Overview of Health Care
Healthcare Policy & Regulation (HC320)
Instructor David Martini
April 06, 2015
Good health insurance can be expensive, and is therefore often out of reach for lower and moderate income families, particularly if they are not offered health benefits through work. To make coverage obtainable for families that otherwise could not afford it and to encourage broad participation in health insurance, the Affordable Care Act (ACA) includes provisions to lower premiums and out-of-pocket costs for people with low and moderate incomes. The adequacy of this assistance will be key determinants of how many people ultimately gain coverage and whether or not lower-income people will be able to use the health insurance they obtain. In the United States, health care providers (such as doctors and hospitals) are paid by the following; Private Insurance, Government Insurance Programs, and/or People (personal, out-of-pocket funds). In addition, the government directly provides some health care in government hospitals and clinics staffed by government employees. Examples of government funded facilities are the Veteran's Health Administration and the Indian Health Service. Private insurance can be purchased from for-profit and non-profit insurance companies. Affordable Care Act (ACA)
There are many health insurance companies in the United States, a given state tends to have a limited number and most private insurance is purchased by corporations as a benefit for employees. Costs are typically shared by employers and employees and the amount of money employers spend on an employee's health insurance is not considered taxable income for the employee. In effect, the government is subsidizing this insurance to some degree, because the government enables employees to spend less on health care, they may use health care services more, but some experts may think this arrangement increases health care costs. People may also purchase private health insurance themselves. Currently, unlike in employer-provided policies, privately purchased policies typically require applicants to be extensively evaluated. Insurance companies can then identify and reject applicants who are likely to require expensive care, including those who have certain preexisting disorders or who are likely to develop certain disorders. Many applicants are denied policies, Twenty-two percent of applicants nationwide aren't approved for individual and family health plans, usually because of pre-existing medical conditions, says the HealthPocket report, "Health Insurance Application Rejection Rates Rising?” Some cannot purchase private insurance at any price. For applicants who do qualify, costs can be much higher for a given policy than when it is purchased through a company or another large group. “Part of the reason is high administrative costs, which often make up more than 25% of the total cost of health care” (Trivedi).
The Affordable Care Act will prevent individual and group health insurance plans from denying coverage based on preexisting health conditions and from dropping coverage of people who have required costly care (termed rescission). The act will require companies to spend at least 80% of premium dollars on medical care (and not overhead). It will require people who do not have insurance coverage and who are not eligible for government insurance to purchase private insurance. The largest government insurance programs include Medicare which funds health care for the elderly, the disabled, and people receiving long-term treatment with dialysis. Medicaid which funds health care for certain people who are living below the poverty level and/or who have disabilities. Medicare Secondary Payer (MSP) is the term generally used when the Medicare program does not have primary payment responsibility that is, when another entity has the responsibility for paying before Medicare. When Medicare...
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