Health Law Business and Finance
variations in insurance-payment model
direct bill or reimbursement
variations in insurance- type of payment structure
individual, employer contribution, government sponsored -variations in degree of employer contribution (voluntary payment of employer towards insurance)
variations in insurance- degree of co-payment / deductible
individually paid out of pocket usually directed towards clinic/facility admin charges -deductible differences (the minimum to meet before a change in coverage percentage, such as 100% coverage kicks in)
Premiums
monthly or annual payments a covered individual or family pay for coverage
Economic Considerations of Insurance: Asymmetry of insurance costs
pg. 1035 -Top 1% accounts for >20% spending, top 5% accounts for 50% spending , top 20% accounts for 80% of spending -Unequal dispending of insurance coverage leads individuals in the 8-% that spend less paying for the 20% that spend more
Variations in insurance-model of insurance funding
self-insured or insured by provider
variations in insurance- model of management
self-managed or managed by insurer
Contributions
the remainder of the insurance payment paid by an employer or government entity
The Health Insurance Portability an Accountability Act of 1996
- Confidentiality obligations result from a combination of state and federal requirements and do not always require a pre-existing treatment relationship -HIPAA was originally passed to avoid "job lock" when employees left jobs and no longer had access to insurance benefits -Rules passes in 2002 and 2003 established the Privacy Rule, Security Rule, and Data Breach Notification Rule -HIPAA applies to covered entities and their business associates
Reliance in Tort
- Reliance is common in situations where an individual voluntarily undertakes a duty -If the undertaker then fails to fulfill the duty, and it negatively affects the subject of the duty, the undertaker ("Good Samaritan") can be sued
Timeline of Insurance Developments
-1950: Social security was extended to offset costs incurred by beneficiaries -1954: IRS Tax Code, Section 106: excludes employer contributions for health insurance (also permits employee insurance payments to be withdrawn pre-tax) -1965: Social Security Act Amendments of 1965: Medicare created by Johnson Administration. 1965: Part A: Compulsory hospital insurance program, Part B: voluntary physician services --Medicaid created in the same act -HMOs raised through the 1970s, resistance to limits increased PPOs through 1980s-90s -2003: Tax-advantaged Health Savings Accounts (HSAs) created as a payment option for high-deductible plans
Introduction to ERISA
-1974: the Employee Retirement Income Security Act -sets minimum standards for retirement and health plans in private industry -includes COBRA: ability to continue insurance coverage after employment "separation" -Also includes HIPAA and the Affordable Care Act
Rush Prudential HMO v. Moran (2002) Outcome
-5-4 decision - Although express preemption applies to many causes of action, it does not apply under the savings clause, which permits application of state laws that directly regulate insurance, banking, or securities -An HMO is both a health plan and is an insurer, but because HMOs have taken over most of the previous insurance business, they are regulated as insurers under state law (here, Illinois law)
The Accountable Care Organizations and Incentives
-Affordable Care Act (ACOs) 2010 -Medicare Access & CHIP Reauthorization Act of 2015 (MACRA) -Medicare Improvements for Patients and Providers Act (MIPPA) 2008 -Protecting Access to Medicare Act (PAMA) 2014
Approaching Payments
-Clinical and hospital procedures on average cost double what the government reimburses under Medicare/Medicaid (usually, hospital has to take care of the extra costs, they generally cannot pass that price onto the patient, have to find other ways to make up that money) -"Profitable" non-profits have the opportunity to reapportion profits to subsidize other losses -There is no requirement to charge the same for all procedures; frequently government, private insurance, and out-of-pocket payments -Integrated care models may improve speed, quality, and cost
Treatment to Billing: Billing & Reimburse
-Codes sent to insurers and government health plans for reimbursement -Insurers and government health plans reimburse at the predetermined rate -For plans that cover part of cost, the remaining balance is calculated and billing is sent
Informed Consent for treatment summary points
-Confirm good faith written confirmation where possible, which should be included in the patient file and is non-coercive -Discussion of risks/benefits of available treatment -Present valid standards of care (based on org standards, research, standard bearing authorities, sometimes insurance) -Emergency situations may create an exigency where informed consent is not possible
Covered Entities vs. Business Associates
-Covered entities: health care providers, health plans, health care clearinghouses -Business Associates: organizations processing electronic Protected Health Information (ePHI) on behalf of covered entities; broadly construed
Hurley v. Eddingfield (Ind. 1901)
-Doctor (who was considered to be the family doctor) will not provide medical care, individual dies. -Court says this is similar to public obligations like innkeepers, common carriers -this is a tort case- today, many issues would be subject to contract law
Where does ERISA apply/not apply practically?
