Pam435 Week 5 Lecture Notes

Front 1

Why is 17% of non elderly population uninsured?

Back 1

a. 63% are insured through workplaces, some govt, some individual purchase, rest are uninsured
b. Govt does not give us health insurance or mandate it --so because it is voluntary some sector of population is going to opt out.

Front 2

What is an issue about uninsured?

Back 2

1. income (slide 5) for ppl whose household make about 40k or less --1/3 of those houses are uninsured. They do not all qualify for Medicaid!!!! --reserved for poorest income bracket

Front 3

who will not get medicaid?

Back 3

1. poor adults w/o children
2. poor adults w/ children but with some assets
3. Some people may just not WANT health insurance, ad some dont have money to buy it!

Front 4

Uninsured people

Back 4

1. half cant afford health insurance
2. other half choose not to buy it

Front 5

Higher income bracket people?

Back 5

1. people in slightly higher income brackets mostly have private insurance. BUT NOT ALL DO so it is likely they choose not to have it.

Front 6

At or below poverty level?

Back 6

more likely to not have private insurance, and they comprise a larger percentage of uninsured. (35.8% uninsured, 20.8% private insurance)

Front 7

Why do people making much more than what is considered the povery level not have insurance?

Back 7

1. Think community rated insurane is unfairly priced. They would rather buy other luxuries. Buying the insurance isnt a good deal and may not need it at moment.
2. "Default" of care- if your life is in danger, you can always go to an emergency room and they will stabilize you so that you survive. You DONT need insurance for that, but you DO for any procedure beyond this basic level of care. some people are ok wtih just getting most necessary care.

Front 8

Give example of why someone would opt out of health insurance.

Back 8

60 year old man with diabetes, what if an insurance company charges him a very high amount due to liability? his employer might not provide him with an insurance plan, so this could happen. If he makes 50k per year but would have to pay half of that for insurance he may opt out.

Front 9

True or fast most uninsured live in non working households

Back 9

FALSE 71% of uninsured live in working households but unemployment can be reason for not being insured

Front 10

How many firms offered health insurance in 2008 and why is this a reason for people not being insured?

Back 10

Not all firms offer health insurance--only 63% in 2008
a. slide 10- firms with less than 9 workers only 40% offer health insurance
b. many firms also dont give part-time workers health insurance
c. if a firm has over 200 workers it will deifnitely offer health insurance
d. there is tradeoff in offering h.i. : if firm offers it then SALARY WILL BE LOWER. some peolpe may lobby to get rid of insurance for BETTER SALARY
e. smaller firms will end up offering h.i. with HIGHER LOADING CHARGES. PREMIUM WILL BE HIGHER since there is a smaller pool over which to spread risk

Front 11

CNN video shows importance of employer- sponsored health insurance market

Back 11

A man was uninsured and got cancer, one hospital removed tumor but wouldn't do anything else. Studies show that people live longer if they have health insurance. This man married someone just so he could get health insurance

Front 12

Benefits of receiving health insurance through their employer

Back 12

1. you pay less taxes if you get insurance through employer

Front 13

History of health insurance from employer

Back 13

2. During WW2 there were many labor shortages under federal wage controls, and govt decided that firms could offer health benefits w/o violating the wage controls to attract people to jobs
a. economy was all going towards war effort
b. h.i. was not considered a wage increase
c. this system was NOT a result of congressional legislation, it came from actions by executive branch during wartime--its an ACCIDENTAL system

Front 14

What kinds of advantages of employer-sponsored h.i.?

Back 14

TAX ADVANTAGES!- see slide 16. (employee tax about 17% +5000 private insurance so that employer sponsored save 1, 750$)
ex. 50k salary - private h.i. 5k left with 27500 after taxes VS
policy worth 5000 but pay 4000 with 45k salary but save on taxes! and not taxed for paying h.i.

Front 15

Reality of health insurance provided by employer

Back 15

employees still pay for their insurance- the employer doesnt really lift any of the burden. But there are still strong incentives to get insurance through your employer isnce it saves you a bit of money
--employer sponsored h.i. provides coverage to 150 million people. Premiums are free of state and federal income and payroll taxes!

Front 16

DISADVANTAGE of employer-sponsored h.i?

Back 16

$209 billion is NOT collected by govt by NOT TAXING h.i. through employers. This exceeds Medicaid payment and is not really justified.
a. worse for lower income people if salary is >10k/year only get $102 subsidy. if make <100k get a LARGER subsidy around 2700
2. Govt opts out of many policies due to money arent collecting
3. tax exclusion creates inefficiency. Subsidizing h.i. encourages ppl to include in plans high probability, low cost events (like annual checkups ) whose cost ppl could bear w/o insurance

Front 17

Individually-purchased health insurance

Back 17

Only 13 million purchase their own coverage
No tax break unless medical costs exceed 7.5% of a person’s adjusted gross income

Front 18

ADVANTAGE of employer sponsored hi?

Back 18

1. risk pooling addresses adverse selection
2. workers generally share costs equally; community rating within an employer
3. lower loading charges in large groups
4. employers have incentives to keep their workforce healthy and productive

Front 19

OVERALL DISADVANTAGES of employer-sponsored h.i.

Back 19

1. often cannot successfully pool risk, which implies experience rating. This is especially true in small firms and among self employed. Also, people do not always keep the same employers forever.
2. Some employers dont offer hi and its expensive to buy insurance in non-group market
3. community rating can discourage healthy workers from buying hi
4. there are gaps in coverage: no good risk pools for those outside system

Front 20

history of managed care?

Back 20

a. early 1900s workers not getting wage increase b/c employers paid more and more for insurance
b. managed care drove hi costs for about 5 years (slide 27)
c. early 80s everyone had INDEMNITY H.I. - not many were in mcp (ppo, hmo, pos)