Topic 11: Employer Provided Health Care Benefits Flashcards
(21 cards)
Issues With Health Care
High Cost
High % of uninsured or underinsured
High degree of 3rd party payment for healthcare
Lethal Combination in Healthcare
Third party payment and fee for service reimbursement of providers creates a moral hazard
Indemnity Plans (Old School)
Also known as Hospitalization Insurance
Covers
Room cost of hospital
Surgeon’s fees
Follow-up visits from the hospital stay
Gaps in Coverage Existing in Indemnity Plans
Non-Hospital based expenditures
Hospital stays had limited coverage
Balance billing
What is Balance Billing
Charge - Reimbursement = Balance
Owe amounts not covered by insurance
Major Medical Plan
Pays for routine, non-hospital based expenditures not covered by basic indemnity plan
Higher limits for hospital stays
Features cost sharing (80/20 paying)
Features co-insurance
Role of Insurers in Indemnity Plans
Just indemnify insureds for covered losses
Do Insurers Manage or Coordinate Care in Indemnity Plans?
No, leading to padding of bills
Types of Managed Care Plans
Health Maintenance Organizations (HMOs)
Preferred Provider Organization (PPOs)
Consumer Directed Health Plans (CDHP)
Health Maintenance Plans (HMOs)
Does not always pay providers more by doing more
Places providers/hospitals at financial risk for over utilization
Providers cannot balance bill
Insurance Co.’s get leverage with threat of being out of network
Benefit of Managed Care Plans over Non
Removes incentives present under fee-for-service plans to do more rather than less
Two Types of HMOs
Staff Models
Group Models
Staff Model HMOs
Physicians are EEs of the HMO
Paid by salary
Only sees HMO patients
Group Model HMOs
Physicians are EEs of a separate group practice or part owners in the group practice
HMO enrolls individuals and contracts with the group practice to take care of HMO patents
Group practice can see HMO and non HMO patients
Two Disadvantages to HMO Enrollment
EE may have to change providers to join HMO
No coverage for out of plan utilization
Preferred Provider Organizations (PPOs)
Have contracts with preferred providers
Agree to accept the PPO payment and any deductibles or copayments as payment in full
Discount services
Cannot balance bill
Unlike HMO, you can go out of network and get coverage
Consumer Directed Health Plans (CDHP)
Buy healthcare like other products (car, home)
Introduces consumerism
Force employee awareness of costs
Coinsurance/Deductible (Similar to Major Med)
Employer funds account Employee can add funds pre-tax If you spend too much you pay more - Whatever is left over you get to keep Catastrophic costs per person capped
80/20 Rule (Not Coinsurance)
80% of all costs in healthcare system come from only 20% of the population
Patient Protection and Affordable Care Act (Obamacare)
Dependent covered to age 26
Lifetime limits are banned
- Ins Co just built this back into price
All preventative care and checkups are free (2018)
- CDHPs already built this in
No charging higher rates for those with pre-existing conditions and coverage of those conditions may not be excluded or reduced
- Telling Ins Co.s they cant underwrite
Taxes (40%) on cadillac health insurance plans (2018)
Individual Mandate (Obamacare)
Anyone who does not participate in a plan is fined 1% of their income to a max of $2085
Fees from penalties fund Govt. Health Care Option, but it costs around $5000 to insure an employee and $20000 to insure a family
Penalty For Employers Who Do Not Offer EE Health Ins.
$2000
