Insurance Types

Question 1

Cost Sharing

Answer 1

start slide 221

How health plan costs are shared
Deductible
Coinsurance
Copayment

(not premiums, balance billing amounts for out of network, or non covered services)

Question 2

Copayment

Answer 2

medical cost sharing in a health insurance plan that requires an insured person to pay a FIXED dollar amount when a medical service is received.

The insurer is responsible for the rest of the reimbursement.

Question 3

Deductible

Answer 3

A fixed dollar amount during the benefit period - usually a year - that an insured person pays before the insurer starts to make payments for covered medical services.

Plans may have both per individual and family deductibles.

Question 4

Gatekeeper

Answer 4

Under some health insurance arrangements, a gatekeeper is responsible for the administration of the patient’s treatment; the gatekeeper coordinates and authorizes all medical services, laboratory studies, specialty referrals and hospitalizations

Question 5

Coinsurance

Answer 5

A form of medical cost sharing in a health insurance plan that requires an insured person to pay a stated percentage of medical expenses after the deductible amount, if any, was paid.

Question 6

Managed care Provisions-

Answer 6

Features within health plans that provide insurers with a way to manage the cost, use, and quality of health care services received by group members. Examples include:

1. Preadmission certification : Failure to obtain a preadmission certification in non-emergency situations reduces or eliminates the health care provider’s obligation to pay for services rendered.
2. Utilization review - The process of reviewing the appropriateness and quality of care provided to patients. Utilization review may take place before, during, or after the services are rendered.
3. Preadmission testing - A requirement designed to encourage patients to obtain necessary diagnostic services on an outpatient basis prior to non-emergency hospital admission. The testing is designed to reduce the length of a hospital stay.

Question 7

Premium

Answer 7

Agreed upon fees paid for coverage of medical benefits for a defined benefit period.

Premiums can be paid by employers, unions, employees, or shared by both the insured individual and the plan sponsor.

Question 8

Primary care physician (PCP)

Answer 8

A physician who serves as a group member’s primary contact within the health plan.

In a managed care plan, the primary care physician provides basic medical services, coordinates and, if required by the plan, authorizes referrals to specialists and hospitals.

Question 9

Third party administrator (TPA)

Answer 9

An individual or firm hired by an employer to handle claims processing, pay providers, and manage other functions related to the operation of health insurance.

The TPA is not the policyholder or the insurer.

Question 10

Usual, customary, and reasonable (UCR) charges

Answer 10

charge is the provider’s usual fee for a service that does not exceed the customary fee in that geographic area, and is reasonable based on the circumstances.

Question 11

Does PPO use UCR?

Answer 11

Instead of UCR charges, PPO (Preferred Provider Organizations) plans often operate based on a negotiated (fixed) schedule of fees that recognize charges for covered services up to a negotiated fixed dollar amount

Question 12

Indemnity plan -

Answer 12

A type of medical plan that reimburses the patient and/or provider as expenses are incurred.

Question 13

What is a managed care plan

Answer 13

Managed care refers to health care insurance plans designed to provide care at the lowest possible cost. In order to make coverage affordable, managed care plans require that patients follow certain rules

There are three major types of managed care plans:

Health Maintenance Organizations (HMOs)
Preferred Provider Organizations (PPOs)
Point-of-Service (POS) plans.

Question 14

HMO

What is it

Answer 14

Health maintenance organization

need a PCP: coordinate care, and to refer to specialists or hospitals in network

Question 15

Group Model HMO

Answer 15

HMO pays one medical group a per capita rate

group distributes money among its medical staff

(Kaieser)

Question 16

Staff Model HMO

Answer 16

Pt can use limited number of providers who are employees of the HMO and work in HMO facility

Question 17

Network Model HMO

Answer 17

MOST COMPREHENSIVE

HMO has contracts with multiple physician groups (many multispecialty geoups)

ie Emblem health

Question 18

Individual Practice Association (IPA)

Answer 18

independent physicians with own offices that form a group and contract with the HMO

Question 19

Capitation:

what is it

Answer 19

is a flat periodic payment per enrollee to a healthcare provider ny the third party payer
(used in HMO)

Fixed payments regardless of volume of services, risk sharing all three parties

1) Managed care company- UP FRONT AMOUNT
2) Patient- PREMIUM
3) Provider- receive for each patient regardless of volume: short-term risk that the costs of providing service, (including profits), might exceed the capitation payment.

Focus on PREVENTION and health and WELLNESS

Question 20

Does HMO provide comprehensive care?

Answer 20

YES

Once recommended by a Primary Care Physician insured patients can be referred to a large network of specialists for more specific needs

Question 21

How are providers paid by HMO?

