HPA 210

how much of GDP is healthcare

17.5%

32.3 million non-elderly persons in the US lacked health insurance

49% of this population (15.9 million) is eligible for coverage through Medicaid or subsidized marketplace coverage

the uninsured population is not evenly distributed across demographic groups.

over 30% of Hispanics lack health insurance whereas only 13.2% of whites lack coverage. Another example is 32.1% of men ages 25-34 years lack insurance whereas only 14.1% of men 55 to 64 years lack coverage

Pure Premium:

expected claims/losses.

Benchmark Plan:

for the purposes of establishing premium tax credits, an area's benchmark plan is defined as the second-least expensive Silver plan available in the market.

Readmission

for the purposes of the Hospital Readmission Reduction Program a readmission is defined as an unplanned hospitalization—to the same or a different hospital—within 30 days of discharge. Originally CMS used an "all-cause" definition of readmission which meant that regardless of the reason for the readmission hospital stays within 30 days of a discharge from an initial hospitalization were considered readmissions. More recently CMS altered its definition to allow for exceptions for planned hospitalizations. In such cases, planned hospitalizations do not count as readmissions.

Full-Time Equivalent (FTE):

in its simplest and most traditional form, one full-time equivalent equals one employee working full time or 40 hours per week. For example, if there are three employees - one working 40 hours per week, one working 30 hours per week and one working 10 hours per week - these three workers would be counted as 2 FTEs (40 + 30 + 10 = 80/40 = 2). Under the ACA, however, an FTE is defined as an employee who works an average of 30 or more hours per week for more than 120 days in a year.

biggest payment source for healthcare

1. public health insurance (39%) Medicare (20%) Medicaid (15%) 2. private health insurance (33%) 3. Out of pocket (12%)

Community Rating

ACA established adjusted community rating, which must be used by all insurance companies participating in the individual and small group marketplace.

Community Rating

All beneficiaries in a given geographic region (community) are placed in the same risk pool and charged the same premium regardless of health status or other risk factors such as age, gender, and smoking status.

Self-Insured

Conceptually the same as retrospectively experience-rated groups, but fall under ERISA statute versus state insurance laws.

RAND HIE Use of Health Care Services

Cost sharing reduced the use of almost all health services: physician visits, hospitalizations, dental visits, prescriptions and mental health treatment. Literature based off of the RAND HIE indicates that health services in general have a price elasticity of -0.2. This means for every 10% increase in price, demand for health services falls 2%.

Experience Rating Retrospective

Employer bears the risk.

Self-Insured

Employer bears the risk.

Almost all employer-sponsored health plans cover hospitalizations, physician services, prescription drugs, and mental health services (both in- and out-patient).

However, the generosity of these benefits and the number of deductibles, copays and coinsurance vary greatly from employer to employer and even from plan to plan offered by the same employer.

Manual Rating

Manual rate setting can still be used for employer-sponsored, self-insured and grandfathered plans, but will be used less under ACA.

Community Rating

Insurance company bears the risk.

Experience Rating Prospective

Insurance company bears the risk.

Manual Rating

Insurance company bears the risk.

Manual Rating

Insurance company identifies individual or group characteristic's that are associated with higher or lower claims experience then uses these characteristics to set an individual's or group's rate.

Experience Rating Prospective

Insurance company quotes future (prospective) premiums based on an employer's prior claims experience.

Experience Rating Retrospective

Insurance company works with the employer to set up a fund from which it (the insurance company) pays claims.

Predating the Civil War, sickness funds were set-up by fraternal organizations, employers and unions

Members/workers contributed to funds on a periodic basis (e.g., weekly, monthly), if they became unable to work due to sickness or injury the fund would make cash payments and in certain cases extend medical benefits to the member

Insurance status also varies by citizenship status

Noncitizens are most likely to be uninsured, followed by naturalized citizens, followed by native citizens, who are most likely to have insurance.

RAND HIE

Quality of Care Quality of care was measured by using process of care measures (versus actual clinical outcomes). The process measures examined the appropriate use of visits, diagnostic tests and therapeutic interventions. Researchers determined that cost sharing did not significantly impact quality as defined by the predetermined process of care measures.

Self-Insured

Self-insured plans do not need to comply with the ACA's adjusted community rate requirement.

Experience Rating Prospective

The ACA has relatively little impact on the use of experience rating for employer-sponsored and self-insured plans. Employer-sponsored do not need to comply with the ACA's adjusted community rate requirement.

Experience Rating Retrospective

The ACA has relatively little impact on the use of experience rating for employer-sponsored and self-insured plans. Employer-sponsored do not need to comply with the ACA's adjusted community rate requirement.

Asymmetric information is a form of information disparity. It occurs when one party has more or better information than another party.

The used car market is a commonly used example of asymmetric information.

employers paid 82% to 84% of individual coverage premiums and 72% to 74% of family coverage premiums

These contribution percentages have remained stable over the past 20 years.

how much does US spend on healthcare every year?

US spends roughly $3.1 trillion a year on health care

Medical Loss Ratio

a health plan's medical loss ratio compares the money the health plan spends on medical claims and activities to improve the quality of care versus what it spends on overhead expenses such as marketing, salaries, administrative costs, commissions and profits. The Medical Loss Ratio provision of the ACA requires most health plans that cover individuals and small businesses spend at least 80% of their premium income on medical claims and activities to improve the quality of care—or have a medical loss ratio of at least 80%.

Agents

insurance agents are insurance professionals that act as intermediaries between employers (purchasers) and the insurance company. Agents do not assess a business or determine the ideal level of coverage. It is the employer's responsibility to determine how much coverage is needed and to ensure the policy purchased meets the business' needs. Agents can be either captive (only sell policies for a single insurance provider) or independent (offer policies from several insurance providers and assist employers in comparing different insurance plans, rates, and policies). Agents are paid via commissions from the insurance companies whose products they pedal.

Brokers:

insurance brokers are licensed insurance professionals that offer a wide range of insurance products. Brokers are required to analyze a business to ensure it has the right level of coverage. Because they are more experienced, have higher credentials, and higher liability, brokers may charge an administrative fee. Additionally, brokers are compensated via commissions from the insurance companies whose products they sell.

Actuarial Value:

is the percentage of total average costs for covered services that a health plan covers. For example, Bronze plans have an actuarial value of 60%. This means Bronze plans are required to provide an average cost sharing value of 60% for covered services and enrollees are expected to pay the remaining 40% through some combination of deductibles, copays, and coinsurance. This requirement does not mean that 60% of actual costs will be covered for any one given enrollee; rather the requirement is an average across all enrollees. Individual enrollees can pay higher or lower percentages, depending on their health care needs and the terms of their health plan.

Navigators:

navigators are trained to help employers (and employees) look at coverage options offered through the SHOP Marketplace. They can help employers with their SHOP application, but cannot recommend a specific plan or complete all steps in the SHOP enrollment process. Navigators do not work for insurance companies and must provide fair, accurate and unbiased information.

Objective risk:

the difference between actual and expected loss.

Other Payers

this category comprises worksite health care, workers' compensation, vocational rehabilitation, Indian Health Services, and maternal and child health.

investment

this category consists of research, structures, and equipment

Other Public Health Insurance

this category includes CHIP (Children's Health Insurance Program) and Department of Defense and Veterans Affairs

Out-of-Pocket

this category is made up of consumer spending on deductibles, copays, co-insurance as well as goods and care not covered by insurance. It does not include insurance premiums.

Gross Premium:

total premium charged. Includes pure premium as well as additional funds to cover the cost of running an insurance company.