healthcare insurance

1. USA
Health Insurance
Model

2. Table of content
1. Introduction
2. Health Insurance Model
3. Private Health Insurance
4. Social Health Insurance
5. HMO
6. PPO & PPS
7. Scope of Private Health Insurance in USA
8. Conclusion

3. INTRODUCTION
Health insurance in the United States is any program that helps pay for medical expenses,
whether through privately purchased insurance, social insurance or a social welfare
program funded by the government.
The term "health insurance" is used to describe any form of insurance providing protection
against the costs of medical services. This usage includes both private insurance programs and
social insurance programs such as Medicare, Medicaid and the Children's Health Insurance
Program which both provide assistance to people who cannot afford health coverage.
In addition to medical expense insurance, "health insurance" may also refer to insurance
covering disability or long-term nursing or custodial care needs.

4. History:
The rise of employer-sponsored coverage
• Accident insurance was first offered in the United States by the Franklin Health Assurance Company of
Massachusetts. This firm, founded in 1850, offered insurance against injuries arising from railroad and steamboat
accidents. Sixty organizations were offering accident insurance in the US by 1866, but the industry consolidated
rapidly soon thereafter.
• While there were earlier experiments, sickness coverage in the US effectively dates from 1890. The first
employer-sponsored group disability policy was issued in 1911, but this plan's primary purpose was replacing
wages lost because the worker was unable to work, not medical expenses.
• Some of the first evidence of compulsory health insurance in the United States was in 1915, through the
progressive reform protecting workers against medical costs and sicknesses in industrial America. Prior to this,
within the Socialist and Progressive parties, health insurance and coverage was framed as not only an economic
right for workers health, but also as an employer’s responsibility and liability.
• President Harry S. Truman proposed a system of public health insurance on November 19, 1945, address. He
envisioned a national system that would be open to all Americans but would remain optional. Participants would
pay monthly fees into the plan, which would cover the cost of all medical expenses that arose in a time of need.
The government would pay for the cost of services rendered by any doctor who chose to join the program

5. Kerr-Mills Act
Still, private insurance remained unaffordable or simply unavailable to many, including the poor, the unemployed, and the
elderly. Before 1965, only half of seniors had health care coverage, and they paid three times as much as younger adults, while
having lower incomes. Consequently, interest persisted in creating public health insurance for those left out of the private
marketplace.
The 1960 Kerr-Mills Act provided matching funds to states assisting patients with their medical bills. In the early 1960s,
Congress rejected a plan to subsidize private coverage for people with Social Security as unworkable. Finally, President Lyndon
B. Johnson signed the Medicare and Medicaid programs into law in 1965, creating publicly run insurance for the elderly and the
poor. Medicare was later expanded to cover people with disabilities
Towards universal coverage
Persistent lack of insurance among many working Americans continued to create pressure for a comprehensive national health
insurance system. In the early 1970s, there was fierce debate between two alternative models for universal coverage. Senator Ted
Kennedy proposed a universal single-payer system, while President Nixon countered with his own proposal that employers to
provide coverage while expanding publicly run coverage for low-wage workers and the unemployed

6. Shortly after his inauguration, President Clinton offered a new proposal for a universal health insurance system. Like Nixon's
plan, Clinton's relied on mandates, both for individuals and for insurers, along with subsidies for people who could not afford
insurance.
Medicare:
In the United States, Medicare is a federal social insurance program that provides health insurance to people over the age of 65,
individuals who become totally and permanently disabled, end stage renal disease (ESRD) patients, and people with ALS
Medicaid:
In the United States is a federal and state program that helps with healthcare costs for some people with limited income and
resources. Medicaid also offers benefits not normally covered by Medicare including nursing home care and personal care
services. The main difference between the two programs is that Medicaid covers healthcare costs for people with low incomes
while Medicare provides health coverage for the elderly

8. Health Insurance Model
The US healthcare system can be defined as a mixed system, where publicly financed government Medicare and Medicaid health
coverage coexists with privately financed health insurance plans.
The Beveridge Model The Bismarck Model
National Health
Insurance Model
Out-of-Pocket Model
Relevance to the US:
similar to the Veterans
Health Administration
Relevance to the
US: similar to
Medicare
Relevance to the US: similar to
employer-based health care plans
Relevance to the US:
similar to treatment for
uninsured or underinsured
UK, Spain, New Zealand Germany, Japan, Switzerland India, China, South Africa
Canada, Taiwan, South Korea
1% 50% 14% 9%

