Health Insurance: Public & Private Plans (Table 1 & Table 2)

Public Health Insurance (Table 1)

• Medicare Part A
  • Eligibility: Generally available to people aged 65 and older or those with certain disabilities/conditions; funded by payroll taxes; most people qualify for premium-free Part A.
  • What the plan covers: Inpatient hospital stays, skilled nursing facility care, hospice care, and some home health services.
  • Main finance sources: Federal payroll taxes (Social Security Trust Fund) and survivor/family taxes; some individuals may pay reduced premiums if not premium-free.
  • Coverage available through private or public insurance companies: Public program; Part C (Medicare Advantage) and Part D (drug coverage) are offered through private insurance companies as part of the Medicare program.
  • Coverage requires premium payments: No (premium-free for most, some may pay a premium depending on work history).
• Medicare Part B
  • Eligibility: Same as Part A (65+ or certain disabilities); separate enrollment from Part A is possible.
  • What the plan covers: Outpatient services, physician services, preventive services, durable medical equipment, and some home health services.
  • Main finance sources: General revenues and beneficiary premiums; supplementals from income-related adjustments exist.
  • Coverage available through private or public insurance companies: Public Medicare; administration and private options exist for Part C (Medicare Advantage) and Part D via private plans.
  • Coverage requires premium payments: Yes (monthly premium typically required).
• Medicare Part C (Medicare Advantage)
  • Eligibility: Must be enrolled in Part A and Part B (and typically reside where plan is offered).
  • What the plan covers: All Part A and Part B benefits, often with additional benefits (e.g., vision, dental); offered through private plans.
  • Main finance sources: Private plan premiums; government subsidies to plans; may include cost-sharing.
  • Coverage available through private or public insurance companies: Private insurance plans selling Medicare Advantage; public Medicare framework.
  • Coverage requires premium payments: Yes (monthly premium; some plans may have $0 premium items).
• Medicare Part D
  • Eligibility: Enrolled in Part A and/or Part B.
  • What the plan covers: Prescription drugs.
  • Main finance sources: Premiums paid by beneficiaries; federal subsidies and general revenues support plans.
  • Coverage available through private or public insurance companies: Private drug plans (PDPs) offered within the Medicare program; sometimes bundled in MA plans.
  • Coverage requires premium payments: Yes (monthly premium).
• Medicaid
  • Eligibility: Low-income individuals and families; pregnant individuals; people with disabilities; varies by state.
  • What the plan covers: Broad medical services; includes long-term care in many cases; coverage varies by state.
  • Main finance sources: Federal and state funds; intergovernmental transfers.
  • Coverage available through private or public insurance companies: Public program; providers may be private contractors; coordination with other insurance can occur.
  • Coverage requires premium payments: Generally No (most enrollees pay no premium); some states may require small premiums or cost-sharing.
• Veterans Affairs Health Care (VA)
  • Eligibility: Veterans who meet service requirements; eligibility for some programs based on income and service history.
  • What the plan covers: Comprehensive health services including primary, specialty, hospital care, and medications for eligible veterans.
  • Main finance sources: Federal government budget (Department of Veterans Affairs).
  • Coverage available through private or public insurance companies: Public VA system; some veterans may have private insurance in addition.
  • Coverage requires premium payments: Generally No (for eligible veterans), with some exceptions.
• TRICARE
  • Eligibility: Active-duty service members, selected Reserve members, retirees, and their dependents.
  • What the plan covers: Broad medical services, preventive care, hospital care, and pharmacy benefits (varies by plan).
  • Main finance sources: Department of Defense budget; military health system.
  • Coverage available through private or public insurance companies: Public program administered via private contractors and plans; TRICARE providers.
  • Coverage requires premium payments: Yes (monthly premiums and/or cost shares depending on status and plan).
• Indian Health Service (IHS)
  • Eligibility: American Indians and Alaska Natives; programs administered to eligible individuals.
  • What the plan covers: Public health services through IHS facilities and tribal partnerships; preventive and clinical care.
  • Main finance sources: Federal funding for IHS.
  • Coverage available through private or public insurance companies: Public system with services delivered through IHS facilities or tribally contracted facilities; sometimes private contractor arrangements.
  • Coverage requires premium payments: No.
• Federal Employees Health Benefits Program (FEHBP)
  • Eligibility: Federal employees, retirees, and dependents.
  • What the plan covers: Comprehensive private-sector health plans offered under FEHBP; wide choice of plans with varying benefits.
  • Main finance sources: Federal government contributions plus employee premiums.
  • Coverage available through private or public insurance companies: Private plans under FEHBP.
  • Coverage requires premium payments: Yes (employee and/or family premiums).

