PUBH 6012 || ALL SOLVED.
Uncertainty correct answers people purchase health insurance to protect them from medical costs
associated with both expensive and unforeseen events: how to set the consumers burden of cost
at the right level that it encourages and makes available the proper use of health care while
discouraging imporoper usage
Risk correct answers Providers: will beneficiary experience a covered medical event?
Consumer:buy insurance to protect themselves against an unforseen event
asymmetric information correct answers causes insurance to have difficulty matching health
people with low deductible plans and health people with high deductible plans
Unhealthy consumers dont share all of the information regarding their condition with provider so
they dont get charged extra
adverse selection correct answers unhealthy people overselect a particular plan; this happens
because people at risk all buy the same plan because it is more attractive. this leaves the insurer
with a disproportionate number of high risk individuals. This leads to increase in premiums
What are the two main methods of setting premiums correct answers experience rating and
community rating
experience rating correct answers how much a beneficiary or group of beneficiaries spent on
medical services previously to determine the amount of the premium for each member or group
community rating correct answers insurers use only geography and family composition to set
rates; in modified community rating, insurers may be allowed to consider other characteristics
such as age and sex
Large Group insurance correct answers usually has cheaper rates than purchasing health
insurance individually or as part of a small group due to having an average risk rate. Carriers also
, prefer to insure large groups because most of the admin costs associated with insurance are the
same whether the carrier is covering a few people or a few thousand
Medical underwiting correct answers there are ways for insurers to predict potential future health
expenses: underwiting is whether companies are allowed to consider an applicant's medical
history or other personal information to help assess risk of healthcare needs in the future
(complicated legal question)
HIPPA (Health Insurance Protability and Accountability Act of 1996 correct answers includes an
important protection for consumers by prohibiting group health plans from excluding or limiting
otherwise qualified individuals due to preexisting conditions (before HIPPA people with
prexisting conditions could be denied health insurance)
Managed Care correct answers system that create incentives to provide fewr services and less
expensive care while still maintaing the appropriate level of healthcare quality. MCOs also
attempt to alter patients decision making through cost sharing requirements cost containment
tools utilization restrictions and free or low cost coverage for preventive care
Cost containment strategies within Managed Care Plans correct answers performance based
salary bonsues or witholdings, discounted fee schedules and capitated payments, gatekeeping
and utilization review
salary and bonuses/withholdings (provider payment cost containment strategies) correct answers
Provider receives a salary as an employee of an MCO: Costs are controlled incentive for
provider to perform fewer and/or less costly services. (MCO and provider assumes financial risk)
Discounted Fee Schedule (provider payment cost containment strategy) correct answers Provider
receives a lower fee than under GGS for each service to members. costs are controlled by pays
provider less per service rendered than under FFS (MCO assumes financial risk but also has
lower costs)
Capitation (provider payment cost containment strategies) correct answers Provider receives a
set payment per month for each member regardless of services provided. Costs are controlled by
Uncertainty correct answers people purchase health insurance to protect them from medical costs
associated with both expensive and unforeseen events: how to set the consumers burden of cost
at the right level that it encourages and makes available the proper use of health care while
discouraging imporoper usage
Risk correct answers Providers: will beneficiary experience a covered medical event?
Consumer:buy insurance to protect themselves against an unforseen event
asymmetric information correct answers causes insurance to have difficulty matching health
people with low deductible plans and health people with high deductible plans
Unhealthy consumers dont share all of the information regarding their condition with provider so
they dont get charged extra
adverse selection correct answers unhealthy people overselect a particular plan; this happens
because people at risk all buy the same plan because it is more attractive. this leaves the insurer
with a disproportionate number of high risk individuals. This leads to increase in premiums
What are the two main methods of setting premiums correct answers experience rating and
community rating
experience rating correct answers how much a beneficiary or group of beneficiaries spent on
medical services previously to determine the amount of the premium for each member or group
community rating correct answers insurers use only geography and family composition to set
rates; in modified community rating, insurers may be allowed to consider other characteristics
such as age and sex
Large Group insurance correct answers usually has cheaper rates than purchasing health
insurance individually or as part of a small group due to having an average risk rate. Carriers also
, prefer to insure large groups because most of the admin costs associated with insurance are the
same whether the carrier is covering a few people or a few thousand
Medical underwiting correct answers there are ways for insurers to predict potential future health
expenses: underwiting is whether companies are allowed to consider an applicant's medical
history or other personal information to help assess risk of healthcare needs in the future
(complicated legal question)
HIPPA (Health Insurance Protability and Accountability Act of 1996 correct answers includes an
important protection for consumers by prohibiting group health plans from excluding or limiting
otherwise qualified individuals due to preexisting conditions (before HIPPA people with
prexisting conditions could be denied health insurance)
Managed Care correct answers system that create incentives to provide fewr services and less
expensive care while still maintaing the appropriate level of healthcare quality. MCOs also
attempt to alter patients decision making through cost sharing requirements cost containment
tools utilization restrictions and free or low cost coverage for preventive care
Cost containment strategies within Managed Care Plans correct answers performance based
salary bonsues or witholdings, discounted fee schedules and capitated payments, gatekeeping
and utilization review
salary and bonuses/withholdings (provider payment cost containment strategies) correct answers
Provider receives a salary as an employee of an MCO: Costs are controlled incentive for
provider to perform fewer and/or less costly services. (MCO and provider assumes financial risk)
Discounted Fee Schedule (provider payment cost containment strategy) correct answers Provider
receives a lower fee than under GGS for each service to members. costs are controlled by pays
provider less per service rendered than under FFS (MCO assumes financial risk but also has
lower costs)
Capitation (provider payment cost containment strategies) correct answers Provider receives a
set payment per month for each member regardless of services provided. Costs are controlled by
