Financing Health CareFinancing Health Care

United States HealthcareUnited States Healthcare

PRIVATE INSURANCEPRIVATE INSURANCE

• Pays for all or part of a Pays for all or part of a person’s health careperson’s health care

• People pay a premium.People pay a premium.• PremiumPremium = monies paid for = monies paid for

insurance contract.insurance contract.• DeductibleDeductible = predetermined = predetermined

amount that the insured must amount that the insured must pay each year before the pay each year before the insurance company will ay for insurance company will ay for an illness or injury. The an illness or injury. The amounts vary and are stated amounts vary and are stated in the policy.in the policy.

Answer the following:Answer the following:

• If you pay $200 a If you pay $200 a month for your month for your health insurance health insurance and have a and have a deductible of $150 deductible of $150 what is your what is your premium?premium?

• What would be the What would be the maximum amount maximum amount you would have to you would have to pay a year?pay a year?

• Your Premium is Your Premium is $200$200

• Your maximum out Your maximum out of pocket expense of pocket expense is $2550.00is $2550.00

• Questions?Questions?

HEALTH MAINTENANCE HEALTH MAINTENANCE ORGANIZATIONS (HMO)ORGANIZATIONS (HMO)

• Provide health care services for Provide health care services for prepaid fee.prepaid fee.

• Stress preventionStress prevention. . • Would rather treat early or before Would rather treat early or before

person is ill to prevent costly person is ill to prevent costly treatment and diagnostic tests. treatment and diagnostic tests.

• Disadvantage is that limitations are Disadvantage is that limitations are placed on which doctors and facilities placed on which doctors and facilities you can use.you can use.

PREFERRED PROVIDER PREFERRED PROVIDER GROUPGROUP

• A group of doctors A group of doctors or hospital that or hospital that agree to provide agree to provide health care at a health care at a reduced rate. reduced rate.

• Usually offered by Usually offered by large companies. large companies.

• Offer more flexibility Offer more flexibility to patients.to patients.

• Patients pay lower Patients pay lower rates if they select rates if they select participating participating physician and physician and facilities.facilities.

MEDICAREMEDICARE • Provides care for people over age 65 and/or Provides care for people over age 65 and/or

people with a disability who has received Social people with a disability who has received Social Security for greater than 2 year.Security for greater than 2 year.

• There are 2 types of Medicare;There are 2 types of Medicare;Type A or Hospital insuranceType A or Hospital insurance - pay for impatient - pay for impatientcare and skilled nursing care. Also home healthcare and skilled nursing care. Also home healthcare. Usually funded by social security taxes.care. Usually funded by social security taxes.Type B or Medical insurance - Type B or Medical insurance - pays for physicianpays for physicianservices, outpatient care, etc. Pt. has to pay aservices, outpatient care, etc. Pt. has to pay apremium for type B. premium for type B.

• Medicare only pays 80% for all servicesMedicare only pays 80% for all services..

MEDICAIDMEDICAID

• Federally funded Federally funded health insurance health insurance for people with for people with low incomes. low incomes.

• Pays for the Pays for the health care of health care of welfare welfare recipients, and recipients, and people who are people who are blind or disabled.blind or disabled.

WORKER’S WORKER’S COMPENSATIONCOMPENSATION

• Pays both the Pays both the medical bills and medical bills and the wages for the wages for employee injured employee injured on the job. on the job. Administered by Administered by the state and the state and payments are payments are made by made by employers and employers and the sate.the sate.

CHAMPUSCHAMPUS

• Provides care for military dependents Provides care for military dependents and retired member of the armed and retired member of the armed service.service.

MANAGED CAREMANAGED CARE

• Done to ensure that health care Done to ensure that health care money is spent efficiently rather money is spent efficiently rather than wasteful. than wasteful.

• Major principle is that all health Major principle is that all health care provided to a patient must care provided to a patient must have a purpose.have a purpose.

COST CONTAINMENTCOST CONTAINMENT

• Means of trying to control the rising Means of trying to control the rising cost of health care.cost of health care.

• Attempts to do cost containment Attempts to do cost containment include;include;1.1. Bulk purchasing.Bulk purchasing.2. 2. Outpatient services.Outpatient services.3.3. Combining services and outpatient Combining services and outpatient services.services.4.4. Diagnostic Related Groups (DRGs)Diagnostic Related Groups (DRGs)

Diagnostic Related Diagnostic Related GroupsGroups

• Patients admitted to Patients admitted to hospitals are hospitals are classified in one classified in one payment group. payment group.

• Limit is placed on the Limit is placed on the cost of care.cost of care.

• If the cost of care is If the cost of care is less than the amount less than the amount paid, the agency paid, the agency keeps the extra keeps the extra money. money.

• If the cost of care is If the cost of care is more than the amount more than the amount paid, the agency must paid, the agency must accept the loss.accept the loss.