Question 4

describe the asymmetry of information

Answer 4

• consumers (patients) rely on suppliers (physiciand and other health care professionals) for expertise and recommendations
• providers depend on patients for necessary information to assist with diagnosis

Question 5

give the breakdown of healthcare financing in the US

Answer 5

Question 6

describe the breakdown of health care coverage

Answer 6

Question 7

describe how an individual private insurance functions

Answer 7

• a third party payer “insures” health care services
• 2 financial transactions
  
  • individual pays a premium (contribution) to a health insurance plan
  • when the individual needs care, the insurer reimburses the provider of care

Question 8

list the problems of private health insurance?

Answer 8

• large administrative overhead
• cost gets higher for people who become sick
• before 2010: those who apply for insurance and are at risk for illness can be turned down

Question 9

describe how an employment-based private insurance functions

Answer 9

• employers pay part of the premium (contribution) to purchase health insurance for employees
• subsidized by the federal government through tax exemptions for employers ($260 billion in 2009)

Question 10

list the positive aspects of employer-based insurance

Answer 10

• cost lower than individual insurance
• administrative cost high, but not as high as individual insurance
• people can obtain insurance as part of their employment benefit package

Question 11

list the problems with employer-based insurance

Answer 11

• costs can rise steeply from year to year
• employer has no obligation to provide insurance
• the employer can require you to pay a greater % of the premium

Question 12

define premium

Answer 12

the basic fees collected by the insurer on a monthly or an annual basis

Question 13

describe a deductible

Answer 13

amount of money to be paid out-of-pocket before the insurer will begin to pay

Question 14

define experience rating

Answer 14

• insurers differentiate premiums for individuals based on potential risk of getting risk
  
  • insurer sets premiums differently for each group based on the “experience” of each group in using health services
  • $200, $400 or $600/month

Question 15

describe community rating

Answer 15

• insurer sets premiums based on the community of its subscribers
  
  • $400/month for all
• health insurance principle of redistribution enhanced by this

Question 16

name the 3 primary goals of the Affordable Care Act (ACA)

Answer 16

• 3 primary goals
  
  • make affordable health insurance available to more people
  • expand the Medicaid program to cover all adults with income below 138% of the federal poverty level
  • support innovative medical care delivery methods designed to lower the costs of health care generally

Question 17

describe government financing

Answer 17

• almost one-third of the US population is eligible for government health care programs
  
  • federal, state and local employees
  • Military and Veterans Administration
  • government-financed public health insurance programs

Question 18

government-financed health programs were developed as a way to ______

Answer 18

government-financed health programs were developed as a way to provide affordable care to those “shut out” of the commercial insurance market

• the elderly (Medicare)
• the disabled (Medicare)
• the poor (Medicaid)
• needy children (Medicaid)

Question 19

describe Medicare Part A

Answer 19

• contributory social insurance program
  
  • everyone with an income must contribute through social security taxes
  • everyone who pays in is covered
• administered through Social Security
  
  • employers and employees contribute 1.45% each of wages and salaries
  • self-employed pay 2.9%

Question 20

describe eligibility for Medicare Part A

Answer 20

• covers Americans 65 and over eligible for Social Security
  
  • whether or not they are retired
  • must have paid into SS for a minimum of 10 years
  • covers spouse as well, once they turn 65
• covers Americans under 65 with permanent disability
  
  • waiting period: after they have been receiving SS disability for 24 months
    
    • exceptions to waiting period: chronic renal disease, ALS

Question 21

what does Medicare Part A not cover?

Answer 21

unskilled (custodial) nursing home care

Question 22

describe Medicare B coverage

Answer 22

• all “medically necessary” services
  
  • physician services
  • physical, occupational, speech therapy
  • medical equipment
  • diagnostic testing

Question 23

describe eligibiltiy for Medicare Part B

Answer 23

• eligibility
  
  • people eligible for Medicare Part A
  • plus payment of Medicare Part B premium
• financing
  
  • monthly premiums $105 (with some variation)
  • general revenues (federal taxes)

Question 24

describe Medicare Part C

Answer 24

• since 2003, Medicare beneficiaries can enroll in private health plans through “Medicare Advantage”
• provides benefits under Parts A and B, and often Part D as well under managed care plan
• Medicare then subsidizes the plan premium rather than direct reimbursement to providers

Question 25

describe Medicare Part D

Answer 25

• added partial prescription drug coverage
  
  • contributions (monthly premiums plus yearly deductible)
  • administered by private insurance plans; subsidies to enroll Medicare beneficiaries

Question 26

describe the donut hole problem seen in Medicare Part D

Answer 26

• Medicare stopped paying for prescriptions once you reach your drug coverage limit
• until 2010, the initial drug coverage limit was $2380; once you reach that, you are in the donut hole and pay the full cost of prescription drugs until your total out-of-pocket cost reaches $4550
• with the ACA, once a patient reaches the donut hole, they are eligible for a 50% discount on the total cost of brand name while in the gap

Question 27

describe SCHIP

Answer 27

State Children’s Health Program (SCHIP)

• providers coverage for kids in families with incomes at or below 200% of the federal poverty line