Health Insurance & Healthcare Systems

Transcription

1 Chapter 11 Health Insurance & Healthcare Systems Slide Show developed by: Richard C. Krejci, Ph.D. Professor of Public Health Columbia College

2 Key Questions How much money does the United States spend on health care? What is the current government-supported health insurance plan like? What types of employment-based insurance are available? What are the extent and consequences of being uninsured and underinsured in the U.S.?

3 More Questions How can we describe the Healthcare Systems in general and the U.S. Healthcare System? How can we describe the Healthcare Systems in Canada and the United Kingdom? What conclusion can we reach from these descriptions of the U.S., Canadian and U.K. Healthcare systems?

4 The U.S. Healthcare System How can a healthcare system be evaluated (scored)? Using the National Scorecard, how does the U.S. Healthcare System compare to other developed countries? How can the costs of Health Care be controlled in the United States?

5 The Affordable Health Care Act Jorge Rios s family is without health insurance. He works two jobs, neither of which provides health insurance. He earns a total income of slightly over the federal poverty level, which in his state means the family is not eligible for Medicaid. His state has recently accepted federal funds to expand its Medicaid program as part of the ACA. Jorge was born in the United States, but his brother, who lives with the family, is undocumented. Jorge is now trying to pay off the bills for his brother s treatment when he was recently seen in the emergency department. How is this family affected by the Affordable Care Act?

6 Limits on Health Insurance The Johnson family s annual income is $300,000, so they thought they would never need to worry about money, until their son, Bob, was diagnosed with a brain tumor in He got the best available treatment. The hospital stays and the initial treatments went well and were covered by the comprehensive insurance provided by George Johnson s law firm. One day the family received a notice saying that they were approaching the lifetime cap on treatment of brain tumors. How is this family affected by the Affordable Care Act?

7 Health Care Systems International Differences Members of the Smith family live in the U.S., Canada, and the United Kingdom. They have the same inherited disease. The recommended treatment is quite similar in the three countries and can be delivered as part of primary care. How might the delivery of care and the payment for care differ between the three countries?

8 Health Care Systems Controlling Costs The politicians seem to agree that health care is too expensive. However, some argue for greater regulation while others argue for less regulation. You ask yourself: what are the options for controlling costs and what are the consequences?

9 Health Care Systems Penalties for the Uninsured You decide to take your chances and refuse the expensive health insurance offered by your employer. What are the consequences of not having insurance?

10 Important Insurance Definitions Cap Copayment Covered service Deductible Eligible Medical loss ratio Out-of-pocket cost Portability Premium

11 What are the Two Basic Types of Health Insurance? Private (commercial or non-profit) Pre-paid group (HMOs) Capitation Point of Service Plans (POSs) Fee for services rendered (PPOs) Deductibles/co-pays Public (government sponsored) Medicare (paid by Social Security benefits) Age 65+ Disabled Medicaid (State and Federally sponsored) Special financial criteria (low income, blind, disabled) State Child Health Insurance Program (SCHIP)

12 How Much Money Does the United States Spend on Health Care? The United States spends approximately $3 trillion per year on health care 18% of the gross domestic product (GDP) $9000 per person per year Other developed countries, such as Canada, the United Kingdom, France, and Japan generally spend about half as much per person and 10% or less of their gross domestic product on health care

13 A History Lesson National Comprehensive Health Insurance The Soviet Union (now Russia) implemented universal health care in 1937 and extended equal access to its rural residents in New Zealand created a universal health care system in a series of steps from 1939 to On July 5, 1948, the United Kingdom implemented its universal National Health Service. Universal health care was next introduced in the Nordic countries of Sweden (1955), Iceland (1956), Norway (1956), Denmark (1961), and Finland (1964). Universal health insurance was then implemented in Japan (1961), Saskatchewan (1962) followed by the rest of Canada ( ), and twice in Australia (1974 and 1984). Universal national health services were then introduced in the Southern European countries of Italy (1978), Portugal (1979), Greece (1983), and Spain (1986), followed by the Asian countries of South Korea (1989), Taiwan (1995), and Israel (1995). From the 1970s to 1990s, the Western European countries of Austria, Belgium, France, Germany, and Luxembourg expanded their social health insurance systems to provide universal or nearly universal coverage, as did the Netherlands (1986 and 2006) and Switzerland (1996).

