Title: HCA 701: Paying for Health Care
1HCA 701 Paying for Health Care
- Private Insurance, Medicare, Medicaid Managed
Care
2RESOURCES NEEDED TO MAINTAIN A HEALTH CARE
DELIVERY SYSTEM
Financing
Health Care Delivery System
Technology Supplies
Healthcare Professionals
Facilities
Source Williams and Torrens, Introduction to
Health Services, 2002
3Payment sources and where the money goes
- Hospital care 33
- Physician care 23
- Nursing home care 9
- Prescription drugs 9
- Other spending 26
4Health Insurance vs. Other Insurance
- Other Insurance
- Loss is to be avoided
- Losses are intended to be independent events
- Loss should be something for which we cant
adequately budget
- Health Insurance
- Ill health cant be avoided
- Many illnesses imply a great degree of dependency
among the insured losses - First dollar base / major medical health plans
violate this tenet.
5Taxonomies of Health Insurance
- Basic employee coverage
- The second taxonomy includes the type of
insurance provided - Commercial carriers
- Blue Cross/Blue Shield
- Self funded plans
- Cost shifting to private plans
- Cost shifting to uninsured
- Funding mechanism
6Increases in Health Insurance Premiums compared
to other Indicators
7 of Firms Offering Health Benefits, by Firm Size
8Health Maintenance Organizations
- Began in 1929
- HMO Act of 1973
- Growth has slowed somewhat due to more enrollment
in PPOs - Guarantee provision of specific services
9Medicare
- Title XVIII of the Social Security Act, "Health
Insurance for the Aged and Disabled" is commonly
known as Medicare began in 1966. - Elderly aged 65 and over
- Disabled individuals entitled to Social Security
benefits - End stage renal disease.
10Medicare Part A Coverage (Hospital Insurance)
- 90 days of inpatient care in a benefit period
- No limit to number of benefit periods
- Use of Medigap (about 75 of beneficiaries)
- Lifetime reserve of 60 days of care once 90 days
are exhausted - 100 days of post-hospitalization in skilled
nursing facility (or rehab) - Home health agency benefits
11Part B Supplementary Medicare
- 95 beneficiaries enrolled in Part B
- Coverage optional
- Requires beneficiary to meet set deductibles
(Medicaid programs pay premiums for qualified
Medicaid enrollees who qualify for Medicare)
12Medicare Provider Reimbursement
- Hospitals
- Physicians
- Beneficiaries can join Medicare HMOs
- Catalyst system for new prescription drug benefit
of Medicare - Private insurance participate in supplemental
policies (most include managed care plans)
13Medicare Regulatory Initiatives
- Tax Equity and Fiscal Responsibility Act (TEFRA)
- Prospective Payment System creates DRGs
- Resource based relative value scale (RBRVS)
14Medicare Prospective Payment System
- Standardized payment amount
- DRG weights
- Outliers
- Quality Indicators
- Churning multiple admissions for same patient
with same diagnosis - Skimming taking more profitable less severely
ill - Reducing length of stay, procedures, etc which
may affect morbidity and mortality. - Financial performance
15Medicare Prescription Drug, Improvement and
Modernization Act of 2003
- Allows elderly and disable beneficiaries to
enroll in private plans that contract with
Medicare for drug benefit. - Two types of plans
- Prescription Drug Plan (PDP)
- Medicare Advantage (MA)
- Plan is an enticement to get more enrollees in
Medicare Managed Care - Beneficiaries must pay monthly premium and
deductible
16Medicare Rx Drug Benefit
- HHS expects 29.3 million to enroll in Medicare
drug plans - 10.9 million beneficiaries will receive
low-income subsidies - 9.8 million will have drug benefits through their
employers
17Drug Benefit Cost Sharing
2006 2010 2014
Average monthly premium 32.20 48.49 64.26
Annual deductible 250 331 437
Coverage gap 2,850 3,774 4,984
18Medicare Rx Drug Benefit
19U.S. Medicaid Enrollment (A Federal Perspective)
- The largest health insurance program in the
United States. - Provides coverage for more than 50 million poor
and disabled Americans. - Spending is in excess of 300 billion a year.
- Accounts for 20 percent of national health care
spending. - Without it, the ranks of Americas uninsured
would swell to more than 90 million, 1 of every 3
citizens.
20Medicaid
- Enacted with Medicare as Title 19 of the Social
Security Act in 1965 - Joint program financed between the Federal and
State Governments through use of matching funds
for - Categories of individuals that could be covered
- Categories of benefits that could be covered
- Today, 35 million people in low-income families,
predominately children and pregnant women.