Answer 21

fixed, pre-paid fee per person (capitation)

Question 22

Health Maintenance Organization Characteristics


3

Answer 22

1. Centered on Primary Care Physician
   - Gatekeeper
   - Care manager
   - Specialist referrals
2. HMOs often provide integrated care and focus on prevention and wellness.
3. It generally won’t cover out-of-network care except in an emergency.

Question 23

Advantages of an Health Management Organization

3

Answer 23

Decreased third party payer costs when compared to a “traditional” fee-for-service plan.

HMOs have fewer out-of-pocket costs for the enrollee, including smaller co-payments and deductibles.

HMOs cover preventive care, essential health benefits and prescription drugs. When receiving health care services from network providers, claims are filed directly to the HMO.

Question 24

Disadvantages of an Health Management Organization

3

Answer 24

An HMO may not provide coverage if you receive health care services from a doctor, hospital or other health care provider outside its network or service area

A HMO member may need a referral to see a specialist
HMOs may not be the best choice if travel is regular or have a specific physician that is not part of the HMO’s provider network.

Also, you have no guarantee that doctors and hospitals in your HMO’s provider network will stay in the network.

Question 25

What is a PPO?

Answer 25

Preferred Provider Organizations (PPO’s) allowed to go in network without referral from PCP (no gatekeeper) flexibility to go out of network : but pay the cost of your treatment in full, and then submit the bill for reimbursement to the insurance company. (higher copay)

Question 26

PPO Subscription based:

Answer 26

Is a subscription-based medical care arrangement where membership allows a substantial discount below the regularly charged rates of the designated professionals partnered with the organization

Question 27

PPO Access Fee

Answer 27

Preferred provider organizations themselves earn money by charging an access fee to the insurance company for the use of their network (unlike the usual insurance with premiums and corresponding payments paid either in full or partially by the insurance provider to the medical doctor). --higher copay, deductible, premium

Question 28

What is POS

Answer 28

hybrid of HMO and PPO plans. Like HMO: pt designates in network PCP Like PPO: can go out of network If leave network: pay most of bill unless primary care provider has made a referral to the out-of-network provider. Then the medical plan will pay the fees.

Question 29

POS pros/cons

Answer 29

pros 1-can leave network 2-comprehensive choice of providers (ie if live in rural area) cons 1. high deductible out of network (low copay in network) 2. might waste premium money if they sign up for POS coverage and never use out-of-network specialists. 3. out of network paperwork 4. may need referrals to go out of network

Question 30

point-of-service products

Answer 30

At the same time, HMOs have developed products, called point-of-service products, which permit covered people to elect to receive care outside of the HMO network, typically with higher cost sharing.

Question 31

Risk Pooling

Answer 31

private health coverage pools the risk of high health care costs across a large number of people -they pay premium based on average cost of medical care for the group of people -->To make healthcare affordable for most people should result in expected costs for the pool that are reasonably predictable for the insurer and relatively stable over time (average level of health risk in the pool should not vary dramatically from time to time, although costs will rise with overall changes in price and utilization).

Question 32

Adverse Selection

Answer 32

health coverage providers take steps to avoid attracting a disproportionate share of people in poor health into their risk pool (b/c then cost will rise and healthy people will not want to be in the pool)

Question 33

Death Spiral

Answer 33

risk pool has adverse selection---lose healthier risks and cause avg cost to rise The most efficient and effective underwriting mechanism for avoiding adverse selection is to provide coverage to already formed large groups of people, such as the employees of a large employer.

Question 34

Most effective way to avoid adverse selection:

Answer 34

The most efficient and effective underwriting mechanism for avoiding adverse selection is to: provide coverage to already formed large groups of people, such as the employees of a large employer.

Question 35

Underwriting

Answer 35

--use medical or health info in the evaluation of an applicant for coverage, typically for life or health insurance. health information may be used in making two decisions: 1.) Whether to OFFER or DENY coverage 2.) What PREMIUM RATE to set for the policy

Question 36

Effect of ACA on underwriting:

Answer 36

insurers cannot discriminate against anyone for their health. This means they aren’t allowed to ask for medical history when someone applies for coverage. (risk is spread through new federal taxes that compensate insurers for the amount of sick patients they take on)

Question 37

ACA change in underwriting pros and cons:

Answer 37

con: sticker shock: increased premiums pro: insurance cannot -Ask for health information on an application -Increase premiums based on the applicants risk level -Exclude benefits that the applicant will need to care for a condition -Refuse to cover services with an elimination rider

Question 38

Employee Retirement Income Security Act of 1974 (ERISA):

