CEBS GBA Exam 2
List several recent initiatives in the US that purport (to claim, often falsely) to use market
forces to increase efficiency in the healthcare system. (Mod 1.1) - CORRECT
ANSWER-1) Employers are offering more HDHPs with some as high as $10,000. These
plans, often paired with HSAs, are coupled with the idea of transparency, or making
more info available to consumer on cost and quality. Idea is that consumers will have
more skin in game and be prudent purchasers of care with their own money.
2) ACA is creating marketplaces that employ a form of managed competition where
standardized health plans compete on cost and quality.
3) Public Medicaid and Medicare programs are moving towards requiring or making
choices available for managed care products that structure care within provider
networks.
What is the basic assumption underlying concept of a free market and how is it
challenged by the theory of "bounded rationality?" (Mod 1.1) - CORRECT ANSWER-
Assumption that rational customers will make informed decisions about value, quality
and price, while producers who meet consumer's demands will be rewarded with market
share and profit. However this is challenged by the consumer's "bounded rationality" -
rational consumer is only functional up to a certain point because choices are
constrained or bound by limited knowledge and understanding of their choices.
What are economic benefits of a free market? (Mod 1.1) - CORRECT ANSWER-If an
individual does not like their provider or health plan, the should be able to "vote with
their feet" and select other options. This choice empowers customers, regulates
producers and drives efficiency.
Describe several ways the US Healthcare market does not function like a normal
market. (Mod 1.1) - CORRECT ANSWER-Healthcare market has significant asymmetry
in information between consumers, providers and insurers. Moral hazard is a problem
because the marginal cost of covered care is zero, causing some to overconsume
medical care. Many consumers choose doctors initially by convenience, accessibility or
recommendation. Cost has also been shown to be lower on priority scale for choosing a
provider.
Indicate the approximate percentages of the population covered by major health
programs. (Mod 1.2) - CORRECT ANSWER-Largest portion of Americans (48%)
receive health insurance through an Employer, 16% through Medicaid, 15% through
Medicare, 6% purchase insurance on their own
How did ACA change Medicare? (Mod 1.2) - CORRECT ANSWER-ACA expanded
Medicare's wellness and prevention benefits, improved prescription drug coverage and
,financed experiments to control health care costs by testing alternative payment
methods and delivery systems.
How did ACA change eligibility for Medicaid benefits and how is this change affecting
the number of people who are enrolled? (Mod 1.2) - CORRECT ANSWER-ACA shifted
program eligibility from category based (ex: single parents with dependents or people
w/disabilities) to an income-based standard. Medicaid once covered fewer than half of
low-income Americans, but now ACA Medcaid expansion has been steadily increasing
enrollment, with largest increase in the states who are participating.
Explain significance of US Supreme Court case National Federation of Independent
Business v Sebelius in 2012 (Mod 1.2) - CORRECT ANSWER-ACA sought to expand
Medicaid coverage to all individuals and families with incomes below 138% of the
poverty level. US (first time) would have had a solid safety net of insurance coverage for
all lower income citizens. In the case, the court rules states could choose not to expand
(and Medicaid funding would not be withheld). By Jan 2015, 25 states chose not to
expand.
How has ACA affected number of uninsured Americans? (Mod 1.2) - CORRECT
ANSWER-Prior to ACA, 16.3% or 49.9 million Americans were uninsured. By 2014, this
number reduced to 13% and by the first quarter of 2016 to 8.6%.
Describe private health insurance coverage with regard to a) size of firm
b) HDHPs with Medical Savings Accounts
c) variability of coverage by states (Mod 1.2) - CORRECT ANSWER-a) 98% of
employers with 200+ EE's offer health insurance but fewer than 45% of firms with 3-9
EE's do so. Larger employers offer more choice of health plans than smaller employers;
small employers tend to offer POS plans that require higher EE cost sharing to go
outside network.
b) In 2006, HDHPs with medical savings accounts accounted for 4% of ER-sponsored
market, but by 2012, accounted for over 20%. In 2016, this rose to almost 30%.
c) Range of ER-based options and quality of options available vary widely by state. The
percentage of the population covered by private insurance varies as well as the options
for different types of coverage.
