read more
Notes about the Healthcare system
• Providers: the doctors, nurses, etc who are in a hospital, clinic, etc.
• Providers give goods (like prescriptions, casts, etc) and services (their skill/expertise) to the patient in exchange for money.
• But if you get sick, the medical costs can be extremely high, and you probably won't be able to pay for them.
• Healthcare Insurance: to protect against huge bills, individuals pay "insurance premium" costs to insurance companies, which could be on a monthly basis, in exchange for coverage.
⁃ With your coverage, you get things like a "co-pay" or "deductible", which is how much you have to pay, and the insurance company will pay the rest.
⁃ An example of an insurer: Blue Cross Blue Shield.
• Many employers will, as a benefit, pay the premium of the health insurance for their employees.
⁃ About 50% of Americans get their insurance this way.
• Then you have Medicare and Medicaid
⁃ These are government programs which are paid for by taxes.
⁃ They pay directly for certain goods/services (to the hospitals/doctors), so they sort of act like an insurance company for the people who are eligible.
⁃ They also, in some cases, pay the premiums to give individuals health insurance (basically doing what the employer does).
⁃ About 33% of Americans get it from Medicare and Medicaid (about 15% Medicare and 15% Medicaid).
• Then you have a small sliver of people who pay for their own health insurance
⁃ This is a very small portion.
• And finally you have the rest, about 33%, who are uninsured.
⁃ These people have to pay all medical expenses out of pocket.
⁃
• Medicare:
⁃ Medicare applies to people who are over 65 years old and those who are disabled. Trying to protect people who are old and may have low income and high medical bills.
⁃ It also applies to the disabled.
⁃ It also applies to people who have kidney failure (dialysis).
⁃ It also applies to people with ALS.
⁃ This is a fully federal program, run only by the federal government.
⁃ Basically anyone over 65 who has paid their taxes will get this.
• Part A (1965)
⁃ Covers acute things, like staying in a hospital, and the hospital expenses (this is just the hospital expenses). Medicare pays for them.
⁃ The people do still have to pay $1000 deductible, and after 60 days of being treated, have to pay a portion of the cost (called co-insurance).
⁃ Funded by 2.9% tax (half paid by employer)
⁃ If you pay that tax for 10 years, then you're eligible for Part A Medicare after you're 65.
• Part B (1965)
⁃ Covers the doctor's expenses when treating you, either in a hospital or outside (like probably visits).
⁃ You have to enroll in this to get it, it's not free even after age 65.
⁃ You have to pay a $100/month premium, and there's still a deductible and co-pay.
• Part C (1997)
⁃ Medicare would start buying health insurance for someone, by paying the premium for the insurance.
⁃ You can elect to be covered under part C, where Medicare would buy you a policy, instead of relying on part A or B.
⁃ This was really good because if you elected for this, sometimes the private health insurance would cover prescriptions, which isn't covered under A or B.
⁃ About 1/4 of all Medicare's expenses are used for this.
• Part D (2003)
⁃ This was controversial, but it gave was covering prescription drugs as well, if you had Part A and part B (didn't elect for part C).
⁃ It was controversial because no new taxes were added to pay for it, so it was adding to the deficit.
• Medicaid
⁃ Designed for the poor, and if you are disabled you can get long term care through Medicaid.
⁃ A collaboration between the federal government and the state government.
⁃ The federal government will generally pay at least 50% and sometimes more, and the rest is left to the state.
⁃ You have to show that you don't have the means to pay, and it covers your children too.
⁃ The states can set different thresholds for who can get on medicaid.
⁃ NY allows people to be up to 400% of the federal poverty line to get Medicaid, whereas NC is 200%.
⁃ Obamacare created a uniform standard, so if you were making 133% of FPL or less, even if you didn't have kids, you would be eligible for Medicaid.
⁃ The federal government said they would pay 90%-100%, and 10% from the state after many years. But supreme court said they couldn't force the states to do this.
⁃ As of now, about half of states have accepted expansion.
• Uninsured people:
⁃ Cost for a single person is about $6,000/year.
⁃ One reason being uninsured is so much money compared to being insured is because the insurance companies negotiate the prices of things.
⁃
Health Insurance:
• HMO vs PPO vs EPO
⁃ HMO is the most limited basically, and is meant if you only really see your primary care provider (PCP), will require a referral for a specialist. If you see someone out of network or without referral, you'll pay full price, which is a lot.
⁃ PPO means you don't need referrals to see a specialist. They'll cover some costs if you go out of network, but it's more expensive than in-network. PPOs also give you access to out of state providers, but the premiums cost more.
⁃ EPO is a mix between the two.
• They negotiate the prices of things for you, like the cost of an IV, etc. The hospital might charge multiple dollars for a Tylenol, but the insurance company will negotiate these costs down. This is one great benefit of having insurance, is you get these reduced prices.
Copays and deductibles:
• Over the counter medicine: just paying out of pocket, no insurance covering.
• Prescription: doctor writes prescription, goes to pharmacist who fills the prescription, and it's paid for a combination of insurance and an out of pocket contribution.
• Co-pay, say on a medicine of $200:
⁃ You pay a contribution of $10.
⁃ The insurance pays $190.
• Another way a patient might have to pay for medicines is using deductible:
⁃ You pay all $200, but once you hit your deductible, say $400, then the insurance company will pay everything after $400.
Prescriptions:
• Brand name vs generic
• Basically a drug company discovers a drug, then they have a patent for it and they give a brand name to the drug.
• Then after the patent expires a couple years later, then other companies are allowed to make the same drug. The drug is exactly the same, it's just the brand name that's different. Because the company was first, they charge a high price, and can continue doing so for a while because they grew a report for their brand.
• Insurance companies might tell you to get the generic version, because it's less money for them, and they'll reward you with no co-pay or a lower co-pay.
• Your insurance might not cover the more expensive drugs that you get prescribed if they believe another drug will work better and be cheaper.
⁃ If it's covered, it's called the "formulary" drug
⁃ If it's not covered, it's called the non-formulary.