-ERISA applies (with limited statutory oversight) to: Self-insured plans (employer) and fully managed plans (employer) -ERISA does not apply (government & statutory oversight) to: individually purchased plans and state, federal, and religiously managed plans
Types of Insurance- Government: Affordable Care Act
-Expanded qualification for Medicaid (133% of federal poverty level); required employers and individuals to pay government as a tax if they opted out of purchasing healthcare -supported by federal and state taxes, employers, individuals. Expected cost/annum: $ unknown, could be as much as $1 trillion (99 billion uninsured)
Relationship Formation: Explicit and Implied
-Explicit Relationship: formal admittance/assignment of a physician -Implied Relationship: physician provides treatment, contract implied in fact (quasi- contract) and, in limited cases, reliance interest (quantum meruit) -BUT "spell of illness" can limit a continuing relationship -Consider this like contract law- contracts are formed both explicitly and implicitly, but remember offer/acceptance/consideration
Types of Insurance- Government: Medicaid
-Federal and state program providing healthcare to those with financial need (qualifications vary by state and are 'category' based); 25% enrollees elderly and people with disabilities and 53% Black or Hispanic (state-selected HMO) -Supported by federal and state taxes, allocated to Medicaid, states have some flexibility in "optional" spending; broad coverage. Expected cost/annum: $597.4B
Types of Insurance- Government: Medicare
-Federal program that provides healthcare assistance if you are 65+ (regardless of income) or under 65+ with a disability -supported by federal taxes, allocated to Medicare, expected cost/annum $750.2B
Types of Reimbursement
-Fee for service: FFS- sometimes called "volume-based" reimbursement -Capitation: usually used in HMOs, PPOs, exclusive provider organizations (EPOs), payment for service to a number of covered patients -Episode-based payments (bundle payment): clinically defined episodes of care are given a "price tag" -Value-based reimbursement: VBR- financial rewards for doctors who perform better than expected (Gain Share); punishes for not performing to expectation (Risk Share)
American Medical Security, Ins. v. Bartlett (1997)
-Fourth Circuit evaluated a case to determine how broad the Savings Clause is with respect to insurers -Laws that "regulate insurance": 1. the object of the regulation "has the effect of transferring or spreading policyholder's risk", 2. "is an integral part of the policy relationship between the insurer and the insured," and 3. "Is limited to entities within the insurance industry." -If the law is not designed to regulate insurance according to Metropolitan Life case, it is preempted.
Horizontal Integration
-Frequently involves merging similar or complementary practices that offer the same level of care (e.g. clinics with clinics) -Usually involves merging between competitors -Horizontal integration for certain sizes of organizations may be blocked by the DOJ under antitrust allegations (when anti-competitive)
Wideman v. Shallowford Community Hospital (11th Cir. 1987)
-Government only uses emergency vehicles to transport to certain hospitals -"Choice of hospital" limitations are not constitutionally guaranteed. There is "no general right to medical care or treatment provided by the state" -A right extending from the 14th amendment is not unrestricted- even where the government cannot unduly restrict a right, it does not need to "realize all of the advantages of that freedom" -Where there is no general right to provisioning of medical care, there may still be a context-specific right. Duty arises only when a state or municipality exerts "coercion, dominion, or restraint," and there is a reliance interest -Here, the 11th circuit determines that no duty exists for an ambulance to transport someone to their hospital of choice because there is no duty to even have ambulance services -The 11th circuit hinges the question on a duty undertaken that not only: "A state or municipality "exercises a significant degree of custody or control over an individual.. Placing them in a worse situations than he would have been had the government not acted at all."
Types of Insurance- Private: HMO
-Health maintenance orgs are traditional insurers that indemnify costs related to healthcare. Your employer pays most of your plan, you pay some, insurer pays out. -Here, you are required to choose a primary provider -Insurance doesn't cover other visits, unless officially referred to a specialist. -Doctors paid by insurance, regardless of whether you visit them -Employees usually pay a co-payment for access to care.