10. PRIVATE HEALTH INSURANCE
Private Health
Insurance
Employment-based
By an employer or
union
Direct-purchase
Purchased directly
by an individual
Employment-based insurance
• Paid by businesses on behalf of their employees as
part of an employee benefit package
• Most private health coverage in the US is
employment-based
• The employer typically makes a substantial
contribution towards the cost of coverage – 85% of
the insurance premium for their employees, and
about 75% of the premium for their employees’
dependents
• Disadvantages to employees would be disruptions
related to changing jobs, the regressive tax effect
and increased spending on healthcare
Direct purchase
• Purchased by individuals, and not those provided through employers
• Self-employed individuals receive a tax deduction for their health insurance
• According to the US Census Bureau, about 9% of Americans are covered
• Average out-of-pocket spending is higher, with higher deductibles, co-payments and
other cost-sharing provisions
• Primarily regulated at the state level

11. 55.1 54.4
10.8 10.5
0
20
40
60
2018 2020
Percentage
of
coverage
Type of private health insurance
Coverage Rates Between 2018 and 2020
Employment-based Direct-purchase
87
66.7
52.2
0
20
40
60
80
100
Full-time
workers
Less than full-
time workers
Non-workers
Insurance
coverage
Work status
Private Health Insurance Coverage related
to Work status
Top Private Health Insurance Companies
in US:
• Cigna
• Humana
• UnitedHealth Group
• Kaiser Permanente
• Anthem
• Blue Cross Blue Shield Association
• Bupa
• Oscar Health
• Centene
• Health Care Service Corporation
(HCSC)

12. Social Health Insurance
Public insurance cover increased from 2000–2010 in part because of
an aging population and an economic downturn in the latter part of
the decade.
Government Health Insurance Plans
Funding for Medicaid and CHIP expanded significantly under the
2010 health reform bill
Medicaid / State
Health Insurance
Assistance Program
(SHIP)
Medicare
Military Health
System (MHS) /
Tricare
Children’s Health
Insurance Program
(CHIP)
Veterans Health
Administration
(VHA)
Indian Health
Service (IHS)

13. Medicaid Started in 1965
Health insurance program for certain
groups of the poor and covers p covers
preventive, acute, and long-term care
services for 25 million people, or 10
percent of the population
Beneficiaries:
Poor and aged - 13%
Blind 15 %
Disabled
Pregnant (Mothers and dependent
child) – 68 %
Parent of a dependent child- 4%
• Jointly financed by Federal and
State governments. The Federal
share of total expenditures ranges
from 50 to 83 percent, with the
poorer States receiving a higher
match from the Federal
Government.
• Childless, non-disabled adults
under 65 years of age, no matter
how poor or how high their
medical expenses, are not eligible,
nor are individuals with assets
above State-defined levels.
• Medicaid is the only public
program that finances long-term
nursing home care

14. Medicare Medicare is a uniform national
health insurance program for
the aged and disabled.
Administered by the Federal
Government, it is the single
largest health insurer in the
country, covering about 13
percent of the population,
including virtually all the
elderly 65 years of age or over
(31 million people), and certain
persons with disabilities or
kidney failure (3 million
people)
• The program is
financed by a
combination of payroll
taxes, general Federal
revenues, and
premiums
• Different parts:
Medicare Part A
Medicare Part B
Medicare Part C
Medicare Part D

15. Part A Coverage:
Short stay hospital inpatient services
Skilled nursing facilities
Home health services
Hospice care
Part B
• Covers physician care and OPD services
• Optional Benefit
• Beneficiaries are paying Monthly premium
• Includes deductibles, co-payments and costs for non-
covered services
Medicare part A,B,C,D
Part C
Medicare Advantage – Medicare + Choice Program
Part D
Coverage for outpatient prescription drugs
As part of the Medicare Modernization Act of 2003
and took effect during 2006

16. Military
Health
System
A form of nationalized health care operated
within the United States Department of
Defense that provides health care to active
duty, Reserve component and retired U.S.
Military personnel and their dependents.
The MHS also provides health care, through
the TRICARE health plan, to:[3]
Active duty service members and their
families,
retired service members and their
families,
Reserve component members and their
families,
surviving family members,
Medal of Honor recipients and their
families
some former spouses, and
others identified as eligible in the Defense
Enrollment Eligibility Reporting System
Tricare Reserve Select
• Premium-based health plan that active status
qualified National Guard and Reserve members
may purchase.
• It requires a monthly premium and offers coverage
similar to Tricare Standard and Extra for the
military member and eligible family members.
Tricare Reserve Retired
• Premium-based health plan that qualified retired
members of the National Guard and Reserve under
the age of 60 may purchase for themselves and
eligible family members.
• Established in 2008 and opened for enrollment in
2010, it is similar to Tricare Reserve Select (TRS)
but differs in that there is no premium cost-sharing
with DoD as there is with TRS.
• .Payments could range as high as $900.00 a month.
Tricare Young Adult (TYA)
• Premium-based health care plan available for
qualified dependents who have aged out of Tricare
at age 21, or age 23 for full-time college students.
• Dependents are eligible if they are unmarried, not
eligible for either Tricare coverage or their own
employer-sponsored health care coverage, and their
sponsor is Tricare eligible

