Search
  • Charith Ratnayake

US HEALTHCARE - The Crash Course



Essential Healthcare Vocabulary:


Deductible: a specified amount of money that the insured must pay before an insurance company will pay a claim.


Premium: the amount of money an individual or business pays for an insurance policy.


Co-Pay: monetary charge that your health insurance plan may require you to pay in order to receive a specific medical service or supply.


UNITED STATES HEALTHCARE: A PRIMER


United States healthcare is a complex beast. There are multiple components, each operated in a different manner. The three main parts include: Medicare/Medicaid/CHIP, private insurance, and the Veterans Health Administration. These parts are not mutually exclusive, and many citizens are covered by multiple parts. For example, many medicare beneficiaries have private supplementary insurance.



MEDICARE:



What is it: A nationally funded social insurance program that covers seniors mainly over the age of 65.

How is it funded: Medicare is funded through a federal payroll tax and is administered by the CMS (Center for Medicare and Medicaid Services).

What does it provide: There are four major parts of Medicare, each which cover different things. Part A covers hospital insurance (usually free for people who have worked longer than 10 years). Part B covers outpatient services, such as doctors visits and lab testing. Part C is known as Medicare Advantage is basically just private insurance that has a combination of A,B, and D benefits. Finally, Part D covers prescription drugs.


MEDICAID:


What is it: A nationally and state funded program that is managed by the states and covers mainly low income citizens.

How is it funded: Medicaid is jointly funded by federal and state taxes, with the federal government matching states contributions.

What does it provide: It provides a broad coverage of most health expenses, like hospital expenses and doctors visits.

Important Distinctions: Unlike Medicare, Medicaid is largely regulated by the states who determine how the program is implemented. Medicaid is also controversial because of low reimbursement rates, meaning some physicians don’t accept Medicaid payments.


CHIP:


What is it: Also, a nationally and state funded program that is meant to cover uninsured children in families that don’t qualify for Medicaid. Much like Medicaid, CHIP is also administered by states.

How is it funded: CHIP is jointly funded by federal and state taxes, with the federal government matching states contributions.

What does it provide: It provides a broad coverage of most health expenses, like hospital expenses and doctors visits.

Private Insurance

Private insurance is simply insurance coverage provided through a private company, instead of the government. Individuals receive private insurance through either employer sponsored plans (ESP) or self-purchasing. Self purchasing is typically more expensive because employers help pay for coverage in ESP.


Veterans Health Administration (VHA):


Healthcare coverage for veterans is run through the VHA. The VHA is much different from the previous two types because it is completely funded and run by the federal government. This means that the federal government hires its own providers and operates VHA specific hospitals and clinics. Therefore, doctors that work at VHA hospitals are considered government employees. While the first two types pay for individual to go to networks of private hospitals and clinics, the VHA is completely government operated.


OBAMA-CARE:


Obamacare or the Affordable Care Act (ACA) is simply a set of regulatory measures meant to drastically reduce the number of uninsured citizens in the United States. The ACA has a few significant provisions that I will explain below (everything else is outside the scope of what someone will ask you on an interview):


Individual Mandate

The individual mandate requires everyone who is not covered by one of the aforementioned policies to purchase insurance at the risk of paying an annual penalty for being uninsured. There was significant backlash over this policy because some claimed that it was unconstitutional to mandate individuals to purchase insurance. I will discuss this more in a later section.


Insurance Regulations

The ACA also put significant regulations on insurance companies. For example, insurers cannot deny coverage due to preexisting conditions, certain services must be covered, lifetime caps on essential benefits were banned, etc.


Exchanges

The ACA set up online marketplaces where individuals and small business could purchase insurance plans for themselves. These marketplaces are operated and regulated by the states. The government also provides subsidies to individuals who cannot afford the marketplace prices.


Medicaid Expansion

Finally, the ACA also expanded the eligibility of impoverished citizens to qualify for Medicaid. The federal government initially paid for all of the cost of the expansion.


The ACA has historically been a very contentious piece of legislature. There are aspects of the bill that many people see as problems, and have tried to resolve. I have mentioned some of the major issues below:

1) Insurance premiums rose because insurance companies had to provide more comprehensive plans.

2) Some individuals were not allowed to keep their old health insurance plans because they didn’t meet the minimum standards set by the ACA.

3) The number of companies that are participating in these healthcare exchanges vary drastically state by state. The less companies participating the less competition, less market forces driving down cost, and higher financial burden to people.


POST ACA


After President Donald Trump was sworn into office, he began to take measures to repeal and replace Obamacare, but it was much more difficult than he expected. Thus, the ACA is still active, albeit to a lesser extent. President Trump, along with the Republican party, have been continuously wearing down at the bill through various means, which I have talked about below.


Medicaid Expansion: The courts ruled that states could not be forced to participate in Medicaid expansion.

Individual Mandate: The president repealed the individual mandate with his Tax Cuts and Jobs Act of 2017.

Advertising: President Trump reduced the budget for advertising of the healthcare exchanges

Enrollment: President Trump also reduced the enrollment period by half, so less people would sign up for the program.


President Trump also introduced short term plans, now known as “Trumpcare” plans. These short term plans are have lower premiums and deductibles, have much lower levels of coverage, and only last at max one year.


Recently, president Trump has also made comments supporting the entire repeal of the ACA, including gutting the pre-existing conditions clause.


POTENTIAL QUESTIONS:


What are issues with the United States Healthcare system?

Increasing cost of healthcare spending

Patient’s don’t know the price of services at different hospitals (no incentive to drive price down)

Congress cannot regulate prescription drug prices

Because the United States system is composed of so many different types of insurance and policies, the administrative costs are enormous (25% of all hospital spending)

Worse outcomes relative to spending

Shortage of primary care doctors to further preventative medicine

Over-treatment due to Fee For Service payment model

Access to care in rural areas

Rising uninsured population

Increasing burden of paperwork/charting for physicians leading to less patient contact


How would you fix these issues?

Publish charge-master lists so people can compare hospital pricing

Move towards more value based care models (CMS is already trying to do this)

Increase salaries/benefits for primary care physicians

Regulate prescription drug prices

Give higher stipends to physicians who practice in rural areas

Allow hospitals networks to access each other EHR, so there is less duplication of care

So there you have it, everything you realistically have to know about the United States healthcare system for a medical school interview.

50 views

©2018 by MedPrep.