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Transcript of Health Insurance
What Is Health Insurance?
How Does It Work?
Out of pocket maximum
How is Health Insurance Industry doing ?
Why Have Health Insurance?
-Risk Financial Instability
-Have access to preventive/primary care
Effect on Economy
Increases cost of healthcare
Increases healthcare utilization
Healthcare expenditures are 17.9% of US GDP as of 2012 (World Bank)
Fundamental Problem of Scarcity:
As healthcare spending increases
Less resources available for other sectors
Effect on Labor Market
As health insurance costs rise:
Employers have less incentive to hire more people
Results in lower wage rates
Increase output per person to minimize fixed cost of health insurance per unit of output
How tax code treats health insurance
Health benefits are nontaxable compensation for employees
Deductible expenses for employer
Fixed cost for employer - costs same per employee regardless of output (hours worked)
A type of coverage that covers the cost of an insured medical and surgical expense.
The "Provider" is a clinic, hospital, doctor, labs, health care practitioner, or pharmacy
The "Insured" is the owner of the health insurance policy.
Health Care In The US vs Other Countries
US vs 10 countries
Benchmark of US
Reason for increased costs
How employers are compensating?
What does this mean to you?
Affordable HealthCare Act
Cigna's Income Statement
Employer Reaction to Obamacare
Shorter wait time before new employees qualify for health benefits
Changing retiree health benefit coverage
Percent of employees accepting health insurance from employer unchanged at 80%
Percentage of employers offering health benefits declined to 55% from 57%, although not statistically meaningful
Most likely going to see bigger changes next year when Obamacare penalties kick in
What effect does health insurance have on the quality of health care?
According to the Agency for Healthcare Research and Quality that falls under the U.S. Department of Health & Human Service, there are 5 major problems in the quality of health care. While health insurance isn’t the cause of the problems, these problems suggest that health insurance may be contributing to them
Variation in services – AHRQ states that health care practice hasn’t kept pace with the evolving science in health care to ensure evidence-based practice in the U.S. and that it is indicated by a wide variation in health care practice.
-What does this have to do with insurance?
If the treatment isn’t covered, it isn’t practiced.
Underuse of services – AHRQ states that millions of people don’t receive the necessary care and suffer needless complications that add to costs and reduce productivity.
We know that if the care isn’t covered by insurance, it isn’t administered and we also know that insurance coverage is complicated which means that medical staff spend extra time deliberating what is covered, what isn’t, and how they can bill it to the insurance company.
Overuse of Services – AHRQ states that millions of Americans receive health care services that are unnecessary, increase costs, and may even endanger their health each year.
Also, this goes back to what is covered and what is not. Remember, Doctors are good people, but they are also businesses so they will do what services are paid by insurance if they can justify it according to the rules.
According to IFLscience.com (shown on next slide), the data suggests consumers donate very proportionately to medical diseases when comparing which diseases kill the most people and which diseases get the most funding for research.