Public Health 150D Midterm #1 || WITH 100%
CORRECT SOLUTIONS!!
Premium correct answers a certain amount a person pays monthly to an insurance plan.
Deductible correct answers A specific amount of money that needs to be spent (annually)
before a patients health insurance kicks in.
Co-payment correct answers Fixed amount paid per visit; does not count toward deductibles.
Co-insurance correct answers You share the cost of services after you meet your deductible.
For example, if you have a plan that requires you to pay 20%, if you have a $100 visit after
you meet your deductible, you would pay 20% ($20) while the plan would pay 80% ($80).
Out of pocket correct answers Money a person has to pay after health insurance.
Capitation correct answers Service provider (can be physician or health plan) receives a fixed
sum per patient and must provide all necessary care
Who is at Risk? Provider is at risk!
Who is in favor? Employers
Incentive? Keep costs low, and people health. Keep Money.
Fee for Service (FFS) correct answers Fee for every procedure Doc did --> Leads to overcare.
Indemnity Plans correct answers Indemnity plans are plans that protect (or indemnify) the
patient, plan, and provider. Essentially, the process of using an indemnity plan could go as
follows: a patient goes to the doctor, pays the fee out of pocket, informs the insurance
company of the cost, is reimbursed for the cost, and the insurance company is in turn
reimbursed by the employer.
INCEN: Providers do more services.
LIKE: Patients, Doc, insurance b/c risk goes to employer.
RISK: employers, switched because too much money.
Experience Rating correct answers The experience rating is a system used to set the premium
to be paid by the insured based on the risk to the company of providing insurance. For
example, the company might look at the cost of care in the previous accounting period, and
use that cost to determine the premium for the next accounting period or fiscal year.
Employer Based Insurance "Accident of History" Employer Based Coverage correct answers
During the Depression, hospitals had a hard time staying open as people could not afford
care. They established "Blue Cross" programs where people could pay a monthly amount (a
"premium") in case they would need hospital care. These were not-for-profit programs, and
while premiums were paid in anticipation of care patients may eventually need, they still
helped cover hospital costs in the meantime. Doctors followed suit with the "Blue Shield"
program.
, Health Care as a Fringe Benefit correct answers cap on wage, employers incentive to add
fringe benefits to employee package. ( No taxes on Benefits)
Employee Cost Sharing correct answers Individual pay premiums, deductibles, co-payments,
and insurance --> B/c not everything can be covered now.
Premiums and deductibles can be taken out of salaries
Employers are asking for individuals to pay more
Share of premium
Annual deductible
Co-payment or Co-insurance
Gaps: Why a person might not be able to get employer based insurance ? correct answers 1.
Employers not required to give out health insurance.
2. Part time vs full time worker.
3. Unemployed or Self Employed
a. Underwriting (pre-exisiting conditions)
b. Cherry picking (healthy patients)
Managed Care--> Movement for cost control, narrow networks correct answers HMOs-
contracts with a network of doc/hosp which negotiates rates w/insurance
Preferred Provider Organization (PPOs) - hybrid of HMO and indemnity.
HMO-Capitation correct answers Employer/consumer pays $ per member per month/year to
HMO. HMO contracts with set network of providers and hospitals. Patient is covered if they
seek care in network. HMO is obligated to provide all necessary care.
More narrow capitation, provider incentivized to be more efficient, cherry pick healthy
patients, keep patients healthy
Who's at Risk ? Physicians
-MOST RESTRICTIVE (Narrow Network of providers) Least expensive premiums
Who likes : Employers like because pay is a fixed amount.
Preferred Provider Organizations correct answers Hybrid of HMO and indemnity
- Contracts with a network of doc/hosp which negotiate rates w/ insurance
PPO covers most/all $ if patient stats in network: if out, plan pays smaller %
-INCEN: no $ containment, consumers pay more to get more choices, emplyers cap their
costs
LIKE: patient (get more choice than HMO) & employers (pay fix amount) & provider
RISK: plan and patients (If they get out of network)
Utilization Controls correct answers ways care is "managed" - emerged w/ new for-profit
HMOs.
i. GateKeepers
ii. Networks of Contract Physicians
iii.Utilization Review
iv. Financial Incentives
CORRECT SOLUTIONS!!
