Financing Health Care United States Healthcare

PRIVATE INSURANCE Pays for all or part of a person’s health care Pays for all or part of a person’s health care People pay a premium. People pay a premium. Premium = monies paid for insurance contract. Premium = monies paid for insurance contract. Deductible = predetermined amount that the insured must pay each year before the insurance company will ay for an illness or injury. The amounts vary and are stated in the policy. Deductible = predetermined amount that the insured must pay each year before the insurance company will ay for an illness or injury. The amounts vary and are stated in the policy.

Answer the following: If you pay $200 a month for your health insurance and have a deductible of $150 what is your premium? If you pay $200 a month for your health insurance and have a deductible of $150 what is your premium? What would be the maximum amount you would have to pay a year? What would be the maximum amount you would have to pay a year? Your Premium is $200 Your Premium is $200 Your maximum out of pocket expense is $ Your maximum out of pocket expense is $ Questions? Questions?

HEALTH MAINTENANCE ORGANIZATIONS (HMO) Provide health care services for prepaid fee. Provide health care services for prepaid fee. Stress prevention. Stress prevention. Would rather treat early or before person is ill to prevent costly treatment and diagnostic tests. Would rather treat early or before person is ill to prevent costly treatment and diagnostic tests. Disadvantage is that limitations are placed on which doctors and facilities you can use. Disadvantage is that limitations are placed on which doctors and facilities you can use.

PREFERRED PROVIDER GROUP A group of doctors or hospital that agree to provide health care at a reduced rate. A group of doctors or hospital that agree to provide health care at a reduced rate. Usually offered by large companies. Usually offered by large companies. Offer more flexibility to patients. Offer more flexibility to patients. Patients pay lower rates if they select participating physician and facilities. Patients pay lower rates if they select participating physician and facilities.

MEDICARE Provides care for people over age 65 and/or people with a disability who has received Social Security for greater than 2 year. Provides care for people over age 65 and/or people with a disability who has received Social Security for greater than 2 year. There are 2 types of Medicare; There are 2 types of Medicare; Type A or Hospital insurance - pay for impatient care and skilled nursing care. Also home health care. Usually funded by social security taxes. Type B or Medical insurance - pays for physician services, outpatient care, etc. Pt. has to pay a premium for type B. Medicare only pays 80% for all services. Medicare only pays 80% for all services.

MEDICAID Federally funded health insurance for people with low incomes. Federally funded health insurance for people with low incomes. Pays for the health care of welfare recipients, and people who are blind or disabled. Pays for the health care of welfare recipients, and people who are blind or disabled.

WORKER’S COMPENSATION Pays both the medical bills and the wages for employee injured on the job. Administered by the state and payments are made by employers and the sate. Pays both the medical bills and the wages for employee injured on the job. Administered by the state and payments are made by employers and the sate.

CHAMPUS Provides care for military dependents and retired member of the armed service. Provides care for military dependents and retired member of the armed service.

MANAGED CARE Done to ensure that health care money is spent efficiently rather than wasteful. Done to ensure that health care money is spent efficiently rather than wasteful. Major principle is that all health care provided to a patient must have a purpose. Major principle is that all health care provided to a patient must have a purpose.

COST CONTAINMENT Means of trying to control the rising cost of health care. Means of trying to control the rising cost of health care. Attempts to do cost containment include; Attempts to do cost containment include; 1.Bulk purchasing. 2. Outpatient services. 3.Combining services and outpatient services. 4.Diagnostic Related Groups (DRGs)

Diagnostic Related Groups Patients admitted to hospitals are classified in one payment group. Patients admitted to hospitals are classified in one payment group. Limit is placed on the cost of care. Limit is placed on the cost of care. If the cost of care is less than the amount paid, the agency keeps the extra money. If the cost of care is less than the amount paid, the agency keeps the extra money. If the cost of care is more than the amount paid, the agency must accept the loss. If the cost of care is more than the amount paid, the agency must accept the loss.