14 Medicare Federal government program Primarily funded by payroll tax Provides for persons 65 and older, disabled persons eligible for Social Security disability benefits, and those with end-stage renal disease 50 million Americans are eligible

15 Medicare Has Four Different Parts Part A: covers hospital care, skilled nursing care, home health care after hospitalization, hospice care Part B: voluntary supplemental insurance that covers diagnostic and therapeutic services Part C: a program designed to encourage Medicare beneficiaries to enroll in prepaid health plans Part D: prescription drug plan open to individuals enrolled in Parts A and B

16 Medicaid Federal plus state program Designed to pay for health services for specific categories of poor people and other designated groups the disabled, children, pregnant women, etc. Covers 50 million Americans Provides for individuals in the designated groups who are below the federal poverty level Current level for a family of four is under $25,000/year

17 Medicaid In the basic program, the federal government pays a variable amount of the cost ranging from 50 to 83%, depending on the per capita income of the state These funds are meant to match the funds provided by a state based on the state s Medicaid formula To receive federal matching funding, states must provide basic services such as most inpatient and outpatient services, including preventive services

18 Medicaid States may choose to offer other services, such as drugs, eyeglasses, and transportation services, and the federal government will provide matching funds Coverage under Medicaid is quite comprehensive However, the reimbursement rates to clinicians are often comparatively low Many clinicians will choose not to participate

19 State Child Health Insurance Program (SCHIP) Administered through the Medicaid program Additional funds the states may use to enhance the health care of children Participating states may raise the income level for Medicaid eligibility, start eligibility more rapidly, and ensure longer periods of eligibility

20 What Types of Employment-Based Health Insurance Are Available? Largest single category of insurance coverage About 50% of Americans have the option to purchase this type of insurance Fee-for-service Charges paid for specific services provided As a payment system, it encourages the provision of as many services as possible

21 What Types of Employment-Based Health Insurance Are Available? Health maintenance organizations (HMOs) Charge patients a monthly fee designed to cover a comprehensive package of services Clinicians or their organizations are paid based on the number of individuals enrolled in their practice Compensation is based on capitation, or a fixed number of dollars per month to provide services to an enrolled number regardless of the number of services provided

22 What Types of Employment-Based Health Insurance Are Available? Preferred provide organizations (PPOs) Fee-for-service insurance system decides to only work with a limited number of clinicians Form the network and agree to a set of conditions that includes reduced payments Point of service plans (POSs) Patients in an HMO may choose to receive their care outside of the system provided by the health plan, but will pay more out of pocket

23 Basic Ways to Purchase Health Individual Group Insurance No one type of plan is best 36 states currently utilize the HealthCare.gov system States with lower uninsured rates have expanded their Medicaid coverage (e.g. SCHIP) Considerations Age State of health Genetic risks Future family planning (Box 11-2)

24 History on ObamaCare The Affordable Health Care Act was signed into law to reform the health care industry by President Barack Obama on March 23, 2010 and upheld by the U.S. Supreme Court on June 28, Goal was to give more Americans access to affordable, quality health insurance, and to reduce the growth in health care spending in the U.S. The fact is ObamaCare does not replace private insurance, Medicare, or Medicaid. ObamaCare does not regulate your health care, it regulates health insurance and some of the worst practices of the for-profit part of the health care industry.

25 Facts on ObamaCare Free Preventive services including yearly check-ups, immunizations, counseling, and screenings must be included on all nongrandfathered plans at no out-of-pocket costs. Many of ObamaCare's numerous provisions have already been enacted. The rest of the program continues to roll out until The Affordable Care Act contains ten titles that span over 1000 pages, but most of it's key provisions are in the first Title. Over 100 million Americans have already benefited from the new health care law. This includes more than 105 million people who accessed critical preventive services for free that had previously been subject to out-of-pocket costs, billions of dollars saved for seniors from the gradual closing of the Medicare Part D "Donut Hole", billions saved from new accountability measures for insurance companies, and much more.

