Health Insurance

Chapter 16

Types of insurance

• Commercial

• Blue cross

• HMO/PPO/PSO

• Medicare/Medicaid

Comprehensive Major Medical

$10,000 Coinsured Layer of CoverageInsuredpays 20%of costs up to $2000 annual out-of-pocket maximum

$1,000,000 maximumInsurer pays 100% of costs up to maximum

Insurer hospital and surgical pays 80% of costs other than hospital and surgical expenses in excess of thedeductible

80% of expensesover $5000

100% of hospital and surgical expense up to $5000

$500 deductible

Managed Care

• HMOs– Staff model– Group model– Independent practice association

• PPO/PSO cost control with flexibility

• Exemption for self insurance

HMO Contracts

• Co-pay per visit (Deductible)

• Exclusions

• No upper limits

Medicare

• Part A - Hospital insurance– Payments based on DRGs

• Part B - Supplementary medical• Medicare supplement policies• Medicare+choice

– Coordinated care– Fee for service– MSA

Current problems

• Acecss

• Cost– Aging population– Advances in technology– Defensive medicine– Capacity utilization

Insurance and healthcare costs

• Morale hazard

• Adverse selection

• Single payer plans

Access problems

• Guaranteed issue for small groups

• COBRA 1986

• HIPAA 1997

Costs

• Alternative sites

• Alternative care

• Medical savings account