Cost Sharing In Health Care Essay

15. Discuss the four principles of insurance and the nature and purpose of cost sharing in private health insurance.

The four principles of insurance:

1. Risk is unpredictable for individuals

2. Risk can be predicted with some accuracy for a large group

3. Insurance can shift risk from the individual to the group by pooling resources

4. Losses are shared by all members

The purpose of cost sharing is to reduce misuse of insurance benefits. The three parts of cost sharing are premium cost sharing, deductibles and copayments.

16. Discuss Medicare; when and how it was developed (parts A and B) and, how it has changed since its inception, i.e., Part C and D, managed care and the Affordable Care Act

Part A Hospital insurance financed by payroll taxes.

Created under MMA of 2003. Available for Part A or B.

With the Affordable care Act Medicaid has expanded to cover below the federal poverty level.

17. What are Diagnostic-Related groups (DRG’s), Ambulatory Payment Classification (APC), Outpatient Prospective Payment System (OPPS), Resource Utilization Groups (RUG), and Home Health Resources Groups (HHRG) and how are “codes” like this utilized to try to control cost?

Diagnostic-Related groups (DRG’s), Ambulatory Payment Classification (APC), Outpatient Prospective Payment System (OPPS), Resource Utilization Groups (RUG), and Home Health Resources Groups (HHRG) are the four main prospective reimbursement methods. Prospective reimbursement certain pre-established criteria are used to determine the amount to be reimbursement. Through the reimbursement methods they provides pre-established amounts and also bundle rate that include everything. In doing so it keeps the cost a lot less by rewarding providers to keep the cost down.

18. Based on the information in your text, how were the National Health Expenditures were spent and what impact did this have on the Gross Domestic Product (GDP) and the Consumer Price Index