What are the basic differences between the four medal categories of ACA health plans?
(Mod 1.3) - CORRECT ANSWER-Bronze, Silver, Gold and Platinum plans all have
same actuarial value. However, they differ in regard to amount of deductibles,
coinsurance, other out of pocket costs and premiums. Bronze plan has lowest premium
but most out of pocket costs. Platinum plan has lowest out of pocket cost, but highest
premium.
Why is the Silver Plan the most popular choice among ACA plans? (Mod 1.3) -
CORRECT ANSWER-Majority who enroll are eligible for federal tax credit subsidies tied
to a Silver level plan. People may still select a higher cost Gold or Platinum plan, but will
,have to pay higher premiums. Cost-sharing subsidies to lower out of pocket costs are
only available to Silver plans.
Do users of ACA marketplace exchanges have many choices and does evidence
indicate they choose the most cost-effective plans? (Mod 1.3) - CORRECT ANSWER-
Ton of choices and options (ex: in TX, 15 carriers offered an average of 31 plans per
county). A consumer comparing plans may see different premiums, coinsurance and
deductibles, but plans also may differ on every measure of out of pocket costs including
physician copays, ER payments, hospital stay payments. Studies have found despite
wide range of benefits, people are not choosing most cost-effective plans....people on
average choose plan 10% more expensive than what would be optimal. Other studies
suggest limiting variation in plan designs would be choices more comprehensible (able
to understand).
What is the provision in Part D Medicare law that gives a significant benefit to
pharmaceutical companies? (Mod 1.4) - CORRECT ANSWER-Part D Medicare Law
prohibits the government from using its purchasing power to negotiate widespread
discounts with drug plans.
Do Medicare Part D beneficiaries have many choices and does the evidence suggest
they choose the most cost-effective plans? (Mod 1.4) - CORRECT ANSWER-Provide
numerous choices (ex MA has 27 standalone, TX has 32). Most people do not select
the optimal plan or take advantage of open enrollment periods to obtain a more cost-
effective plan. Few people switch plans even when it would be in their advantage to do
so.
Define each part of Medicare (A,B,C,D) and the services provided under each (Mod 1.4
- Reading) - CORRECT ANSWER-Part A = Hospital Services
Part B = Physician & Diagnostic Services
Part C = Medicare Advantage - Alternative Managed Care Option
Part D = Prescription Drugs
-Greatest choices in Part D and the Medicare Advantage Plan, which is where most of
analysis is focused on.
-C and D are paid out of pocket by recipients; A & B are funded by payroll deductions
(taxes)
What is Medicare Part C and why do some people select it? (Mod 1.4) - CORRECT
ANSWER-AKA Medicare Advantage:
-Recipients have the option to enroll in a health plan with a narrowed network of
hospitals and providers that covers Part A and B but with lower out of pocket costs.
These plans often include their own prescription drug coverage. Unlike Part D, this is a
voluntary choice and beneficiaries always have the option of going back to the
traditional plan. It is a choice to restrict options and consolidate the different elements of
Medicare, including cost sharing.
, People select these plans because of lower costs and greater care coordination. Like
Part D, Part C has significant state variation.
What have researchers found with regard to consumer benefits and efficiency of
Medicare Part C? (Mod 1.4) - CORRECT ANSWER-45 studies - in general that Part C's
HMO and PPO programs have a better record than traditional fee for service plans in
the provision of preventive services and the more efficient use of resources. Despite
high performance, a sub-group of sick beneficiaries in traditional Medicare tends to rate
their care more favorably than beneficiaries in Part C - due to easier access to
specialists. Compared to Part D (which provides a separate, uncoordinated prescription
drug benefit), choice here is less complex and could lead to greater consumer benefits
and efficiency.
