Name: Baraah El-Haik Health Insurance Matrix

HCS/235 Version 4
1
University of Phoenix Material
Health Insurance Matrix
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Origin: When
was the
model first
used?
What kind of
a!ment
s!stem is
used" su#h
as
rose#ti$e"
retrose#ti$e"
or
#on#urrent?
Who a!s for
#are?
What is the
a##ess
stru#ture" su#h
as gatekeeer"
oen%a##ess"
and so forth?
How does the model
affe#t atients? &n#lude
ros and #ons'
How does the model
affe#t ro$iders?
&n#lude ros and #ons'
Health
maintenan#e
organi(ation
)H*O+
,-amle:
HM"s first
emer#ed in
the 1$%&s 'ith
(aiser
Permanente in
)alifornia and
the Health
Insurance
Plan in Ne'
*ork!
Ho'eer+ they
'ere not
adopted
'idely until the
1$,&s+ 'hen
health care
costs
increased and
the federal
#oernment
passed the
,-amle:
HM"s often
operate on a
prospectie or
prepaid
payment
system 'here
proiders are
paid a
capitated fee
-one flat
amount per
.eneficiary-
per month+
/uarter+ or
year+
re#ardless of
the fre/uency
or /uantity of
serices used
0Barsukie'ic1+
2affel+ 3
,-amle:
In #roup
policies+ 'here
health
insurance is
proided
throu#h the
employer+ the
employer pays
the insurance
company a set
amount a#reed
upon in
adance!
Accordin# to
Austin and
4etle 05&156+
employers
coered 789 of
premium costs
for sin#le
coera#e and
,-amle:
HM"s hae the
strictest access
structure+ called a
#atekeeper
model+ 'here
patients must
hae a primary
care physician
0P)P6 throu#h
'hom all care is
routed! P)Ps
decide 'hich
dia#nostic tests
are needed and
control access to
specialists
throu#h referrals+
decidin# 'hen it
is necessary for a
patient to seek
more expensie
,-amle:
HM"s are usually the
least expensie health
plans+ offer predicta.le
costs for health care+ the
least administratie
paper'ork+ and coer
preentie care
0Barsukie'ic1+ 2affel+ 3
2affel+ 5&1&6! Ho'eer+
HM"s also restrict direct
access to specialists .y
re/uirin# referrals .y a
P)P+ re/uirin# patients to
see a proider in the
HM" net'ork+ and often
not coerin# more costly
procedures or care
options+ .ecause care is
mana#ed to control
excessie or unnecessary
care! Proiders #ain if
,-amle:
Adanta#es of HM"s are
that a kno'n amount of
reenue is #uaranteed
and the patient population
num.er is fixed 0Austin 3
4etle+ 5&156! In addition+
if proiders use less in
serices than the
capitated fee+ they are
paid each month to coer
the cost of care+ they
keep the difference!
)onersely+ if care costs
exceed the contracted
amount+ then the proider
must assume that
financial risk+ 'hich puts
proiders at a
disadanta#e if they care
for a sicker patient
population 0Austin 3
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Name: Baraah El-Haik Health Insurance Matrix
HCS/235 Version 4
5
HM" Act of
1$,8+ 'hich
re/uired that
companies
that offered
health
insurance and
employed
more than 5<
employees
include an
HM" option!
=he la' also
supplied start-
up su.sidies
for these
health plans
0Barsukie'ic1+
2affel+ 3
2affel+ 5&1&6!
2affel+ 5&1&6!
In staff model
HM"s+ such
as (aiser
Permanente+
proiders are
salaried+ .ut
this
arran#ement
is the
exception+ not
the norm!
,89 for family
coera#e in
5&&$! =he
employee+ or
.eneficiary+
paid the
difference!
=hen+ the
health
insurance
company pays
the proider
directly!
specialty care
0Barsukie'ic1+
2affel+ 3 2affel+
5&1&6!
they proide less care
0Austin 3 4etle+ 5&156!
=his incentie could affect
patient-proider trust!
4etle+ 5&156! HM"s also
restrict the coered
serices+ 'hich limits
autonomy in medical
decision-makin#!
&ndemnit! An indemnity
health
insurance plan
is traditional
health
insurance that
has .een
around for oer
<& years! =he
name comes
from the ori#inal
purpose: the
idea 'as to
reim.urse 0or
indemnify6
people for the
portion of
medical .ills
that inoles an
unaccepta.le or
un.eara.le
Indemnity
insurance is a
retrospectie
payment
system> this
method is
considered a
fee-for serice
payment
method! =his
methodolo#y
inoles
insurance
companies and
other third
parties makin#
payments after
the proider has
rendered a
serice+ .ased
on 'hat the
It is a fee-for-
serice plan+
'hich means the
insurers pay for
medical serices
once they hae
.een rendered!
