Health Insurance and Healthcare System

How Much Money Does the U.S. Spend on Healthcare?

  1. Approximately $4 trillion per year on healthcare

    1. Nearly 20% on GDP (or gross domestic product)

    2. About 1/5 spend on healthcare

    3. Over $10,000 per person per year

  2. Other developed countries generally spend less than half as much per person, or 10% or less of their GDP on healthcare. (Canada, UK, Japan, etc) \

What Types of Government-Supported Health Insurance are Available?

  1. Medicare

    1. Federal government program

    2. Primarily funded by payroll taxes

    3. Provides for persons 65 and older, disabled persons eligible for SS disability benefits, and those with end-stage renal disease

    4. Over 50 million citizens eligible

      1. Expected to be 60 million in the future

    5. 4 Parts

      1. Part A: Covers hospital care, skilled nursing care, home health care after hospitalization, and hospice care

      2. Part B: Voluntary supplemental insurance that covers diagnostic and therapeutic services

      3. Part C/Medicare Advantage: A program designed to encourage Medicare beneficiaries to enroll in prepaid health plans

      4. Part D : Prescription drug plans open to individuals enrolled in both parts A and B

  2. Medicaid

    1. Federal plus state entitlement program

    2. Pays for health services for specific categories of poor people and other designated groups: disabled, children, pregnant women, etc

      1. Covers nearly 50% of births, nearly 40% of children, and over 50% of all custodial nursing home care

    3. Provides for individuals in the designated groups who are below the federal poverty level

      1. Current poverty level for a family of 4 is $30,000 per year. About $15,600 for an individual.

    4. Basic Program, the federal government pays a variable amount of the cost, ranging from 50%-83%, depending on the per capita income

      1. Federal funds are meant to match the funds provided by a state based on the state’s Medicaid formula.

    5. To receive federal matching funding, states must provide basic services such as most inpatient and outpatient services, including preventative services

    6. States may choose to offer other services, including transportation and other services that address the SDOH, and the federal government will provide matching funds.

    7. Coverage under Medicaid is quite comprehensive; however, reimbursement rates to clinicians are often comparatively low.

      1. Many clinicians choose not to participate

    8. 10 states (including MS) chose not to expand Medicaid, causing coverage gaps (ineligible for Medicaid and can’t afford private insurance)

  3. State Child Health Insurance Program

    1. Usually administered through the Medicaid program

    2. Provides additional funds the states may use to enhance the health care of children

    3. Participating states may raise the income level

Employment-Based Health Insurance

  1. Is the largest single category of insurance coverage

    1. Nearly 50% of Americans have the option to purchase a form of employment-based insurance

  2. Free-for-Service (traditional)

    1. Charges for specific services provided

    2. As a payment system, it encourages the provision of as many services as possible

  3. Health Maintenance Organizations (HMOs) (Traditional)

    1. Charge patients a monthly fee designed to cover a comprehensive package of services

    2. Clinicians or their organizations are paid based on the number of individuals enrolled in their practice.

  4. Preferred Provider Organization (PPO)

    1. Free-for-service insurance system that works with a limited number of clinicians

    2. Forms a network of providers who agree to a set of conditions that often includes reduced payment plans

  5. Point-of-Service Plans

    1. Patients in a health plan may choose to receive their care outside of the system provided by the health plan

HealthCare Exchanges

  1. Provide an online marketplace to obtain health insurance for those not eligible for affordable forms of comprehensive health insurance, including self-employed and those working for small employers

  2. Undocumented individuals are not eligible to participate in the exchanges

Uninsured Groups Addressed by the Affordable Care Act

  1. Healthy, often young, individuals who choose not to purchase health insurance through their employer

  2. Poor or near-poor individuals who do not qualify for medicaid

  3. Self-employed persons who do not have access to affordable health insurance

  4. Employees of small companies who are not offered affordable insurance

Extent and Consequences of Being Uninsured or Underinsured

Other Programs Available for Those Disabled or Injured on the Job

  1. Complex system of federal and state programs

Describing Healthcare Systems

  1. Method of financing

  2. Methods of insurance and reimbursement

  3. Methods of delivering services

  4. Comprehensiveness of insurance

  5. Cost and cost containment

  6. Degree of patient choice

  7. Administrative costs