Discuss consumer choices for Physicians and Hospitals in the Medicaid Program (Mod
1.4) - CORRECT ANSWER-Federal government mandates open choice to both Phys &
Hospitals; however, in the 90s, states could obtain waivers for this provision and require
Medicaid recipients to enroll in a limited-network managed care plan (most states did).
Continued movement to Medicaid Managed Care Organizations (MMCOs) - with
comprehensive coverage paid on a risk basis.
MMCOs receive a per-member, per-person payment to provide defined set of benefits
for all. Traditionally, Medicaid pays physicians much less than private insurance or
Medicare - this limits the number of physicians who may take Medicaid, which will limit
choice.
What is the difference between Medicare and Medicaid? (Mod 1.4 - Reading) -
CORRECT ANSWER-Medicare: Medicare is a federal program attached to Social
Security. It is available to all U.S. citizens 65 years of age or older and it also covers
people with certain disabilities. It is available regardless of income.
Medicaid: Medicaid is a joint federal and state program that helps low-income
individuals and families pay for the costs associated with medical and long-term
custodial care. The federal government funds up to 50% of the cost of each state's
Medicaid program, with more affluent states receiving less funding than less affluent
states. Because of this federal/state partnership, there are actually 50 different Medicaid
programs, one for each state.
Medicaid is also often used to fund long-term care, which is not covered by Medicare or
by most private health insurance policies. In fact, Medicaid is the nation's largest single
source of long-term care funding.
Summarize ACA with regard to:
1) Pay or Play Mandate
2) Minimum Level of Benefits (Mod 1.5) - CORRECT ANSWER-1) ERs with 50+ EE's
who work at least 30 Hrs/Week on Average; gives ER choice to pay or play with respect
to sponsoring EE Benefits. ER who fail to offer qualified health benefits to EEs must pay
List several recent initiatives in the US that purport (to claim, often falsely) to use market
forces to increase efficiency in the healthcare system. (Mod 1.1) - CORRECT
ANSWER-1) Employers are offering more HDHPs with some as high as $10,000. These
plans, often paired with HSAs, are coupled with the idea of transparency, or making
more info available to consumer on cost and quality. Idea is that consumers will have
more skin in game and be prudent purchasers of care with their own money.
2) ACA is creating marketplaces that employ a form of managed competition where
standardized health plans compete on cost and quality.
3) Public Medicaid and Medicare programs are moving towards requiring or making
choices available for managed care products that structure care within provider
networks.
What is the basic assumption underlying concept of a free market and how is it
challenged by the theory of "bounded rationality?" (Mod 1.1) - CORRECT ANSWER-
Assumption that rational customers will make informed decisions about value, quality
and price, while producers who meet consumer's demands will be rewarded with market
share and profit. However this is challenged by the consumer's "bounded rationality" -
rational consumer is only functional up to a certain point because choices are
constrained or bound by limited knowledge and understanding of their choices.
What are economic benefits of a free market? (Mod 1.1) - CORRECT ANSWER-If an
individual does not like their provider or health plan, the should be able to "vote with
their feet" and select other options. This choice empowers customers, regulates
producers and drives efficiency.
Describe several ways the US Healthcare market does not function like a normal
market. (Mod 1.1) - CORRECT ANSWER-Healthcare market has significant asymmetry
in information between consumers, providers and insurers. Moral hazard is a problem
because the marginal cost of covered care is zero, causing some to overconsume
medical care. Many consumers choose doctors initially by convenience, accessibility or
recommendation. Cost has also been shown to be lower on priority scale for choosing a
provider.