Freedom of Employment- the "No Duty" Rule
-Hurley v. Eddingfield -Having a preexisting doctor is not enough- treatments are separated into "spells of illness" and even full payment tender + no alternatives is not enough -Medical license provided by the state does NOT create any obligation, though medical ethics may
Discrimination 2018 proposed rule change
-In 2018, HHS proposed a rule change for healthcare workers that received 70,000 comments and permits healthcare workers to withhold treatment or withhold treatment assistance if it does not comport with their religious convictions -this is in progress, not final
Reliance in Contract
-In promissory estoppel, an individual who reasonably relied on the promise of another to the individual's detriment, may potentially recover
Types of Insurance- Private: Fee-for-Service
-Indemnity plans where employees have absolute freedom to choose where to receive services. -Insurance pays a predetermined percentage (coinsurance- 70/30; 80/20) of the costs after a deductible is met. -Also includes "major medical plans" which are basically catastrophe insurance with high deductibles -Account-based plans (ABHPs) are high-deductible plans with a pre-tax contribution account for paying health costs
Insurer as Intermediary
-Insurers + Employers are in between the patients and healthcare providers -Available physicians, available services, care terms and costs -Provider reimbursement, standards of care, covered procedures
Treatment to Billing Overview
-Intake -Patient Encounter -Coding -Billing & Reimburse
Unique Types of Healthcare Organizations
-Integrated Delivery System (e.g. vertical integration v. horizontal integrations); frequently involves insurer contracts: --Health Maintenance Organizations (insurance-owned, managed, or highly influenced organization): definitely reduces costs, but we don't know if those reduced costs are passed on to the patient at the end of the day --Physician-hospital Organization (physician and hospitals on equal footing): more bargaining power for physicians, in some ways they are on equal footing --Affiliated contracting and partnerships: has way to get around referral issue
MACRA Changes
-MACRA enabled CMS (Centers for Medicare and Medicaid to roll out value-based initiatives for these and CHIP recipients and streamlined several different payment models into a Quality Payment Program --Merit-based incentive programs (MIPs) --Alternative Payment Models (AMPs)-Accountable Care Organizations
Medical Coding: Healthcare Common Procedure Coding (HCPS)
-Medicare requires the Healthcare Common Procedure Coding System (HCPS) -HCPS is more flexible than CPT, including ambulance rides, durable medical equipment, and prescription drugs within services performed -Some codes indicate bundled services, while others must be stacked
Rush Prudential HMO v. Moran (2002) Facts
-Moran was trying to solve a medical issue with pain and numbness and her claim was denied when she attempted to get approval for an unaffiliated specialist -Eventually, after making a written demand for an independent medical review of her claim (which never occurred), Moran sued to compel compliance. Rush Prudential responded stating that Moran's claim was preempted under ERISA.
Covered Entity Examples
-Non-profit or religious healthcare provider; for-profit healthcare provider -Telehealth provider -Clinical research partner -Insurance provider -Self-insured employee health plan -Healthcare clearing house -REQUIRES transmission of PHI
Reasons for Medical Coding
-Procedures and sub-procedures are coded both for purposes of electronic medical records (eMRs) under the Health Information Technology for Clinical Health Act (HITECH) AND for submitting to insurance and government -Without accurate coding, reimbursements may be skewed, sometimes very significantly affecting operating budget -Coding for medical procedures is very complicated and requires specialized training -There are common codes for diagnosis AND procedures- ICD-10-CM for clinical modification (diagnostic), ICD-10-PCS (procedural coding for inpatient) (World Health Organization- global codes)
Types of Insurance- Government: Veterans Affairs Health Care
-Provided to veterans of military organizations -Federal taxes. Expected cost/annum: $243.3 billion (2021 req.)
Doctor-Patient Relationship Formation
-Requires mutual assent --doctor: choice to treat patient, duty to accept patients --patient: choice of doctor, choice to treat, choice of treatment -Law thinks of it as a relationship between 2 individuals
The Efficiency/Quality Triangle
-Speed -Quality -Cost
How does Integrated Health Delivery Aim to Solve All 3 Healthcare Problems?
-Speed: referrals to see specialist usually is a little faster -Quality: ACO concept comes in; Through information sharing, clinical results, etc.-> overall quality could be better -Cost: Tends to be a little better because some organizational aspects can be shared -Could solve all 3 problems if implemented correctly, but still trying to figure out how to implement effectively
What the Affordable Care Act Changed (cont.)
