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HEALTH INSURANCE--

HOW TO GROW A SYSTEMJohn C. Lammers

Department of Communication

University of IllinoisCMN 463: Organizational Health Communication

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Insurance Concepts

pooled risk

moral hazard

adverse selection

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Insurance elements premiums (probability * loss)

deductibles

coinsurance

upper limits

exclusions

Insurance

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Common policy features contract to pay for an agreed upon

range of services under speciedconditions either to subscriber or toprovider

about ! " specied conditions

guards pool

Insurance

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Insurance

#ealth insurance example$

%rovisions$ &1'!!! deductible

!" coinsurance

&'!!! upper limit

#ospital bill$ &1!'!!! xclusion$ &1'!!!

#o much do you oe+

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Insurance

xample' continued$ timing matters

A B C

,pper limit Coinsurance -eductible

-eductible -eductible Coinsurance

Ins$./!!0!! 0!!

2ou$01!! .3!! ..!!

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The Medicare benefit

ac!a"e benets nanced primarily by

payroll taxes

general tax revenues beneciary premiums

beneciaries responsible for paying aportion of the cost of most coveredservices -eductibles coinsurance4

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The Medicare benefit

ac!a"e limited to acute care services and

prescription drugs needed for diagnosisor treatment of illness or in5ury4

coverage through traditional program ora private health insurance plan 6edicare7dvantage (67) (aka %art C)4

8raditional 6edicare covers services in

three parts9 hospital insurance program (%art 7)'

9 supplemental insurance program (%art :)9 prescription drug benet (%art -)4

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The Medicare benefit

ac!a"e %art - covers outpatient prescription drugs not

covered under %art :' also voluntary beneciaries must have at least to prescription

drug plans to choose from in their region responsible for a premium that depends on the

plan they choose premiums fully subsidized if their income is belo

10" of @%A and assets are less than &3'B!

(single) &1B'1/! (married) premiums partially subsidized on sliding scale forbeneciaries if income above 10" and belo10!" of the @%A and assets less than &11'31!(single) or &B'.1! (married)4

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The Medicare benefit

ac!a"e 67 program$ receive 6edicare benets by enrolling

in participating private plans health maintenance organizations' preferred provider

organizations' or private fee

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6edicaid elementsDelfare$ assistance for the poor

eligibility$ 7@-C

;;I (agedEdisabledEblind) varies by state

generally single services

Medicaid

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Medicaid continued$

benets$no balance billing

no deductibles

no copayments

7dministration$

@ederal government 00" funds (generalrevenues)

all states except 7rizona

much variability

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%rospective payment determined in advance of services

for hospitals$ -J>s

for physicians$ :=;

Mana"ed Care

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Mana"ed Care

%rospective payment

determined in advance of services

for hospitals: DRGs

.3 diagnosesG 2ale' 1/30

rst applied by 6edicare

psychiatric>s excepted

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Prospective payment for physicians:RBRVS

formerly$ ,C

prevailing$ 30th of the 6-s in the area ad5usted using an index

3'!!!K common procedures L locality (B!!) Lspecialty (0!) M 3! million dierent possible

payments (NN) :=;$ relative orkEpractice costsEtraining

costs based on survey of '1. physicians(time' eort' skill' stress)

Mana"ed Care