Most plans come
'ith an annual
coinsurance
maximum and
once the insured
meets this
amount+ 'hich
aries dependin#
on the plan+ the
insurance
company 'ill pay
1&& percent of
the medical costs
for the rest of the
Indemnity users
hae open access
structure+ 'hile
these plans do
re/uire that a
su.scri.er select a
Primary care
Physician these
plans do not
re/uire that care .e
coordinated .y the
P)P! A su.scri.er
may directly access
specialists in a
#ien carrier
net'ork 'ithout
hain# to first clear
their P)P!
=he primary .enefit of an
indemnity plan is the
freedom the insured has to
pick the doctor or facility of
his choice! =his contrasts
'ith the 'ay mana#ed care
'orks+ in 'hich selectin# an
out-of-net'ork proider
results in either no coera#e
or increased costs to the
insured! Because indemnity
policies do not inole a
proider net'ork+ there is no
a#reement .et'een
proiders and the insurance
company to proide care at
specific rates! =hus+ the
costs for serice can .e
hi#her+ and a patient may .e
re/uired to coer costs
.eyond 'hat is considered
=his plan is #ood for
proiders since they are not
re/uired to .e in the proider
net'ork in order for a patient
to .e a.le to schedule to see
them+ this also allo's them
not to .e dictated on the
serices that they can
proide for their patient!
Patients mi#ht only .e
reim.ursed for a percenta#e
of the serices rendered!
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Name: Baraah El-Haik Health Insurance Matrix
HCS/235 Version 4
8
loss! ;nderlyin#
the concept
.ehind this type
of health
insurance is that
you+ the
insured+ hae
the choice as to
'hich health
care
professionals to
see+ 'hen+ and
in 'hat settin#+
as 'ell as 'hat
dru#s and
treatments you
'ould take!
proider
char#es for the
serice
rendered
calendar year! ?usual+ customary and
reasona.le? 0;)26! In many
cases+ the patient has to pay
the proider directly+ then file
paper'ork 'ith the
insurance company for
reim.ursement!
Consumer%
dire#ted
health lan
)onsumer
directed health
plans 0)@HPs6
emer#ed in the
late 1$$&As!
=hese products
'ere desi#ned
to en#a#e
consumers
more directly in
their health care
purchases! =he
conceptual
model made
cost and /uality
information
eident to the
consumer+
usually throu#h
the Internet+
thus creatin# a
more efficient
health care
market!
=his insurance
plan is a
prospectie
payment plan
rather than a
insurance
company! Bince
they hae to
use their o'n
money to pay
for serices
rendered they
must look into
findin# the .est
price and only
use their
medical care
'hen they
actually need it!
=he consumer
health plan much
like an HBA+ the
patient must pay
a hi#h deducti.le
for their serices
.efore the
insurance
company 'ill pay
for a portion of
the serices!
4ith this plan the
patient can also
esta.lish a
sain#s account
that can also
accrue interest
'hich is not
taxa.le and can
.e used for
future health care
needs!
=his insurance plan
has many
restrictions! =o
/ualify the patient
has to .e enrolled
in an insurance
plan 'ith a hi#h
deducti.le+ cannot
.e claimed .y
anyone else+ and
you canAt hae any
other type of
insurance! =his
plan is open in the
sense that you can
see 'ho you 'ant+
'hich cause the
patient to shop
around for the .est
price for the
serice+ 'hich
leads to
competitie pricin#!
=his plan may .e #ood for
patients that are in #ood
health+ 'hich in turn allo's
them to sae for future
health issues that may come
up!
In this model the proiders
donAt hae restrictions
placed on them .y the
insurance company! Bince
the patient is in char#e of
their o'n proiders+ this
means the proider must
price their o'n serices
makin# it competitie a#ainst
other proiders in order to
dra' patients in!
.oint%of%
ser$i#e
Point of serice
first emer#ed in
the 1$C&As!=he
=his plan is
retrospectie
like a PP" or an
=his plan has co
payments and
deducti.les! After
P"Bs hae the
#atekeeper model+
in 'hich the
=his model is #ood in sense
that it offers lo' deducti.les
and co payments+ yet it still
=his system is #ood fro
proiders since it allo's
them to see ne' patients
)opyri#ht : 5&18! 5&15+ 5&1&+ 5&&$ .y ;niersity of Phoenix! All ri#hts resered!
Name: Baraah El-Haik Health Insurance Matrix
HCS/235 Version 4
%
reason for the
name is
.ecause
participants
hae the
freedom to
choose the leel
of .enefit they
receie each
and eery time
they seek
medical
serices!
HM"! =his plan
does hae set
rates dependin#
on 'hether or
not the proider
is or isnAt in the
net'ork and the
serices that
are needed! If
the proider is
out of the
net'ork the
patient does
hae to pay
more out of
pocket!
the deducti.les
are met the
insurance
company 'ill
then pay a set
amount for
serices and the
patients pays a
co pay! If the
proider is out of
net'ork the
payment is
hi#her!
physician 'ho
controls access to
the planDs proider
net'ork! =he
doctors in the plan
are #enerally paid
on a capitation
.asis+ 'hich means
they #et a set fee
per person
re#ardless of the
amount of serice
they perform!
has the flexi.ility to allo' the
patient to see 'ho they
'ant! =his can also .e .ad
in the sense that if they
decide to see an out of
net'ork proider+ their out of
pocket cost 'ill also .e
hi#her!