-Tax penalty if an individual does not purchase insurance on the open market or not provided through employer -The ACA expanded Medicaid to 133% poverty level (after Nat'l Fed. of Indep. Business v. Sebelius) became optional for states, though tax penalty considered legitimate) -The ACA passed the "guaranteed issue" or (no disqualification limit) and "community rating" requirements, which limited discrimination based on health. King v. Burwell (2015) validated these requirements and extended tax credits to all insurances purchases. -Despite expected cost benefits, the Act increased health costs -Health care "rationing" not explicit part of the Act, and no direction of medical care or "death boards" -Despite this, the government has the potential to exert major influence via funding in Medicare and Medicaid
Medical Coding: Common Procedural Technology
-The American Medical Association created the Common Procedural Technology, which helps to explain what happened to the ICD-10-PCS inpatient procedure for describing -CPT are primarily for private insurers, whereas government plans and some third-party payers use a different coding scheme
Medical Coding: Medicaid and Medicare
-The Hierarchical Condition Category (HCC), predicts potential cost and "allocates" available money -This means that allocated funds are usually dependent on a person's health
Reliance: Emergency Rooms
-Trustees or governing board have the right to admit whoever they choose -If there is an "unmistakable emergency" there is a reliance interest on aid provided -Today, by statute, most states require emergency rooms to openly admit patients and have a duty to provide emergency medical care, and "on call" doctors typically are considered an extension of that (though it may not be a general duty)
Foundational Relationships: Healthcare Providers
-Usually have a direct relationship with patients and are responsible for delivering healthcare -Providers may be corporatized, non-profit, or even religiously oriented businesses
American Philosophy of Healthcare
-attempt to create an egalitarian model of healthcare out of a libertarian (commercial) enterprise
Foundational Relationships: Health Insurers
-collect money in the form of premiums, contributions, and in exchange make payments to healthcare providers for services rendered
Treatment to Billing: Patient Encounter
-contracting relationship -relationship formation (spell of illness) -standard of care -treatment
Duty of Care
-facilitate informed consent (for w/out; de facto breach) -exercise reasonable skill and diligence in medical activities (does not exceed abilities or specialization) -Medical activities: prescription, treatment, non-treatment, surgery, post-surgical activities
Medicare/Medicaid variations in insurance
-for medicare, percentage of government contribution after the ACA -For the ACA, private insurer variations based on risk profile (age (3x max), preexisting conditions + income)
Health Care Insurance: Government Plans
-funded by the federal and state governments -may include managed care facilities, contracted between government and private orgs
Where does informed consent apply?
-informed consent applies both in research and in treatment scenarios -the primary goal of informed consent is to enable a patient to make a "risk-based decision"
Health Care Insurance: Individually purchased Plans
-involve an insurer providing a plan to an individual purchaser -may be subsidized in part by government, as in the Affordable Care Act
Key concepts in working with vulnerable populations
-listening to the narrative and learning more about where a person"is" in that moment -working more than just "health" into the equation, such as responding to social needs and not pushing for dramatic lifestyle changes in a way that alienates -integrating technology where appropriate to enhance, rather than substitute that relationship -investing in visual communication devices -customization and personalization in care plans vs. "one size fits all" -engaging in "team-based care" to better understand the multiple facets of chronic disease
Managed Healthcare
-managed care providers- utilized by government programs, too -"medically necessary" has important meanings in managed healthcare, but may have the same or different meanings in medical malpractice -focus on cost management, quality improvement -often result in less flexibility -Include rationing by way of results/coverage -Alexander v. Chaote (1985): amongst states with increasing health care costs, rationing is a likely output -Even when applied equally, rationing without accounting for vulnerability (disability, disadvantages) can cause disproportionately negative impacts to some communities
What must an Emergency Room do under the Medical Treatment and Active Labor Act (EMTALA)?
-must provide at lease treatment and stabilizing services consistent with internal protocol and satisfactory ability to provide it, regardless of the person's ability to pay -Discrimination on the basis of payment, insurance status, national origin, race, disability, not permitted (but gender, sexual preference, etc. is permitted)
Malpractice claim defenses
-no duty (no relationship, no requirement to treat) -performed duty effectively -some other intervening cause
What the Affordable Care Act Changed
-no limitations based on pre-existing conditions ('guaranteed issue') -limitations on age-based premium costs (limited to the 3X range- 'community rating') -employer mandate- must provide affordable healthcare to 95% of full-time employees and dependents to age 26 when 50+ employees -created a healthcare marketplace (or Exchange), where consumers must shop for insurance (managed by state or federal government) -adult children 26 and under can remain on parents' insurance
What must a physician do?