26 S.C. Health Insurance Statistics 17% (2012) of South Carolinians are uninsured today 60% are hard working citizens 74% on the uninsured list state affordability as the reason they do not have insurance 78% of business in South Carolina, excluding selfemployed and government workers, have fewer than 10 employees 53% of small employers with 1-10 employees do not offer group-sponsored health insurance SC ranks 46 th in the nation in overall health of its citizens. Data taken from the SC Cover the Uninsured website (2012)

27 States with the Highest Uninsured Rates 1. Texas: 24 percent 2. Nevada: 23 percent 3. New Mexico & Florida (tie): 21 percent 5. Louisiana 20 percent 6. (tie) Alaska, California & Georgia (tie): 19 percent 9. Montana & Arizona (tie): 18 percent 11. Oklahoma, North Carolina, South Carolina, Wyoming (tie): 17 percent: 15. Mississippi: 16 percent 50. Massachusetts: 4 percent (Lowest)

28 Women and Health Insurance Women and children are disproportionately represented among all uninsured individuals Women also have difficulty assessing health care due to health coverage gaps Disparities still exist between women of color vs. white women with regards to health insurance coverage

29 Major Considerations Is it affordable? Does it cover the services you are most likely to use? What are the consequences of being uninsured? 2014 Tax penalties Only the amount of income above the tax filing threshold, $10,150 for an individual, is used to calculate the penalty 1% of your yearly household income. $95 per person for the year ($47.50 per child under 18). The maximum penalty per family using this method is $285.

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31 Prototype Health Insurance Options Fee-for-Service Classic Mixed Model HMO Classic Monthly cost to employee $400 Individual $1000 Family of 4 $1000 yearly deductible per person $200 Individual $600 Family of 4 $500 yearly deductible per person $100 Individual $400 Family of 4 No yearly deductible Choice of physician No restrictions full coverage Physicians paid "prevailing fee No restrictions, but 20% copayment for Non-network Physicians paid lower discounted fee for service Staff physicians Only Full coverage Physicians paid through capitation

32 Prototype Health Insurance Options Fee-for- Service Classic Mixed Model HMO Classic Access to specialists including OB-GYN Access without referral full coverage Access with referral full coverage Access without referral 20% copayment Access with referral only Drugs Full coverage as ordered $20 copayment for generic or approved/ formulary drugs $20 copayment for generic or approved/ formulary drugs

33 Prototype Health Insurance Options Fee-for-Service Classic Mixed Model HMO Classic Hospital Full coverage as authorized by physician 80% coverage if preauthorized by plan 100% coverage if preauthorized by plan Skilled nursing Full coverage if ordered by physicians 80% coverage if found necessary by plan 100% coverage if found necessary by plan

34 Prototype Health Insurance Options Fee-for-Service Classic Mixed Model HMO Classic Hospice 100% coverage based on physician authorization 80% coverage based on plan authorization 100% coverage based on plan authorization Preventive services Not covered 100% coverage in network 20% copayment out of network 100% coverage in network Emergency Department and out-of-area services 100% coverage Requires prior authorization except in emergencies as defined by reasonable person Requires prior authorization except in emergencies as defined by reasonable person

35 Describing the U.S. Healthcare System Category Financing Type(s) of insurance and reimbursement Description Cost over 16% of GDP and rising rapidly; Complicated mix of federal, state, employer and selfpay Employment-based insurance plus government insurance through Medicare and Medicaid provide most insurance; Mix of fee-for-service, capitation, and salary with incentives are the most commonly used methods

36 Describing the U.S. Healthcare System Category Delivery of care Comprehensiveness of insurance Description Mix of practice types with private practice dominant; Physicians: 1/3 Primary Care; 2/3 Specialists; Primary care increasingly based upon nurse practitioners and physician assistants; Hospitalists increasingly provide inpatient care; Need for better continuity of care between institutions and between clinicians 15% uninsured plus half again as many underinsured; Drug benefits included for elderly and those with comprehensive insurance; Preventive services increasing, but not comprehensive

37 Describing the U.S. Healthcare System Category Cost and cost containment Patient choice Administrative costs Description Over 16% of GNP and rising; Emphasis on competition as means of controlling costs, plus cost sharing by patients Considerable choice of primary care and often direct access to specialty care; Greatly increased access for those with comprehensive insurance High: 25 30% of total costs including administrative costs of health insurance, clinicians and institutions, but this does not include time administrative spent by patients and their families

