The U.S. Healthcare System - Chapter 3

Supplemental Security Income (SSI)

A Social Security program that makes monthly payments to people who have low income and few resources and are over age 65, blind, or disabled. In most states, beneficiaries are automatically eligible for Medicaid.

Social Security Disability Insurance (SSDI)

A Social Security program that provides monthly benefits to totally disabled individuals who have paid Social Security taxes. Beneficiaries are eligible for Medicare after receiving SSDI for two years.

insurance

A contract between an individual and a company that guarantees financial compensation as a result of an unpredicted event in exchange for a monthly or annual premium.

Disability Determination Services (DDS)

A federally funded state agency that is responsible for obtaining medical evidence from an applicant's own medical sources in support of a claim for disability insurance.

preexisting condition

A legal clause that prior to the ACA excluded significant numbers of people from private health insurance for conditions already diagnosed.

Medicaid

A needs-based government health coverage program for the poor and "medically needy," funded by a combination of federal and state taxes.

pay-for-performance

A payment arrangement that provides financial incentives to hospitals, physicians, and other healthcare providers to carry out particular improvements and achieve optimal outcomes for patients.

health spending account (HSA)

A pre-tax (i.e., not subject to federal income tax at the time of deposit) medical savings account that can be used to pay for medical expenses.

vocational expert

A professional trained to understand the vocational limitations of individuals with disabilities.

value-based model

A reimbursement model aimed to improve quality and reduce costs by creating incentives for providers to deliver high-quality rather than volume-driven care.

discounted fee-for-service

A reimbursement system in which physicians are paid for every service and test they provide based on a fee schedule or predetermined discount of the usual and customary price charged by physicians in the local area.

annual deductible

A set amount individuals have to pay out of pocket before their insurance plan begins to make coinsurance payments.

co-payment

A set fee the patient is charged for a doctor's visit, due at the time of visit.

workers' compensation

A state-administered federal program designed to protect workers injured on the job. In exchange for a predetermined level of compensation and benefits, the injured employee gives up the right to sue the employer for negligence.

Explanation of Benefits (EOB)

A summary sent to a patient after each healthcare visit, which documents what the insurance company paid the provider and how much the patient owes, and provides an up-to-date status of the patient's annual deductible and out-of-pocket expenses.

independent practice association (IPA)

A type of HMO consisting of community-based independent physicians who form a for-profit HMO.

staff model

A type of HMO that employs its own group of physicians to provide most of the healthcare needs of its subscribers and then contracts with medical specialists. These "staff" physicians do not provide services outside of the HMO, but rather receive a fixed salary and bonuses. All medical facilities are operated by the HMO, including radiology, laboratory, and pharmacy services.

Medigap

A type of insurance plan sold by private insurance companies intended to cover healthcare costs that Medicare Parts A and B do not cover.

preferred provider organization (PPO)

A type of managed care organization that has a contractual agreement with healthcare providers to put together a "provider network." The primary care physician in the PPO does not function as a gatekeeper, but instead the patient is free to go directly to a specialist within the network.

cost-sharing

An arrangement in which employees become part of their employer's group insurance plan and the employer subsidizes the monthly premiums.

risk pooling

An insurance company's calculated risk based on individual premiums in proportion to the expected risk of consumers' use of their health insurance.

point of service (POS)

Considered the "open-ended" HMO, the POS offers the consumer both an HMO and a PPO plan in one product.

Children's Health Insurance Program (CHIP)

Established in 1997 as part of the Balanced Budget Act, this program provides coverage to children (those under the age of 19, including the unborn) who are not eligible for Medicaid, but are unable to afford private insurance.

consumer-driven healthcare (CDHC)

Health plans in which employees have personal health accounts from which they pay for medical expenses directly.

Medicare

The first public insurance program created by the government to help pay for health services for those 65 and older. In 1973, it was expanded to include those individuals who are permanently disabled and can no longer work.

gatekeeping

The main strategy managed care organizations use to reduce costs by designating certain physicians to act as gatekeepers. A patient can access more specialized healthcare services only after visiting a primary care physician who acts as the gatekeeper.

coinsurance

The percentage the patient is responsible for after the insurance has paid the health professional for services provided beyond a consultation.

monthly premium

The rate an individual pays each month for a health insurance policy. Monthly premiums are based on the number of people covered, as well as the particular benefits of the plan.

federal medical assistance percentage rate (FMAP)

The rate at which the federal government funds a state's Medicaid program, which is based on a state's per capita income as compared to the national average.