-offer good medical judgment: reasonable duty of loyalty, care, and confidentiality once a patient-physician relationship has formed -do not have a duty of disclosure for costs or insurance -Physicians are not required to act in accordance with insurance coverage (e.g. medical services) -Reasonable care is often established through practice, not coverage (e.g. American Medical Association)
Treatment to Billing: Intake
-publicly funded ER obligations -state laws -EMTALA (intake + optional private transfer)
EMTALA private right defenses
-stabilized effectively, no requirement for ongoing treatment -can differentiate treatment based on individual conditions, including disability -did not have infrastructure to provide treatment -was not discriminatory
Business Associate Examples
-technology provider (e.g. electronic medical record system) -telehealth technology provider -outsourced clinical research management company -billing contract company or data aggregator -fitness and health app provider -law firm -BUT: requires access to, transmission of, storage of PHI
Mark Hall's "Making Medical Spending Decisions"
-the "mystical power of healing" -Reliance and trust-based relationships: the "fiduciary" -representation matters: a "doctor" is expected to heal more than harm -explains the placebo effect
Defining Value-Based Programs
-tied to value-based reimbursement -publicly available quality measures -risk measures and estimates -remove incentives that increase frequency of care without improving outcomes -ACOs existed with private insurers long before public funding -Often involve "bonuses" for spending below averages, which could mean better reimbursement or individual physician bonuses
Treatment to Billing: Coding
-treatment notes are coded, then entered in system which record in medical record, reimbursement, and billing systems -coding is used for reimbursement from government & health insurance
Co-Regulation of Confidentiality (federated model)
-usually extends from bodily privacy cases involving health status (balancing test) -HIPAA is just one of other federal laws compelling disclosure under some circumstances -State laws had medical confidentiality laws (And mandated disclosure laws) before HIPAA was passed; HIPAA is a floor, not a ceiling -Constitutional obligations (state & federal)-> federal laws-> state laws
Health Care Insurance: Employer-Provided plans
-usually involve employer contribution (employer pays part) -may be self-insured (employer pays claim from its own money) but managed through insurer -may be insured and managed by an insurer
Vertical Integration
-usually involves acquisition of smaller practices into larger hospital chains (14% in 2012 to 31% in 2018) -think different- you have organizations that do functionally different things -can include ownership of hospital, clinic, pharmaceutical services by an insurer -Involves different services in the healthcare supply chain, "soup to nuts," or from beginning to end of the healthcare experience -usually includes complementary services and internal referral
Common ways that someone may not have insurance
-works for an organization that doesn't provide insurance, e.g. "part time" employees or contractors -Not old enough to qualify for medicare, not qualified as disabled or under the poverty line to qualify for medicaid either as traditional medicaid or in the expanded Affordable Care Act Medicaid model -cannot qualify for financial support insurance but cannot afford direct market insurance or insurance through the healthcare exchange under the Affordable Care Act
Requirements for informed consent from research
1. Disclosure of information 2. Competency of the patient (surrogate) to make the decision 3. Voluntary nature of the decision (e.g. non-coercive) 4. Requires a full, detailed explanation of the study and potential risks (including illness, bodily damage, death)
Two approaches to these tort cases by decedents or aggrieved parties
1. Malpractice claim 2. EMTALA private right
How to approach discrimination problems?
1. Was someone harmed in a way that meets Article III standing requirements? 2. Is this an emergency service, and is this an emergency health provider? 3. Is this person's status protected under EMTALA? 4. Does an exception apply (disability, future religious objection)? 5. Was the denial of stabilization services or insufficient stabilization services the result of an individual's status? 6. Is this case in a circuit which requires intent to discriminate? Are there multiple justification for denial of services or insufficient services?
Lack of insurance concerns in the US
18k premature deaths could have been prevented, and in 2010, 50 million uninsured and underinsured taxed the system (and their own financial well-being)
Emergency Definition by EMTALA
A condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could be reasonably expected to result in placing the individual's health (or the health of an unborn child) in serious jeopardy, serious impairment to bodily functions, or serious dysfunction of bodily organs.
Malpractice Prima Facie Case
A prima facie case for malpractice is basically a negligence case with specialized duty -Plaintiff is injured (Art. III, reasonably cognizable, sufficiently particularized, non-speculative injury) -Duty "duty of reasonable care" -Breach of this duty -Breach of duty is proximate cause of plaintiff's injury
Why does PPO work?
