Lecture 24
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1. The document discusses the four main types of health insurance in the United States: private insurance, Social Security, Medicare, and Medicaid. 2. It provides details on the history and evolution of each type over time, including implicit and explicit rationing approaches. 3. A key issue raised is the future affordability and sustainability of programs like Social Security and Medicare as the population ages and medical costs rise. Long term nursing home care is also discussed as a major cost problem.
Lecture 24
- 1. Stephen Hansell, Ph.D. Department of Sociology Institute for Health Research http://sakai.rutgers.edu shansell@rci.rutgers.edu 609-203-2830
- 2. Class 24 – Health Insurance;
- 3. I. Private insurance – oldest kind of health insurance in us – 85% are covered as of now A. Originally fee-for-service • first one was blue cross(hospital) and blue shield (doctor)which was originally non profit • paid 80% of the charges and had a choice of doctors and hospitals • the 20% also had plans called medigap that helped you pay • if you had aids, cancer etc you will never get the insurance • they created pooled risk= one premium for everyone, insured healthy people subsidized the sick people • they did this because they did not have resources to calculate individual risk • excludes long term nursing home care • usually drop you after a major illness • usually drop you when you change jobs cz you are older and so higher risk and so more expensive B. 1970's - implicit rationing through HMO's C. 1980's - explicit cost rationing through DRG's D. 1990's - explicit treatment rationing through managed care E. the above rationing effect all insurances not just the private insurance
- 4. I. Social Security – originally it was designed as a safety net to supplement private savings for retirement – main retirement income/saving program for the older people A. Accounts for more than half the income of the elderly B. A pay-as-you-go program • the money you pay today, will go to the people that are old today not you later C. Past retirees got back more $ than they put in D. Future retirees will get back less than they put in • 1977 retire will get 2.5 times the money they put into it • as of 1990 people get 2/3 out of the total • this is happening cz of the huge nos of baby boomers = between 1946 and 1964 there was a huge nos of baby that were born • olden days 100 workers supported 2 retires by 2035 10 workers will support 75 retires
- 5. E. Why? – demographics F. Something must change to keep social security from going bankrupt 1. Higher taxes? 2. Reduced benefits? 3. Raise age of eligibility? – age has changed from 65 -> 67.5
- 6. III. Medicare A. Health insurance for the elderly B. medicare parts 1. Part A covers hospital – covers all the people – there are lifetime and yearly limits – limited coverage of nursing home care – point - medicare dosent care for all care but does care tiny care – not cover home care – dosent cover serpit care 2. Part B covers doctor bills (optional) have to pay extra – deductibles and copayments – used drg’s = there is a fixed reimbuse rate for ever diagnostic group 3. Part C Medicare Advantage (optional) – people with medicare can get this cz the medicare goes to private insurance and then they pay for your health – very good for the insurance companies 4. Part D covers drugs (optional) 4. passed be busch 5. pays for the drugs 6. dosent cover most prescription drug usage 5. all increated to make most profit for private insurance companies including no cap on price of drugs and permission to drop drugs out of coverage
- 7. B. Federally funded out of current payroll taxes C. Medicare has tended to benefit more affluent people 1. Sickest old people are low utilizers of Medicare 2. Poorest old people are low utilizers 3. Minorities are low utilizers 4. people with higher education have higher chance to get their right
- 8. D. Advantages of Medicare • GREATLY INCREASED ACCESS TO CARE FOR OLDER PEOPLE IN THE COUNRY E. Problems with Medicare • dosent pay for many medications • dosent pay for home care, nursing care • dosent pay for appliances like eye glasses and dippers • pays physicians a “reasonable” fee which is less than the market price so doctors stop treating them • pays only 80% for a procedure F. 1970's - implicit rationing through HMO's G. 1980's - explicit cost rationing through DRG's H. 1990's - explicit treatment rationing through managed care
- 9. IV. Medicaid – another one of lindin johnson’s society programs – health insurance for the poor – means tested entitlement program = you have to show the financial need – covers the poor elderly and DOES cover nursing care – covers mothers and children afdc – dosent cover men with afdc – many near poor people people – insures 1/7 people in america – 50% babies – more than 50% nursing home care A. Health insurance for the poor B. Combined Federal (55%) and State (45%) funding • but states determine how poor you need to be C. Advantages of Medicaid • vastly increased access to care for poor people • pays for medications • pays for nursing home care • medicade pays even less to reimburse doctors • soo these poor people end up in the emergencr room of the hospital
- 10. D. Problems with Medicaid 1. Two classes of care E. 1970's - implicit rationing through HMO's F. 1980's - explicit cost rationing through DRG's G. 1990's - explicit treatment rationing through managed care
- 11. V. Problem: long-term care for elderly A. Nursing homes serve only 6% of the elderly • people that dont have a family to take care of them or never married - intense frequency • widowed people -intermediate presence • average length of a stay there is 80 days = people die when they go there B. But cost per patient is very high • will worsen when the baby boomers are all old • 50000 per year • most of paid for medicade • hence majority of the medicade money will go to cover them C. Mostly paid for by Medicaid, not Medicare
- 12. D. Waste and corruption in private nursing home industry contributes to costs • the regualtions for care are no longer enforced • so there are a lot of variations in different care so there is a large variety of care; so they cut services E. Who uses nursing home care? F. Middle class people "spend down their assets" to get into nursing homes • most people are white, educated, etc • nursing homes try to avoid people who are on medicade • they like middle class people and sell their house, car etc to pay nursing home
- 13. G. Demand for nursing home services far exceeds supply, especially for poor Medicaid patients H. Why aren't public funds used for home care? • we have a tradition of healthcare at a distance • it would be very popular and hugely expensive I. Future overcrowding of nursing homes
- 14. Stephen Hansell, Ph.D. Department of Sociology Institute for Health Research http://sakai.rutgers.edu shansell@rci.rutgers.edu 609-203-2830