8/9/2019 CMN 463 Lecture 2 Insurance Medicare and Medicaid
1/18
1
HEALTH INSURANCE--
HOW TO GROW A SYSTEMJohn C. Lammers
Department of Communication
University of IllinoisCMN 463: Organizational Health Communication
8/9/2019 CMN 463 Lecture 2 Insurance Medicare and Medicaid
2/18
2
Insurance Concepts
pooled risk
moral hazard
adverse selection
8/9/2019 CMN 463 Lecture 2 Insurance Medicare and Medicaid
3/18
3
Insurance elements premiums (probability * loss)
deductibles
coinsurance
upper limits
exclusions
Insurance
8/9/2019 CMN 463 Lecture 2 Insurance Medicare and Medicaid
4/18
4
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
8/9/2019 CMN 463 Lecture 2 Insurance Medicare and Medicaid
5/18
5
Insurance
#ealth insurance example$
%rovisions$ &1'!!! deductible
!" coinsurance
&'!!! upper limit
#ospital bill$ &1!'!!! xclusion$ &1'!!!
#o much do you oe+
8/9/2019 CMN 463 Lecture 2 Insurance Medicare and Medicaid
6/18
6
Insurance
xample' continued$ timing matters
A B C
,pper limit Coinsurance -eductible
-eductible -eductible Coinsurance
Ins$./!!0!! 0!!
2ou$01!! .3!! ..!!
8/9/2019 CMN 463 Lecture 2 Insurance Medicare and Medicaid
7/18 7
The Medicare benefit
ac!a"e benets nanced primarily by
payroll taxes
general tax revenues beneciary premiums
beneciaries responsible for paying aportion of the cost of most coveredservices -eductibles coinsurance4
8/9/2019 CMN 463 Lecture 2 Insurance Medicare and Medicaid
8/18 8
The Medicare benefit
ac!a"e limited to acute care services and
prescription drugs needed for diagnosisor treatment of illness or in5ury4
coverage through traditional program ora private health insurance plan 6edicare7dvantage (67) (aka %art C)4
8raditional 6edicare covers services in
three parts9 hospital insurance program (%art 7)'
9 supplemental insurance program (%art :)9 prescription drug benet (%art -)4
8/9/2019 CMN 463 Lecture 2 Insurance Medicare and Medicaid
9/18
8/9/2019 CMN 463 Lecture 2 Insurance Medicare and Medicaid
10/18 10
The Medicare benefit
ac!a"e %art - covers outpatient prescription drugs not
covered under %art :' also voluntary beneciaries must have at least to prescription
drug plans to choose from in their region responsible for a premium that depends on the
plan they choose premiums fully subsidized if their income is belo
10" of @%A and assets are less than &3'B!
(single) &1B'1/! (married) premiums partially subsidized on sliding scale forbeneciaries if income above 10" and belo10!" of the @%A and assets less than &11'31!(single) or &B'.1! (married)4
8/9/2019 CMN 463 Lecture 2 Insurance Medicare and Medicaid
11/18
11
The Medicare benefit
ac!a"e 67 program$ receive 6edicare benets by enrolling
in participating private plans health maintenance organizations' preferred provider
organizations' or private fee
8/9/2019 CMN 463 Lecture 2 Insurance Medicare and Medicaid
12/18
12
8/9/2019 CMN 463 Lecture 2 Insurance Medicare and Medicaid
13/18
13
8/9/2019 CMN 463 Lecture 2 Insurance Medicare and Medicaid
14/18
14
6edicaid elementsDelfare$ assistance for the poor
eligibility$ 7@-C
;;I (agedEdisabledEblind) varies by state
generally single services
Medicaid
8/9/2019 CMN 463 Lecture 2 Insurance Medicare and Medicaid
15/18
15
Medicaid continued$
benets$no balance billing
no deductibles
no copayments
7dministration$
@ederal government 00" funds (generalrevenues)
all states except 7rizona
much variability
8/9/2019 CMN 463 Lecture 2 Insurance Medicare and Medicaid
16/18
16
%rospective payment determined in advance of services
for hospitals$ -J>s
for physicians$ :=;
Mana"ed Care
8/9/2019 CMN 463 Lecture 2 Insurance Medicare and Medicaid
17/18
17
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
8/9/2019 CMN 463 Lecture 2 Insurance Medicare and Medicaid
18/18
18
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