17. CHIP
Started in 1997
For low-income children not eligible for traditional
Medicaid program
Uninsured children who reside in families with
incomes below 200% of FPL or whose family has an
income 50% higher than state’s Medicaid eligibility
threshold
Jointly financed and administered by the Federal
Government and Individual State Governments
• Providing healthcare and healthcare-adjacent services
to Veterans through the administration and operation of 146 VA
Medical Centers (VAMC) with integrated outpatient clinics, 772
Community Based Outpatient Clinics (CBOC), and 134 VA
Community Living Centers (VA Nursing Home) Programs.
• VHA is especially praised for its efforts in developing a low
cost open source electronic medical records system which can be
accessed remotely (with secure passwords) by health care
providers
• To be eligible for VA health care benefit programs one must have
served in the active military, naval or air service and separated
under any condition other than dishonorable
• Inclusions: Non-Medical Care
 Primary and Secondary Care Family Caregiver Program
 Mental Health Residential Care
 PTSD VA Travel Reimbursement
 Women Veterans Program
 Dental Care
Veteran Health
Administration (VHA)

18. IHS An operating division (OPDIV)
within the U.S. Department of
Health and Human
Services (HHS).
IHS is responsible for
providing direct medical
and public health services to
members of federally-
recognized Native American
Tribes and Alaska Native
people.
• The IHS provides health
care in 37 states to
approximately 2.2 million out
of 3.7 million American
Indians and Alaska Natives
(AI/AN)
• As of April 2017, the IHS
consisted of 26 hospitals,
59 health centers, and 32
health stations.
• Eligibility : To qualify for
health benefits from the IHS,
individuals must be of
American Indian and/or
Alaska Native descent and
be a part of an Indian
community serviced by IHS.

19. OBAMACARE
The Patient Protection and Affordable Care Act is a federal statute
signed into law by President Obama, which made it mandatory for
every citizen to have health insurance or be penalized.
The Affordable Care Act allowed parents to add their children up to the
age of 26 to their policies, in a bid to have younger healthy people
paying premiums.
The original coverage requirement in Obamacare included a tax
penalty for those that did not purchase a health insurance plan.
Obamacare insurance is typically referring to individual and family
plans bought on the health insurance Marketplace created to help
implement the Affordable Care Act.
Obamacare costs will depend on your age, location, household size,
and income, as well as the type of health insurance plan you choose.

20. ADVANTAGE
More Americans have health insurance
More than 16 million Americans obtained health insurance coverage within the first five years of the ACA. Young adults
make up a large percentage of these newly insured people.
Health insurance is more affordable for many people
Insurance companies must now spend at least 80 percent of insurance premiums on medical care and improvements.
People with preexisting health conditions can no longer be denied coverage
A preexisting condition, such as cancer, made it difficult for many people to get health insurance before the ACA. Most
insurance companies wouldn’t cover treatment for these conditions.
Under the ACA, you can’t be denied coverage because of a preexisting health problem.
DISADVANTAGE
Taxes are going up as a result of the ACA
Several new taxes were passed into law to help pay for the ACA, including taxes on medical device and pharmaceutical
sales. Taxes were also increased for people with high incomes. Funding also comes from savings in Medicare payments.

21. Health Maintenance Organization (HMO)
 An insurance structure that provides
coverage through a network of physicians
 Established under the Health Maintenance
Organization Act of 1973
 Organized public or private entity
 Secures its network of health providers by
entering into contracts with PCPs, clinical
facilities, and specialists
 Agreed-upon fee to offer a range of
services to the HMO’s subscribers
 Pre-agreed fee allows lower premiums than
other types of health insurance plans
 Primary Care Physician (PCP) is the first
point of contact
 Examples are Cigna, Humana, Aetna

23. PPO (Preferred Provider Organization)
• Health insurance plan designed for individuals and families.
• PPOs involve networks that are made up of contracted medical professionals and
health insurance companies
Working of Preferred Provider Organizations (PPOs)
PPO
Medical
Profession
als and
facilities
Health
Care
Profession
als
Primary and
Specialty
Physicians
Hospitals Insuranc
e
Providers
Subscribed
Participant
s
Provide Rate lower than typical charges
Fee to access the
network of providers