21Medicaid
- Dual-Eligibles Supplements Medicare providing
prescription drugs and long-term care services
for over 6 million low-income Medicare
beneficiaries - Guaranteed entitlement to states and to
individuals. - States entitled to Federal financing when they
cover the populations eligible for coverage
services they expend state dollars for on behalf
of that population, - Entitlement to individuals through automatic
income eligibility - No enrollment caps or limits on the coverage.
- Medicaid accounts for 43-44 of all Federal
dollars that go to states in the form of grants
and aid.
22Differences in Eligibility by State
- Eligibility for services differ State by State in
amount, duration, or scope of services - State legislatures may change Medicaid
eligibility, services, and/or reimbursement
during the year. - Medicaid consists of 56 distinct state-level
programs with federal guidelines, but
administered state agencies
23Minimum Eligibility Requirements
- Must meet aid to Families with Dependent Children
(AFDC) or--at State option--more liberal
criteria. - Children under age 6 whose family income is at or
below 133 percent of the Federal poverty level
(FPL). - Pregnant women whose family income is below
133 percent of the FPL (services to these women
are limited to those related to pregnancy,
complications of pregnancy, delivery, and
postpartum care). - Supplemental Security Income (SSI) recipients in
most States - Recipients of adoption or foster care assistance
under Title IV - Special protected groups
- All children born after September 30, 1983 who
are under age 19, in families with incomes at or
below the FPL. - Certain Medicare beneficiaries
24Medicaid Funding Match
- Federal government matches state Medicaid
spending for medical assistance state per capita
income formula. - Federal contribution ranged from 50 77 cents of
every state dollar spent on medical assistance in
fiscal year 2004, including - Medicaid administrative costs (50 federal match)
- Skilled professional medical personnel engaged in
program integrity activities (as much as 75)
25Nevada Medicaid Enrollment (A State Perspective)
- Adults with children
- Children make up the largest portion of the
population - The elderly and disabled recipients
- Account for 75 of total expenditures.
- Biggest increase in expenditures, but smallest
increase in enrollment
26Nevada Medicaid Enrollment
27Recent Federal Actions
- Federal GAO placed the Medicaid Program on the
2003 list of programs at high risk for fraud,
waste, abuse and mismanagement. - The GAO specifically recommended Congress curb
state financing schemes, such as
Intergovernmental Transfers (IGTs).
28Medicaid The Impact on Business
- There is a growing impact on the General Fund.
- The impact is significant because it means far
fewer resources available for other state funded
programs that are essential for commerce and
economic growth. - Medicaid siphons dollars from education and
transportation - Economic multiplier effect.
29Medicaids Impact Health Insurance
- National trends propose eligibility limits and/or
reducing providers rate of payment. - Both approaches increase the amount of
uncompensated care and costs are allocated to
private health insurance premiums through cost
shifting. - The affordability of providing health care
benefits to employees in the private sector
creates a burden on business.
30The Balanced Budget Act of 1997
- Subtitle H Medicaid
- The law contains a dramatic expansion in state
authority with respect to the use of managed
care. - It enables states to require most Medicaid
beneficiaries to enroll in managed care
organizations (MCOs) without obtaining a waiver.
31Waivers Managed Care Growth
- Managed care programs seek to enhance access to
quality care in a cost-effective manner. - Waivers may provide the States with greater
flexibility in the design and implementation of
their Medicaid managed care programs. - Waiver authority under sections 1915(b) and 1115
of the Social Security Act is an important part
of the Medicaid program. - Section 1915(b) waivers allow States to develop
innovative health care delivery or reimbursement
systems. - Section 1115 waivers allow Statewide health care
reform experimental demonstrations to cover
uninsured populations and to test new delivery
systems without increasing costs. - Finally, the BBA provided States a new option to
use managed care. - The number of Medicaid beneficiaries enrolled in
some form of managed care program is growing
rapidly, from 14 percent of enrollees in 1993 to
58 percent in 2002.
32Medicaid Managed Care Program Successes
- Managed care is the prevalent delivery system in
Medicaid, with 59 percent of beneficiaries
receiving some or all care through managed care
instead of fee-for-service. - Forty-eight states, the District of Columbia and
Puerto Rico operate Medicaid managed care
programs, with about 23.1 million beneficiaries
enrolled in 2002, an increase of over two million
since 2001. - Enhancing access to providers and emphasizing
preventive and routine care, health plans have
successfully improved the quality of care
received by enrollees in the Medicaid managed
care program.