Answer 38

standards for employee benefit plans --protect from losing benefits (bc of the studbaker motor company)

Question 39

Amendments to ERISA 5

Answer 39

1. COBRA 2. HIPAA 3. Newborns and Mothers Health Protection Act 4. Mental Health Parity Act 5. Women's Health and Cancer Rights Act

Question 40

Consolidated Omnibus Budget Reconciliation Act (COBRA),

Answer 40

amendment to ERISA workers and their families with the right to continue their health coverage for a limited time after certain events, such as the loss of a job

Question 41

Health Insurance Portability and Accountability Act (HIPAA)

Answer 41

Amendment to ERISA protections for working Americans and their families who have PREEXISTING MEDICAL CONDITIONS or might otherwise suffer discrimination in health coverage based on factors that relate to an individual's health.

Question 42

Minimum capital requirements:

Answer 42

state law of minimum amount of net worth that an insuring organization must have in order to operate: unencumbered – i.e., it must be available to pay for claims

Question 43

Guaranty fund:

Answer 43

state law: to pay for claims of a patient if insurance defaults

Question 44

Mandated Coverage

Answer 44

State law to cover certain coverage = MANDATED BENEFITS (vary by state, federal law also has a few) ie: mental health services, substance abuse treatment, and breast reconstruction following mastectomy.

Question 45

Rate Bands

Answer 45

laws that restrict the diff between the lowest and highest premium allowed to charge for same coverage --ie limit underwritting

Question 46

Community rating

Answer 46

all policyholders are charged the same premium for the same coverage MODIFIED COMMUNITY RATING: health insuring permitted to vary premiums for coverage based on specified demographic characteristics (e.g., age, gender, location) but CANNOT vary premiums based on the health status or claims history of policyholders.

Question 47

Loss ratio

Answer 47

Ratio: Benefits paid/Premiums (Loss claims/Earned premiums)

Question 48

Guaranteed renewability:

Answer 48

guarantees policyholder right to renew their policy when the term of coverage expires. The health insuring organization generally is permitted to change the premium rates at renewal.

Question 49

2 models pushed by CMS to move away from Fee for Service model and reduce costs:

Answer 49

1. ACO: Accountable Care Organizations | 2. PCMHs: Patient Centered Medical Homes

Question 50

Accountable Care Organization (ACO)

Answer 50

healthcare organization: payment and care delivery model that seeks to tie provider REIMBURSEMENT to QUALITY metrics and REDUCED COST of care for an assigned population of patients. Providers (ie primary care Dr, specialists, and hospitals) work together and accept collective accountability for the cost and quality of care delivered to a population of patients. ACOs create incentives for healthcare providers to treat an individual patient across care settings, such as physician practices, hospitals, and long-term care facilities.

Question 51

Shared Savings Program

Answer 51

Medicare: when healthcare organization becomes an ACO, share of the savings that would result from improving care quality and reducing the cost for their eligible Medicare populations

Question 52

Patient Centered Medical Home (PCMH)

Answer 52

provide comprehensive and continuous medical care to patients with the goal of obtaining maximized health outcomes. ``` Principals of Medical Home: Personal physician Physician directed medical practice Whole person orientation Care is coordinated and/or integrated Quality and safety are hallmarks Enhanced access to care Payment appropriately recognizes the added value ```

Question 53

How Care Coordination part of patient centered medical home

Answer 53

essential component of the PCMH. Care coordination requires additional resources such as health information technology, and appropriately trained staff to provide coordinated care through team-based models. Additionally, payment models that compensate PCMHs for their effort devoted to care coordination activities and patient-centered care management that fall outside the face-to-face patient encounter may help encourage coordination

Question 54

Medical Home vs Traditional Managed Care

Answer 54

medical home emphasize medical management rewards quality Patient can see any dr they want, No referral or permission needed, doctor facilitates info to subspecialists vs gatekeeper placed more financial risk on the Physicians resulting in rewards for less care

Question 55

Similar btwn ACO PCMH 3

Answer 55

More than just fee-for-service. (reduce financial incentives for providers to earn more by treating more) both fee-for-service but also includes another revenue stream. Better care through coordination. (integration and coordination for better health outcomes) Information technology (IT). to improve the quality of care and produce better patient outcomes

Question 56

ACOS AND PCMHS: Differences

Answer 56

Numbers. --A Patient-Centered Medical Home (PCMH) refers to a single primary care practice. --Accountable care organizations (ACOs) = umbrella organizations incorporate multiple primary care practices, specialists, and at least one hospital. Shared risk and savings. --ACOs are designed to better align incentives with behavior by requiring participants to share bonus payments for savings generated beyond established benchmarks—or penalties for cost overruns. --PCMHs have no such sharing mechanism. Autonomy. - -Doctors who join ACOs can expect to enter into contractual agreements with the organization around referral and care-management protocols. - -PCMH physicians retain a greater level of independence.