Indicate the approximate percentages of the population covered by major health
programs. (Mod 1.2) - CORRECT ANSWER-Largest portion of Americans (48%)
receive health insurance through an Employer, 16% through Medicaid, 15% through
Medicare, 6% purchase insurance on their own
How did ACA change Medicare? (Mod 1.2) - CORRECT ANSWER-ACA expanded
Medicare's wellness and prevention benefits, improved prescription drug coverage and
,financed experiments to control health care costs by testing alternative payment
methods and delivery systems.
How did ACA change eligibility for Medicaid benefits and how is this change affecting
the number of people who are enrolled? (Mod 1.2) - CORRECT ANSWER-ACA shifted
program eligibility from category based (ex: single parents with dependents or people
w/disabilities) to an income-based standard. Medicaid once covered fewer than half of
low-income Americans, but now ACA Medcaid expansion has been steadily increasing
enrollment, with largest increase in the states who are participating.
Explain significance of US Supreme Court case National Federation of Independent
Business v Sebelius in 2012 (Mod 1.2) - CORRECT ANSWER-ACA sought to expand
Medicaid coverage to all individuals and families with incomes below 138% of the
poverty level. US (first time) would have had a solid safety net of insurance coverage for
all lower income citizens. In the case, the court rules states could choose not to expand
(and Medicaid funding would not be withheld). By Jan 2015, 25 states chose not to
expand.
How has ACA affected number of uninsured Americans? (Mod 1.2) - CORRECT
ANSWER-Prior to ACA, 16.3% or 49.9 million Americans were uninsured. By 2014, this
number reduced to 13% and by the first quarter of 2016 to 8.6%.
Describe private health insurance coverage with regard to a) size of firm
b) HDHPs with Medical Savings Accounts
c) variability of coverage by states (Mod 1.2) - CORRECT ANSWER-a) 98% of
employers with 200+ EE's offer health insurance but fewer than 45% of firms with 3-9
EE's do so. Larger employers offer more choice of health plans than smaller employers;
small employers tend to offer POS plans that require higher EE cost sharing to go
outside network.
b) In 2006, HDHPs with medical savings accounts accounted for 4% of ER-sponsored
market, but by 2012, accounted for over 20%. In 2016, this rose to almost 30%.
c) Range of ER-based options and quality of options available vary widely by state. The
percentage of the population covered by private insurance varies as well as the options
for different types of coverage.
What are the basic differences between the four medal categories of ACA health plans?
(Mod 1.3) - CORRECT ANSWER-Bronze, Silver, Gold and Platinum plans all have
same actuarial value. However, they differ in regard to amount of deductibles,
coinsurance, other out of pocket costs and premiums. Bronze plan has lowest premium
but most out of pocket costs. Platinum plan has lowest out of pocket cost, but highest
premium.
Why is the Silver Plan the most popular choice among ACA plans? (Mod 1.3) -
CORRECT ANSWER-Majority who enroll are eligible for federal tax credit subsidies tied
to a Silver level plan. People may still select a higher cost Gold or Platinum plan, but will
,have to pay higher premiums. Cost-sharing subsidies to lower out of pocket costs are
only available to Silver plans.
Do users of ACA marketplace exchanges have many choices and does evidence
indicate they choose the most cost-effective plans? (Mod 1.3) - CORRECT ANSWER-
Ton of choices and options (ex: in TX, 15 carriers offered an average of 31 plans per
county). A consumer comparing plans may see different premiums, coinsurance and
deductibles, but plans also may differ on every measure of out of pocket costs including
physician copays, ER payments, hospital stay payments. Studies have found despite
wide range of benefits, people are not choosing most cost-effective plans....people on
average choose plan 10% more expensive than what would be optimal. Other studies
suggest limiting variation in plan designs would be choices more comprehensible (able
to understand).
What is the provision in Part D Medicare law that gives a significant benefit to
pharmaceutical companies? (Mod 1.4) - CORRECT ANSWER-Part D Medicare Law
prohibits the government from using its purchasing power to negotiate widespread
discounts with drug plans.