Private health insurance plans (Table 2)

• Fee-for-service
  • Gatekeeper system required?: No
  • Preferred networks?: No (providers may be out-of-network with reimbursement based on submitted charges)
  • Does plan pay for Out-of-Network providers?: Yes (often with higher cost-sharing or partial reimbursement)
  • Main advantage: Maximum freedom to choose any provider; pay-for-services model.
  • Main disadvantage: Potentially higher out-of-pocket costs; administrative burden; less cost predictability.
• Health Maintenance Organization (HMO)
  • Gatekeeper system required?: Yes (primary care physician coordinates care; referrals needed for specialists)
  • Preferred networks?: Yes (network is restricted to participating providers)
  • Does plan pay for Out-of-Network providers?: Usually No (emergency exceptions may apply)
  • Main advantage: Lower premiums and out-of-pocket costs; coordinated, preventive-focused care.
  • Main disadvantage: Limited provider choice; need referrals; potential delays in access.
• Preferred Provider Organization (PPO)
  • Gatekeeper system required?: No
  • Preferred networks?: Yes (discounted rates for in-network providers)
  • Does plan pay for Out-of-Network providers?: Yes (with higher cost sharing for out-of-network care)
  • Main advantage: Greater flexibility to see any provider; partial coverage for out-of-network care.
  • Main disadvantage: Higher premiums and cost-sharing than HMO; more complex billing.
• Point of Service Plan (POS)
  • Gatekeeper system required?: Yes ( PCP acts as gatekeeper in many POS plans )
  • Preferred networks?: Yes (network restrictions apply)
  • Does plan pay for Out-of-Network providers?: Partial coverage; costs vary
  • Main advantage: Balance between cost control and flexibility; some out-of-network access at a cost.
  • Main disadvantage: Requires referrals; out-of-network coverage is limited and more expensive.
• Integrated Delivery System (IDS)
  • Gatekeeper system required?: Typically Yes (care coordination within an integrated system)
  • Preferred networks?: Yes (network is integrated across providers within the IDS)
  • Does plan pay for Out-of-Network providers?: Limited or restricted outside the IDS network
  • Main advantage: Coordinated care, potential cost savings, streamlined services
  • Main disadvantage: Limited provider options outside the IDS network; potential for access delays if within system constraints

Connections, implications, and key ideas

• Public programs reflect a societal choice to guarantee access to essential health services; funding via taxes and government budgets influences sustainability and equity.
• Private plans illustrate market-based mechanisms, risk pooling through premiums, and cost-sharing incentives to influence care-seeking behavior.
• Gatekeeping (e.g., HMO, POS) aims to control costs and coordinate care but can affect patient autonomy and timely access to specialists.
• Networks (HMO/PPO/POS/IDS) shape affordability, provider choice, and care continuity; tighter networks often reduce costs but limit options.
• Ethical and practical considerations include equity of access, affordability, administration complexity, and potential fragmentation or integration of care across programs.
• Foundational concepts to connect with prior material: risk pooling, adverse selection, moral hazard, cost-sharing, and the role of subsidies in public programs.
• Formulas or numerical references in this transcript are not provided; if needed for exam use, insert plan-specific premiums, deductibles, and co-pays from official plan documents.