Econ 28, Exam #2

Front 1

job lock

Back 1

tendency for workers to remain in their job to keep employer-provided health insurance coverage

Front 2

cost-based reimbursement or fee-for-service

Back 2

a system under which health care providers receive payment for all services required

Front 3

managed care

Back 3

health care arrangements in which prices are kept down by supply-side control of services offered and prices charged

Front 4

capitation-based reimbursement

Back 4

system in which health care providers receive annual payments for each patient in their care, regardless of the services used by the patients

Front 5

HMOs

Back 5

Health Maintenance Organizations

Organizations that offer comprehensive health care from an established network of providers. HMOs combine the financing and delivery of health care into one organization.

Front 6

PPOs

Back 6

Preferred Provider Organizations

Organizations that give incentives to enrollees to obtain health care from a specified network of providers.

Front 7

POS

Back 7

Point-of-service plans

Give incentives to see physicians within the network. Enrollees are assigned primary care providers who serve at gatekeepers who make referrals to specialists.

Front 8

insurance premium

Back 8

money paid to an insurance company in exchange for compensation if a specified adverse event occurs

Front 9

expected value

Back 9

the average value over all possible uncertain outcomes, with each outcome weighted by its probability of occurring

Front 10

actuarially fair insurance premium

Back 10

an insurance premium for a given time period equal to the expected payout for the same time period

Front 11

expected utility

Back 11

average utility overall possible uncertain outcomes, calculated by weighting the utility for each outcome by its probability of occurring

Front 12

risk smoothing

Back 12

taking action to obtain a certain level of consumption should an adverse event occur

Front 13

risk premium

Back 13

amount above actuarially fair premium that a risk-averse person is willing to pay to guarantee compensation if an adverse event happens

Front 14

loading fee

Back 14

difference between premium an insurance company charges and actuarially fair premium level

Front 15

experience rating

Back 15

practice of charging different insurance premiums based on the existing risk of insurance buyers

Front 16

community rating

Back 16

charging uniform insurance premiums for people in different risk categories within a community, so low-risk people subsidize high-risk people

Front 17

moral hazard

Back 17

when obtaining insurance against an adverse outcome leads to changes in behavior that increase likelihood of the behavior

Front 18

deductible

Back 18

fixed amount of expenditures that must be incurred within a year before the insured is eligible to receive insurance benefits

Front 19

copayment

Back 19

fixed amount paid by the insured for a medical service

Front 20

coinsurance

Back 20

a percentage of the cost of a medical service that the insured must pay

Front 21

flat-of-the-curve medicine

Back 21

notion that after a certain point, additional health gains of greater spending on health care are relatively limited

Front 22

third-party payment

Back 22

payment for services by someone other than the consumer

Front 23

commodity egalitarianism

Back 23

the idea that some commodities ought to be made available to everybody

Front 24

Medicare

Back 24

federally funded government program that provides health insurance for people aged 65+ and the disabled

Front 25

hospital insurance

Back 25

Part A component of Medicare that covers inpatient medical care and is funded through a payroll tax

Front 26

supplementary medical insurance

Back 26

part B component of Medicare that covers physician services and medical services rendered outside the hospital and is funded by a monthly premium and by general revenues

92% of eligible population chooses to enroll

Front 27

retrospective payment system

Back 27

compensation is paid after care is completed; provides little incentive to economize on costs

Front 28

prospective payment system

Back 28

compensation level is set prior to the time that care is given

payment system currently used by Medicare Hospital Insurance program

Front 29

DRG

Back 29

diagnosis related groups

classification system used to determine prospective compensation payments in part A Medicare

Front 30

resource-based relative value scale system

Back 30

set of values based on time and effort of physician labor used to determine physician fees in part B Medicare

Front 31

Medicaid

Back 31

federal and state financed health insurance program for the poor

Front 32

SCHIP

Back 32

State Children's Health Insurance Program

program that expanded Medicaid eligibility to some children with family incomes above Medicaid limits

Front 33

crowd out

Back 33

when public provision of a good leads to a reduction in the private provision of the good

Front 34

annuity

Back 34

insurance plan that charges a premium and then pays a sum of money at regular intervals for as long as policyholder lives

Front 35

fully funded

Back 35

pension system in which an individual's benefits are paid out of deposits that have been made during his or her working life, plus accumulated interest

Front 36

pay-as-you-go (unfunded)

Back 36

a pension system in which benefits paid to current retirees come from payments made by current workers

Front 37

SSI

Back 37

Supplemental Security Income

welfare program that provides minimum income guarantee for the aged and disabled

Front 38

averaged indexed monthly earnings

Back 38

top 35 years of wages in covered employment, indexed each year for average wage growth. used to compute an individual's Social Security benefit

Front 39

PIA

Back 39

primary insurance amount

basic Social Security benefit payable to a worker who retires at normal retirement age or becomes disabled

Front 40

normal retirement age

Back 40

age at which an individual qualifies for full Social Security retirement benfits

Front 41

Social Security Trust Fund

Back 41

fund in which Social Security surpluses are accumulated for the purpose of paying out benefits in the future

Front 42

off-budget items

Back 42

Federal expenditures/revenues that are excluded by law from budget totals

Front 43

unified budget

Back 43

document that includes all the fed gov't's revenues and expenditures

Front 44

life-cycle model

Back 44

theory that individuals' consumption and savings decisions during a given year are based on a planning process that considers lifetime considerations

Front 45

wealth substitution effect

Back 45

crowding out of private savings due to existence of Social Security

Front 46

endowment point

Back 46

consumption bundle available if an individual neither borrows nor saves

Front 47

intertemporal budget constraint

Back 47

set of feasible consumption levels across time

Front 48

retirement effect

Back 48

to the extent that Social Security causes people to retire earlier, people may save more in order to finance a longer retirement

Front 49

bequest effect

Back 49

theory that people save more to finance a larger bequest to children in order to offset intergenerational redistribution of income caused by Social Security

Front 50

dependency ratio

Back 50

ratio of Social Security beneficiaries to covered workers

Front 51

replacement ratio

Back 51

ratio of average SS benefits to average covered wages

Front 52

sustainable solvency

Back 52

expected present values of revenues and expenditures are equal into indefinite future

Front 53

carve-out accounts

Back 53

personal accounts funded by diverting payroll tax revenues away from traditional Social Security system

Front 54

add-on accounts

Back 54

personal accounts funded from workers' resources rather than by diverting money from payroll tax

Front 55

in-kind transfer

Back 55

payments from government to individuals in the form of commodities or services rather than cash

Front 56

utilitarian social welfare function

Back 56

equation stating that social welfare depends on individuals' utilities

Front 57

maximin criterion

Back 57

Rawlsian utility function

Social welfare depends on utility of the individual who has the minimum utility in society

Front 58

expenditure incidence

Back 58

impact of government expenditures on the distribution of real income

Front 59

AFDC

Back 59

Aid to Families with Dependent Children

Program of cash transfers 1935-1996. Anyone whose income was below a particular level and who met other conditions was entitled to an immediate cash benefit.

Front 60

TANF

Back 60

Temporary Assistance to Needy Families

Welfare program enacted in 1996 under which payments to recipients were available only on a temporary and provisional basis.

Front 61

means-tested

Back 61

spending program whose benefits flow only to those whose financial resources fall under a certain level

Front 62

workfare

Back 62

able-bodied individuals who qualify for income support receive it only if they agree to participate in work-related activity

Front 63

EITC

Back 63

Earned Income Tax Credit

tax credit for low-income individuals