The American healthcare system is very advanced and professional in comparison to the rest of the world. They are always trying to find out better ways to protect their citizens with a better plan of health insurance and keep away health insurance companies from fraud and abuse. In the following article, we will discuss the American healthcare system and insurance structure.
Health insurance is a security contract between a policyholder and an insurance company or government-organized program to reimburse the policyholder for all or a portion of the cost of rendered service by health care professionals. Generally, this reimbursement goes directly to the provider of services.
There are different types of insurance companies (or carriers) and different types of plans provided by the USA healthcare system. A carrier is an insurance company. An insurance company may offer different types of plans or products i.e an HMO product, a PPO product. Insurance companies tend to serve a particular region or State.
Ex- Empire Blue cross Blue shield is an insurance company in New York State. BCBS offers a number of plans including. an HMO product, a PPO product, a Health Savings Account plan (HAS), and many others.
Government-Sponsored Health Care Plans:
There are 3 government funded programs 1- Medicare, 2- Medicaid, 3- Workers Comp. All these programs provide insurance for a particular group of individuals. Most people receive insurance through commercial carriers as provided by the employer.
Medicare
Medicare is a federal insurance program for people who are 65 years of age or older, people of any age with permanent kidney failure and certain disables people under 65 years. Medicare is administered by The Center for Medicare and Medicaid Services of the US Department of Health and Human Services.
Medicare has 4 parts
- Medicare Part A- This is for Hospital claims.
- Medicare Part B- This is for professional or physician claims.
- Medicare Part C- This is also called Medicare Advantage Plan of MA plan.
- Medicare Part D- This is for pharmacy or drug coverage.
Medicare medical insurance pays 80% of reasonable physicians fees and related medical charges minus the deductible amount. It pays 50% for mental health and 100% for lab works, including lab services provided in the Doctors office.
CMS also outsources the administration of the private plans called intermediaries. These intermediaries will administer the claims submitted by beneficiaries in a particular region or State.
Eg- BCBS is the financial intermediary for Medicare Part B for beneficiaries in New Jersy and New York For residents and providers Connecticut, first coast service options are the intermediary.
Medicaid
This is a financial assistance program sponsored jointly by the Federal Government and State govt to provide healthcare for low-income people and families.
If a person can be “dual eligible” if they are over 65 years of age and are now low income, in that case, Medicare is the primary insurance, and Medicaid will pay deductibles. Not covered by Medicare. Each state has its own Medicaid program with its own rule and regulations.
Workers Compensation
Workers’ compensation is a state insurance program that provides health care and income to the employee when an employee suffers a work-related injury, illness, and death. Insurance laws in each state required employers to purchase Workers Compensation insurance to cover their employees.
If any employees lost their job due to anyway so for providing him coverage of health insurance provided by the employer, the American healthcare system established law in the year 1985 called “COBRA- Consolidated Omnibus Budget Reconciliation Act, it is a Federal law and it allows a worker to continue his employer-sponsored health insurance for up to 18 months if anyone loses his job due to any cause.”
Commercial Insurance:
Commercial insurances also play a big role in the American Healthcare System. Commercial health insurance is for individuals under 65 years who are above the poverty line. This type of insurance is most often obtained through an individual’s employer. The employer will pay some part of the premium and the employee will pay some part.
It is important to remember that not everyone has insurance. There are a significant number of individuals in the United States who lack health insurance of any kind. These individuals are responsible to pay for services provided by health care providers from their own resources.
There are different types of plans provided by commercial insurance companies.
Health Maintenance Organization(HMO)
Health Maintenance Organization(HMO) consists of a network of physicians and hospitals in a particular geographic or service area. The patient has to choose a primary care provider(PCP) or gatekeeper, who is responsible for the patient’s healthcare and referrals to specialists and approve further medical treatments also.
Usually, the choice of doctors and hospitals is limited to those on the list (network)- since they have an agreement with the HMO to provide for a patients’s healthcare. However, exceptions may be made in emergencies or when medically necessary.
The drawback of these health insurance plans is that it can be difficult to get specialized care under the HMO plan since one must first obtain a network referral. Any healthcare cost from other providers, except in emergencies, is not covered.
Definition-
Primary Care Physician(PCP)- A physician that provides general medical care generally a family doctor, practitioner, internist, or for some plans a gynecologist.
Specialist- A physician who has had additional medical training and specializes in a particular area of the body like cardiologist, nephrologist, etc.
Preferred Provider Organization(PPO Plan)
In PPO plan an insurance company will be contracted with the group of medical care providers to provide services at lower than usual fees in return for prompt payment and a certain volume of patients.
Under a PPO plan, a primary care physician or gatekeeper physician is not required. In this plan, a specialist does not require a referral. But if one wants healthcare outside the network. A higher co-payment has to be paid.
Features of PPO Plans:
- Healthcare costs are low with in-network providers
- Can use any specialist including outside the plan
- A PCP is not a requisite
- Out of pocket expense is per year is limited
Point Of Service(POS)
This type of insurance incorporates features from both HMO and PPO members are encouraged, but not required to choose a primary care physician as a “Gatekeeper” to other healthcare services. Members may visit no-network providers but will pay a much higher deductible and co-pay.
Health Saving Accounts(HAS)
A Health Savings Account is a “personal saving account” funded by an employer to pay exclusively for the medical expenses of an employee. It is generally paired with a high deductible plan that it will pay for medical costs in the case of major illness.
No-Fault Insurance:
No-Fault insurance is a form of mandatory automotive insurance for many states. With No-fault insurance, accident victims are paid basic damages by the company that insured the vehicle in which they were driving. Damages are limited to actual medical and rehabilitation expenses, low wages, and necessary expenses for a limited amount of time.
American Healthcare System is administered and supervised by the American Medical Association (AMA) and the American Academy of Professional Coder (AAPC) and other government bodies of healthcare and insurance segments. All insurance companies and hospitals along with medical professionals like providers, nurses, lab technicians, etc have to follow guidelines of AMA under government healthcare rules.
Related Articles:
BCBS Prefix List | Alpha Lookup by State A-Z
Medicare Health Insurance Complete Guide
Dual Eligibility Medicare Medicaid
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