GROUP MEDICAL EXPENSE BENEFITS: THE CHANGING ENVIRONMENT CHAPTER 9

Development of Medical Expense Coverage Before the 1930s: families or charity The Blues: started by hospitals, big in the 40s Early HMOs-- started in the late 1920, but remained small until 1970s Early ins : 1930s, major med in late 40s The 1960s: government The 1970s--reactions to spiraling costs: HMO Act of 73, self-funding The 1980s and 1990s-- continued change: health care = 15% GDP; 15% population uninsured, more cost-containment focus.

HMOs and Self-funding 1980: 90% of workers in a traditional plan 1999: 85% of workers in managed care 50% of workers covered by self-funded plans 80%+ if >20,000 ees

Cost Containment and Managed Care Reasons for increasing costs Measures for cost containment plan design with cost shifting and cost containment alternative providers: HMOs, PPOs, and point of service alternate funding methods (ch 14) claims review

Cost Containment and Managed Care (cont) Health education and preventive care Encouragement of external cost-control systems Managed care

Characteristics of managed care controlled access to providers comprehensive case management preventive care risk sharing high-quality care

State Reforms States continue to take the lead in health care reform, and there is some support in Congress to allow this to continue. NAIC Small Employer Health Insurance Availability Model Act Other state reforms Tort Standardized claims administration Health Insurance Purchasing Cooperatives (HIPCs)

National Health Insurance Basic questions Does national health care exist? role of medicaid and medicare Is the objective affordability or availability? Universal coverage or universal access? Do Americans want reform? - politics Who should pay? employer mandate? What benefits should be available? Trade-off between cost containment and quality?

National Health Care: Approaches Managed competition Single payer plans (Canadian style) Medical Savings Accounts (MSAs) State owned programs Modest reform of current system Increase availability Portability Continuation

HIPAA increased portability eliminate preexisting conditions (nondiscrimination) better child coverage (CHIPs) Tax breaks for MSA and self-employed Guaranteed renewable Guaranteed issue for small employers