24. Consideration
 High Premium- Costlier to administer
and manage
 Participants are responsible for co-
payments, which are payed directly to
provider.
 There are deductibles that patient must
meet before plan starts.
 Participants are allowed to visit out of
network facilities, usually at higher cost
- excess charge is passed on to the
patient.
Benefits
 Degree of flexibility- offers more options
than others available in market
 Large networks- with providers in many
cities and states
 Value to participants- accessing one in
urgent situations
 No referral needed
 Wider choice of hospitals and doctors

25. Difference Between a PPO and a POS(Point of
Service)
PPO
• More Flexible
• No need of Primary care Physician for
referral
• More expensive
• Premiums are high
• Usually come with deductibles that must
be met before your coverage begins.
POS
• Less Flexible
• Requires to have Primary care physician to
refer a specialist
• Lower fees
• The premiums for a POS plan fall between
the lower premiums offered by an HMO and
the higher premiums of a PPO.
• POS plans also do not have deductibles for
in-network services, which is a significant
advantage over PPOs.

26. HIPAA
HIPAA stands for Health Insurance Portability and Accountability Act.
Passed in 1996 HIPAA is a federal law that sets a national standard to protect medical records and other personal health information
Portability: Portability ensures that as people move from one plan to another they will have continuity of coverage and will not be denied
coverage under pre-existing clauses.
Accountability: To ensure security and confidentiality and sets the standards and the methods for how medical data is shared.
Basic Terms
Protected Health Information (PHI): Individually identifiable health information like name, age, gender, phone number, social security
number etc...,
Covered Entity: A covered entity is a healthcare provider like hospitals, nursing homes, pharmacies involved in the transmission of protected
health information (PHI).
Business Associate: Any organisation that functions on behalf of covered entity Eg: Billing and coding vendors.

27. Rules
HIPAA Privacy Rule: The HIPAA Privacy Rule sets national standards for patients’ rights to PHI. The
HIPAA Privacy Rule applies to covered entities and business associates.
HIPPA Security Rule: The HIPAA Security Rule sets national standards for the secure maintenance,
transmission, and handling of ePHI, including physical, administrative, and technical safeguards. The
HIPAA Security Rule applies to both covered entities and business associates.
HIPAA Breach Notification Rule: The HIPAA Breach Notification Rule is a set of standards that covered
entities and business associates must follow in the event of a data breach containing PHI or ePHI.
HIPAA Omnibus Rule: HIPAA regulation that was enacted in order to apply HIPAA to business
associates, in addition to covered entities. The HIPAA Omnibus Rule mandates that business associates
must be HIPAA compliant

28. Scope of Private Health Insurance in USA
• Improve coverage of diseases and
condition like
Cancer, Diabetes, Pregnancy,
Stroke
• Consolidation
Allowing more people with
more affordable plans
• Customer relation management
Development of long term
relation with clients
• Technological Enhancement
• Value
balance of cost and care
• Diversification
new products and services

29. Conclusion
•In 2020, 8.6 percent of people, or 28.0 million, did not have health insurance at any point during the year.
•The percentage of people with health insurance coverage for all or part of 2020 was 91.4.
•In 2020, private health insurance coverage continued to be more prevalent than public coverage at 66.5 percent and 34.8 percent, respectively.
Of the subtypes of health insurance coverage, employment-based insurance cover 54.4 percent of the population , followed by Medicare (18.4
percent), Medicaid (17.8 percent), direct-purchase coverage (10.5 percent), TRICARE (2.8 percent), and Department of Veterans Affairs (VA) or
Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA) coverage (0.9 percent).
•Between 2018 and 2020, the rate of private health insurance coverage decreased by 0.8 percentage points to 66.5 percent, driven by a 0.7
percentage-point decline in employment-based coverage to 54.4 percent.
•Between 2018 and 2020, the rate of public health insurance coverage increased by 0.4 percentage points to 34.8 percent.
•In 2020, 87.0 percent of full-time, year-round workers had private insurance coverage, up from 85.1 percent in 2018. In contrast, those who
worked less than full-time, year-round were less likely to be covered by private insurance in 2020 than in 2018 (68.5 percent in 2018 and 66.7
percent in 2020).
•More children under the age of 19 in poverty were uninsured in 2020 than in 2018. Uninsured rates for children under the age of 19 in poverty
rose 1.6 percentage points to 9.3 percent.