Premium correct answers a certain amount a person pays monthly to an insurance plan.
Deductible correct answers A specific amount of money that needs to be spent (annually)
before a patients health insurance kicks in.
Co-payment correct answers Fixed amount paid per visit; does not count toward deductibles.
Co-insurance correct answers You share the cost of services after you meet your deductible.
For example, if you have a plan that requires you to pay 20%, if you have a $100 visit after
you meet your deductible, you would pay 20% ($20) while the plan would pay 80% ($80).
Out of pocket correct answers Money a person has to pay after health insurance.
Capitation correct answers Service provider (can be physician or health plan) receives a fixed
sum per patient and must provide all necessary care
Who is at Risk? Provider is at risk!
Who is in favor? Employers
Incentive? Keep costs low, and people health. Keep Money.
Fee for Service (FFS) correct answers Fee for every procedure Doc did --> Leads to overcare.
Indemnity Plans correct answers Indemnity plans are plans that protect (or indemnify) the
patient, plan, and provider. Essentially, the process of using an indemnity plan could go as
follows: a patient goes to the doctor, pays the fee out of pocket, informs the insurance
company of the cost, is reimbursed for the cost, and the insurance company is in turn
reimbursed by the employer.
INCEN: Providers do more services.
LIKE: Patients, Doc, insurance b/c risk goes to employer.
RISK: employers, switched because too much money.
Experience Rating correct answers The experience rating is a system used to set the premium
to be paid by the insured based on the risk to the company of providing insurance. For
example, the company might look at the cost of care in the previous accounting period, and
use that cost to determine the premium for the next accounting period or fiscal year.
Employer Based Insurance "Accident of History" Employer Based Coverage correct answers
During the Depression, hospitals had a hard time staying open as people could not afford
care. They established "Blue Cross" programs where people could pay a monthly amount (a
"premium") in case they would need hospital care. These were not-for-profit programs, and
while premiums were paid in anticipation of care patients may eventually need, they still
helped cover hospital costs in the meantime. Doctors followed suit with the "Blue Shield"
program.
, Health Care as a Fringe Benefit correct answers cap on wage, employers incentive to add
fringe benefits to employee package. ( No taxes on Benefits)
Employee Cost Sharing correct answers Individual pay premiums, deductibles, co-payments,
and insurance --> B/c not everything can be covered now.
Premiums and deductibles can be taken out of salaries
Employers are asking for individuals to pay more
Share of premium
Annual deductible
Co-payment or Co-insurance
Gaps: Why a person might not be able to get employer based insurance ? correct answers 1.
Employers not required to give out health insurance.
2. Part time vs full time worker.
3. Unemployed or Self Employed
a. Underwriting (pre-exisiting conditions)
b. Cherry picking (healthy patients)
Managed Care--> Movement for cost control, narrow networks correct answers HMOs-
contracts with a network of doc/hosp which negotiates rates w/insurance
Preferred Provider Organization (PPOs) - hybrid of HMO and indemnity.
HMO-Capitation correct answers Employer/consumer pays $ per member per month/year to
HMO. HMO contracts with set network of providers and hospitals. Patient is covered if they
seek care in network. HMO is obligated to provide all necessary care.
More narrow capitation, provider incentivized to be more efficient, cherry pick healthy
patients, keep patients healthy
Who's at Risk ? Physicians
-MOST RESTRICTIVE (Narrow Network of providers) Least expensive premiums
Who likes : Employers like because pay is a fixed amount.
Preferred Provider Organizations correct answers Hybrid of HMO and indemnity
- Contracts with a network of doc/hosp which negotiate rates w/ insurance
PPO covers most/all $ if patient stats in network: if out, plan pays smaller %
-INCEN: no $ containment, consumers pay more to get more choices, emplyers cap their
costs
LIKE: patient (get more choice than HMO) & employers (pay fix amount) & provider
RISK: plan and patients (If they get out of network)
Utilization Controls correct answers ways care is "managed" - emerged w/ new for-profit
HMOs.
i. GateKeepers
ii. Networks of Contract Physicians
iii.Utilization Review
iv. Financial Incentives
