Health Insurance Chapter 16

Types of insurance Commercial Blue cross HMO/PPO/PSO Medicare/Medicaid

Comprehensive Major Medical $10,000 Coinsured Layer of Coverage Insured pays 20% of costs up to $2000 annual out-of-pocket maximum $1,000,000 maximum Insurer pays 100% of costs up to maximum Insurer hospital and surgical pays 80% of costs other than hospital and surgical expenses in excess of the deductible 80% of expenses over $ % of hospital and surgical expense up to $5000 $500 deductible

Managed Care HMOs –Staff model –Group model –Independent practice association PPO/PSO cost control with flexibility Exemption for self insurance

HMO Contracts Co-pay per visit (Deductible) Exclusions No upper limits

Medicare Part A - Hospital insurance –Payments based on DRGs Part B - Supplementary medical Medicare supplement policies Medicare+choice –Coordinated care –Fee for service –MSA

Current problems Acecss Cost –Aging population –Advances in technology –Defensive medicine –Capacity utilization

Insurance and healthcare costs Morale hazard Adverse selection Single payer plans

Access problems Guaranteed issue for small groups COBRA 1986 HIPAA 1997

Costs Alternative sites Alternative care Medical savings account