Do Medicare Part D beneficiaries have many choices and does the evidence suggest
they choose the most cost-effective plans? (Mod 1.4) - CORRECT ANSWER-Provide
numerous choices (ex MA has 27 standalone, TX has 32). Most people do not select
the optimal plan or take advantage of open enrollment periods to obtain a more cost-
effective plan. Few people switch plans even when it would be in their advantage to do
so.
Define each part of Medicare (A,B,C,D) and the services provided under each (Mod 1.4
- Reading) - CORRECT ANSWER-Part A = Hospital Services
Part B = Physician & Diagnostic Services
Part C = Medicare Advantage - Alternative Managed Care Option
Part D = Prescription Drugs
-Greatest choices in Part D and the Medicare Advantage Plan, which is where most of
analysis is focused on.
-C and D are paid out of pocket by recipients; A & B are funded by payroll deductions
(taxes)
What is Medicare Part C and why do some people select it? (Mod 1.4) - CORRECT
ANSWER-AKA Medicare Advantage:
-Recipients have the option to enroll in a health plan with a narrowed network of
hospitals and providers that covers Part A and B but with lower out of pocket costs.
These plans often include their own prescription drug coverage. Unlike Part D, this is a
voluntary choice and beneficiaries always have the option of going back to the
traditional plan. It is a choice to restrict options and consolidate the different elements of
Medicare, including cost sharing.
, People select these plans because of lower costs and greater care coordination. Like
Part D, Part C has significant state variation.
What have researchers found with regard to consumer benefits and efficiency of
Medicare Part C? (Mod 1.4) - CORRECT ANSWER-45 studies - in general that Part C's
HMO and PPO programs have a better record than traditional fee for service plans in
the provision of preventive services and the more efficient use of resources. Despite
high performance, a sub-group of sick beneficiaries in traditional Medicare tends to rate
their care more favorably than beneficiaries in Part C - due to easier access to
specialists. Compared to Part D (which provides a separate, uncoordinated prescription
drug benefit), choice here is less complex and could lead to greater consumer benefits
and efficiency.
Discuss consumer choices for Physicians and Hospitals in the Medicaid Program (Mod
1.4) - CORRECT ANSWER-Federal government mandates open choice to both Phys &
Hospitals; however, in the 90s, states could obtain waivers for this provision and require
Medicaid recipients to enroll in a limited-network managed care plan (most states did).
Continued movement to Medicaid Managed Care Organizations (MMCOs) - with
comprehensive coverage paid on a risk basis.
MMCOs receive a per-member, per-person payment to provide defined set of benefits
for all. Traditionally, Medicaid pays physicians much less than private insurance or
Medicare - this limits the number of physicians who may take Medicaid, which will limit
choice.
What is the difference between Medicare and Medicaid? (Mod 1.4 - Reading) -
CORRECT ANSWER-Medicare: Medicare is a federal program attached to Social
Security. It is available to all U.S. citizens 65 years of age or older and it also covers
people with certain disabilities. It is available regardless of income.
Medicaid: Medicaid is a joint federal and state program that helps low-income
individuals and families pay for the costs associated with medical and long-term
custodial care. The federal government funds up to 50% of the cost of each state's
Medicaid program, with more affluent states receiving less funding than less affluent
states. Because of this federal/state partnership, there are actually 50 different Medicaid
programs, one for each state.
Medicaid is also often used to fund long-term care, which is not covered by Medicare or
by most private health insurance policies. In fact, Medicaid is the nation's largest single
source of long-term care funding.
Summarize ACA with regard to:
1) Pay or Play Mandate
2) Minimum Level of Benefits (Mod 1.5) - CORRECT ANSWER-1) ERs with 50+ EE's
who work at least 30 Hrs/Week on Average; gives ER choice to pay or play with respect
to sponsoring EE Benefits. ER who fail to offer qualified health benefits to EEs must pay
