Assignment #2: Financing and Structuring Health Care.
1. Describe and identify the three main types of health insurance in the U.S.
Today in the United States, the three main types of health insurances are as follows:
1) Voluntary Health Insurance (VHI): is a private health insurance currently used for industrial employment. It can be subdivided into three categories, such as Blue Cross and Blue Shield, private or commercial insurance companies, and health maintenance organizations (HMO). Blue Cross was initiated by Baylor teachers in Dallas, Texas who organized to provide hospital care for three cents (Williams& Torrens, 2010). The Farmer’s Union started its Cooperative ...view middle of the document...
Medicaid is actually the name given to a collection of state programs that meet standards set by the Health Care Administration, which are run by state agencies (Robert H. Lee, 2000). Thus, Medicaid compromises the most programs which represent a type of transfer payment for low income employment and disability. Moreover, welfare recipients receive cash assistance for their living expenses. The medical benefits are paid directly to the health care providers in order to avoid any temptation.
2. Describe the three methods for categorizing health insurance in the U.S.
The first method characterizes health insurance according to the typical combination of products (Williams & Torrens, 2010).
1) The principal insurance vehicles that provide benefits associated with illness are:
• Basic employee benefits, such as vision, dental, medical, and prescription drug.
• Disability insurance provides short- and long-term insurance as a part of benefit programs along with compulsory disability insurance regulated by five states.
• Workers’ compensation.
2) The type of organization sponsoring the coverage
3) Funding mechanism
The second method is the type of organization sponsoring the coverage such as commercial health insurance industry, Blue Cross and Blue Shield, Health Maintenance Organizations (HMO), and self-fund or partially self-fund. The third method for categorizing health insurance is: fully insured; partially insured; and self-insured or self-fund.
3. Identify the three types of managed care plans and give the pros and cons of each for the health care provider, insurer, and patient.
In managed care, the insurance plan is interposed between the patient and the provider and ultimately decides what services will be rendered (Robert H. Lee, 2000). Basically there are three different types of managed care plans, they are similar in nature, but the programs are different. The basic types of managed care plans are:
HMOs (Health Maintenance Organizations)
HMOs provide treatment on a prepaid basis, so the members of the HMO pay a set monthly fee regardless of amount of medical care needed. In exchange for the fee, the HMO provides a wide variety of services ranging from office visits to surgery. In most cases, HMO members have to receive their medical treatment from Providers in the network, although there are some exceptions.
PPOs (Preferred Provider Organization)
PPOs are organizations made up of doctors and hospitals (known as preferred providers) that only serve a specific group or association. As a PPO member, generally patient have to pay for services as they are received and re reimbursed for the cost of treatment less your co-payment. Sometimes the service provider bills the insurance company directly, they insurer pays the provider and the insured has to pay the co-payment to the provider. In a PPO arrangement, the price of certain services is determined in advance, and that is the price charged for the duration of...