Question 57

Patient Centered Medical Home Program Challenges

Answer 57

1. Accreditation standards are being revised 2. A wonderful concept that’s hard to actually do 3. Can be done by organized primary care, but it must be truly organized and have the infrastructure to support it 4. Most achievable with a truly integrated system

Question 58

Private health insurance

Answer 58

coverage by a health plan provided through an employer or union or purchased by an individual from a private health insurance company.

Question 59

Employment-based health insurance

Answer 59

Employment gives it, to family also

Question 60

Own Employment-based health insurance

Answer 60

Employment gives it only to employee

Question 61

Direct-purchase health insurance

Answer 61

individual purchases plan from a private company

Question 62

Private Plans reason to get it (2)

Answer 62

Protect from the potentially extreme $ costs of medical care if they become severely ill Ensure that they have access to health care when they need it and with whom they would like to see* *within the provision of the plan

Question 63

5 private insurance types

Answer 63

HMO PPO POS EPO Indemnity Plans

Question 64

How private insurance delivered

Answer 64

1. commercial 2. BCBS 3. HMO 4. Self Funded Employee health benefit plan

Question 65

Private Plans Offered by Blue Cross Blue Shield (3)

Answer 65

1. HAS 2. FAS Accounts 3. HRA

Question 66

Health Savings Accounts

Answer 66

Funded by the BCBS company member, an employer or anyone else. reimburses employees for specific health care expenses (pre-taxed) $ contributed to your HSA belongs to you and can be used to cover eligible current or future medical expenses.

Question 67

Flexible Spending Accounts

Answer 67

Funded: Deduction from Paychecks reimburses employees for specified expenses (for example, health care or dependent care) as expenses are incurred. FSAs are usually funded through deductions from employees’ paychecks.

Question 68

Health Reimbursement Arrangements

Answer 68

Funded by Employer reimburses employees for specific health care expenses as expenses are incurred. HRAs are funded by employers

Question 69

Health Maintenance Organizations (HMOs)

Answer 69

A Health Maintenance Organization (HMO) contracts with its providers allow for premiums to be lower, --health providers has the advantage of having patients directed to them; but these contracts also add additional restrictions to the HMO's members. 


Question 70

Self-funded Employee Health Benefit Plans

Answer 70

Employer takes a risk: pays claims as they come

Question 71

third-party administrators.

Answer 71

ponsors of self-funded health plans contract with one or more third parties to administer the plan

Question 72

Medicare Prescription Drug, Improvement, and Modernization Act of 2003.

Answer 72

Medicare Part D: he prescription drug benefit program

Question 73

FICA

Answer 73

federal insurance contributions act tax on employees and employers to fund medicare and medicaid

Question 74

Medicare Payments Part A Part B

Answer 74

Part A: - FICA - Deductible PART B: -Program pays 80% after $100 deductible

Question 75

The Federal Medical Assistance Percentage (FMAP)

Answer 75

The amount of Federal payments to a State for medical services depends on the actual amount spent that qualifies as matchable under Medicaid and The Federal Medical Assistance Percentage (FMAP) The FMAP is computed from a formula that takes into account the average per capita `` for each state relative to the national average. By law, the FMAP cannot be less than 50%.

Question 76

A state’s Medicaid program must cover at least:

Answer 76

Inpatient and outpatient hospital services Laboratory and x-ray services Skilled nursing and home health services Doctors’ services Family planning Periodic health checkups Diagnosis and treatment for children

Question 77

States pay on average 21% of total state budgets on Medicaid

Answer 77

States pay on average 21% of total state budgets on Medicaid

Question 78

SCHIP = designed to help states expand health care coverage to uninsured children to at least include:

Answer 78

Inpatient and outpatient hospital services Surgical and medical services Laboratory and x-ray services Well baby/child care, including immunizations

Question 79

who is not insured?

Answer 79

Twenty-five percent of all working class families in Los Angeles have no health insurance coverage all year long, more than 500,000 people above the poverty line. 885,000 people under and over poverty line do not have health insurance. 20% of all Louisiana children have no health insurance. The number uninsured part of the year is 1.4 million (e.g. people between coverages or between jobs). Nationally 13% of all workers do not have health insurance.

Question 80

How did ACA expand medicaid?

Answer 80

Specifically, the ACA expanded Medicaid eligibility to nearly all non-elderly adults with income at or below 138% of the federal poverty level (FPL) – about $16,245 for an individual in 2015.