'ithout hain# to hae a
referral from the primary
care proider! =he do'nside
may .e that the patient may
not continue to see them is
they are out of net'ork due
to the out of pocket cost!
.referred
ro$ider
organi(ations
In the 1$,&s+
preferred-
proider
or#ani1ations
0PP"s6 .e#an
chan#in# the
rules of fee-for-
serice care!
PP"s steer
employees to
cooperatin#
doctors and
hospitals that
hae a#reed to
a predetermined
plan for keepin#
costs do'n! A
PP" is similar
to a health
maintenance
or#ani1ation+
.ut you pay for
care 'hen it is
receied rather
than in
adance!
=his plan is
prospectie!
Proiders in
their o'n
net'ork hae
set rates+ 'hich
if the proider is
out of net'ork
the patient has
a hi#her rate!
PP"As re/uire
annual
premiums!
=he patient must
pay an annual
premium in order
to hae access to
the insurance
company! =his is
a third party+
'hich is the #o
.et'een for the
patient and
proider! 4hile
they do ne#otiate
lo' rates they do
also allo' hi#her
rate proiders!
=hey also re/uire
co pays and
annual
deducti.les!
PP"s hae an
open-access
model+ PP"s offer
freedom of choice
of proiders and
#enerally hae had
fe'er utili1ation
mana#ement
constraints!
Pros: *ou 'ill not hae to
choose and .e tied to any
particular primary health
care physician! *ou 'ill
hae access to a lar#e
num.er of facilities and
physicians! *ou 'ill .e a.le
to choose 'hateer
physician or doctor to see
for medical care! Hain# a
referral to any specialist is
not needed at all! 4hile
usin# a participatin#
proider you 'ill .e a.le to
fix a ne#otiated amount
'hich 'ill .e less than the
amount you 'ould hae to
pay 'ithout the plan!
)ons: Almost al'ays there
'ill .e a deducti.le to .e
met! =here 'ill .e a co-
insurance amount after the
deducti.le is met 'hich
you 'ill hae to pay! PP"
'ill cost you more
compared to other plans
.ecause of the deducti.le+
=his model proides the
proiders 'ith a hi#h olume
of patients into their offices
due to the net'ork contract!
In order to .e in this net'ork
and het more patients their
rates must .e lo'er to do so!
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Name: Baraah El-Haik Health Insurance Matrix
HCS/235 Version 4
<
co-insurance and other
out-of-pocket costs!
Health sa$ings
a##ount
Health Bain#s
Accounts
0HBAs6 'ere
created in 5&&8
so that
indiiduals
coered .y
hi#h-deducti.le
health plans
could receie
tax-preferred
treatment of
money saed
for medical
expenses!
Eenerally+ an
adult 'ho is
coered .y a
hi#h-deducti.le
health plan
0and has no
other first-dollar
coera#e6 may
esta.lish an
HBA!
HBAAs often
operate on a
concurrent
payment
system! HBAs
essentially
represent a
triple tax
su.sidy for
health care! All
contri.utions to
the HBA are tax
free! A certain
amount of an
employeeAs
#ross salary is
'ithheld and
inested
throu#h the
HBA!
4ith a health
sain#s plan you
hae to pay a
hi#h deducti.le
for the serices
.efore the
insurance
company 'ill pay
for a portion of it!
=he patient can
esta.lish this non
taxa.le account
for future health
care needs!
)onsumers are not
limited .y a health
care #ate keeper
decidin# 'hat
medical care they
can hae access
to! )onsumers can
take control of their
o'n health! =he
purchase of any
health insurance
policy is a hu#e
decision
Pros: HBAs can .e
deposited into a health
sain#s account and are tax-
deducti.le! Any unused
money at the end of the year
rolls oer 0stays in your
account6 to the next year!
Interest earned is tax-
deferred+ and if used to pay
for /ualifyin# medical
expenses+ tax-free! HBAs
can .e inherited!
)ons: Bince oneAs health is
unpredicta.le+ this cushion
may not accurately prepare
for future expenses!
Maintenance fees for HBA
accounts can .e hi#h! If the
HBA sain#s are not applied
to appropriate medical
expenses+ penalties and a
1&9 tax 'ill .e assessed!
=here are no restrictions for
the proiders placed on
them .y insurance
companies! =his allo's the
patient to shop around for
the .est price for their health
serices!
/eferen#es
Austin+ A!+ 3 4etle+ F! 05&156! The United States health care system, combining business, health, and delivery ! 05nd ed!6! ;pper Baddle 2ier+ NG:
Pearson Education!
Barsukie'ic1+ )! (!+ 2affel+ M! 4!+ 3 2affel+ N! (! 05&1&6! The U.S. health system: Origins and functions. 0Cth ed!6! Mason+ "H: )en#a#e Hearnin#!
)opyri#ht : 5&18! 5&15+ 5&1&+ 5&&$ .y ;niersity of Phoenix! All ri#hts resered!