38 Describing the United Kingdom s Healthcare System Category Financing Type(s) of insurance and reimbursement Description Budget about 7 8% of GDP has been rising Tax-supported comprehensive and universal coverage through National Health Service Private insurance system with overlapping coverage purchased as additional coverage by ~15% of the population with perception of easier access and higher quality National Health Service is single payer with capitation, plus incentives for General Practitioners, i.e. physicians responsible for panel of patients Specialists generally salaried in National Health Service and often earn substantial additional income through private insurance

39 Describing the United Kingdom s Healthcare System Category Delivery of care Comprehensiveness of insurance Description Governmental system of healthcare delivery in National Health Service including governmentowned and administered hospitals Emphasis on physicians Primary care general practitioners~<fr>2/3 Specialist physicians~<fr>1/3 General practitioners generally do not admit to hospitals National Health Service comprehensive with little cost sharing plus may cover transportation costs Incentives to provide preventive services and home care

40 Describing the United Kingdom s Healthcare System Category Cost and cost containment Patient choice Administrative costs Description Overall limit on national spending ( Global budgeting ) Negotiated rates of capitation and salary with government as single payer within National Health Service having considerable negotiating power National Health Service provides limited choice of general practitioners Waiting lines for services in National Health Service especially specialists and high-tech procedures Referral to specialists generally needed Greater choice with private insurance Greater than Canada, less than U.S.

41 How Can a Healthcare System Be Scored? National Scorecard on the U.S. Health System Standardized measurements to try to objectively measure performance in 19 developed countries Criteria: Healthy lives, Quality, Access, Efficiency, and Equity Highest score possible for each category is 100

42 U.S. Health System Performance as Compared to Best-performing Countries Area of performance U.S. score (out of 100) Healthy lives 72 Quality 71 Access 58 Efficiency 53 Equity 71 Overall score 65

43 What Are the Key Health Insurance Changes in the ACA Legislation? Encourage more comprehensive and secure health insurance coverage All insurance companies are restricted from denying coverage for preexisting conditions Renewal of insurance is now guaranteed Caps on lifetime and annual coverage eliminated Maximum out-of-pocket limits are generally required Children up to age 26 may remain on parents insurance

44 What Are the Key Health Insurance Changes in the ACA Legislation? Individual mandate Individuals are required to purchase health insurance or face an additional tax Employer mandate Employers with 50+ employees are generally required to offer affordable health insurance or pay a penalty Encourage cost sharing but limit its impact

45 What Are the Key Health Insurance Changes in the ACA Legislation? Expand Medicaid Expand to individuals who make up to 133% federal poverty level Exchanges Web-based competitive marketplaces for the purchase of health insurance Essential benefit packages included in insurance sold through the exchanges

46 What Might the U.S. Health Insurance System Look Like When the ACA Phase-In Is Completed? Greater protections for individuals and families Fewer uninsured More standardized coverage More competition in offering insurance Expansion of the exchanges Higher taxes on high-income individuals Continuing efforts to control costs

47 How Can We Describe Healthcare Systems in General? Method of financing Method of insurance and reimbursement Methods for delivering services Comprehensiveness of insurance Cost and cost containment Degree of patient choice Administrative cost

48 Health Care Costs in America How can we reduce costs? Reimbursement incentives Cost sharing Regulation Restrictions on malpractice ligation How can the U.S. market-based system be improved? Informed purchaser Enhanced purchasing power Providing multiple competing providers Improved negotiation networks

49 The End Slide show was developed by: Richard C. Krejci, Ph.D. Professor of Public Health Columbia College of SC All Rights Reserved

50 Videos PBS: Sick Around the World: How the U.S. Fares PBS: U.S. Health Care The Good News IOM: The Cost of Healthcare American Cancer Society: Access to Health Care 101 PBS: The Future of Health Care PBS: Why Does U.S. Health Care Cost so Much? Kaiser Family Foundation: Health Reform Hits Main Street CMS: Accountable Care Organizations