Attempts to offer flexibility with lower-cost incentives
Types of Insurance- Private: PPO
Combines the above private insurance types: Designates preferred provider, but not restricted from seeing other providers. -lower coinsurance percentage generally for other providers -Deductibles/co-payment also apply
What is ERISA known for?
Disclosure and consent requirements for health plans, enhanced fiduciary responsibilities for employers endorsing health plan offerings or managing health plan, and heavy preemption, except for regulation of insurers
What does ERISA preemption mean?
ERISA has a higher priority than certain similar (or directly conflicting) laws, so it takes the place of those laws, even if they were written after ERISA
Disability Discrimination: Doe v. New York University (1981)
Established that section 504 prohibits discrimination when the disability is unrelated to the services in question
Disability Discrimination: U.S. v. University Hospital (1984)
Examined steps taken regarding Baby Jane Doe, who had a series of health conditions that rendered her a "handicapped individual" under the Rehabilitation Act -Succeeded by the Americans with Disabilities Act, requiring reasonable accomodations at both public and private healthcare providers (ADA)
Why do Fee-for-Service plans work?
Freedom of visits means higher cost; high cost means older, sicker individuals often opt for these plans, causing a "death spiral" that increases costs further
Foundational Relationships: Health Plan (employers)
Health plans are the offering options employers provide to their employees -most health plans are self-insured, meaning that the employers absorb the risk and an insurer operates the plans
Why do HMOs work?
Insurers underwrite a "population" of employees, which hypothetically balances risks and costs. Limiting access to physicians preselected by an insurer tips costs in the insurer's favor.
ERISA Preemption: 514 Preemption (29 U.S.C. 1144(a))
Limited Remedies preemption only remedies available for employees suing employee-sponsored plans, preempts contract, tort, fiduciary duty: "Except as provided in subsection (b) of this section, the provisions of this subchapter and subchapter III shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan described in section 1003(a) of this title and not exempt under section 1003(b) of this title."
A "Right" to Healthcare (Havinghurst perspective)
Moral right to health care being based on common human need for healthcare and dependence on it, rather than power, merit, or social worth that shapes the provisioning of healthcaree -safety net care is one of the main no-insurance models for provisioning healthcare to those who need it --however, this care is not federally mandated, and further, many of these organizations depend on donations to function --Although all Ers must provide at least stabilizing care, for some communities, no "transfer" safety net facility may be open or available
variations in insurance- type of coverage
PPO, HMO, account-based, full indemnification (employee risk profile as a pool), availability of FSA/HAS
Physicians and self-dealing
Physicians may not engage in self-dealing, such as referral fees or kickbacks either when federal reimbursement is involved or when a financial interest is involved (Anti-Kickback, Starck Act, Sunshine Act)
Wilmington General Hospital v. Manlove (Del. 1961)
Private hospital denies treatment to a sick infant, the infant dies
Managed Healthcare QALY
Quality-Adjusted Life Years (QALYs) and Well Years provide a common unit of measurement, but these can result in disproportionate impact to older adults and prevents individual choice
Reliance in EMTALA
Reliance in EMTALA is "built in" to the statute
ERISA Preemption: 28 U.S.C.1114(b)(2)(B): Deemer Clause
State may not deem organization Is engaged in the business of insurance for purposes of bringing it under state law: "Neither an employee benefit plan described in section 1003(a) of this title, which is not exempt under Section 1003(b) of this title (other than a plan established primarily for the purpose of providing death benefits), nor any trust established under such a plan, shall be deemed to be an insurance company or other insurer, bank, trust company or investment company or to be engaged in the business of insurance or banking for purposes of any law of any State purporting to regulate insurance companies, insurance contract, banks, trust companies, or investment companies."
Economic Considerations of Insurance: The Principle-Agent Problem
When a provider in a superior position in relation to an intermediary uses their position in relation to an intermediary uses their position of knowledge and information to further their interests (avoiding liability, increased revenue)
Economic Considerations of Insurance: Death Spiral
When premium costs rise, people wait longer to purchase health insurance, usually until they are sick of sicker, and healthy people opt out, which raises costs further
Economic Considerations of Insurance: Moral Hazard
When someone has insurance coverage they behave different (e.g. do not engage in self-care, consume more or better services), leading to higher premiums, requirement of copayment, limited services or process of service. -The reality of moral hazards also creates an opportunity for fraud and abuse of the medical system by health care providers