Essay on Blue Cross Blue Shield Case Analaysis

Submitted By Amir-Mehrbakhsh
Words: 1645
Pages: 7

1.) Define the following terms: insurance premium, co-payment, HMO, MLR, Medicare, Medicaid, pre-existing condition, community rating rule, guaranteed issue rule. You may use the Internet but rephrase in your own words rather than copy-paste.

Insurance premium: A health premium can be defined as a monthly fee paid to an insurance company to provide health coverage. This premium covers things as small as routine doctor visits to more serious hospitalizations. While the individual insured can make payments, companies usually provide organization-funded insurance for their employees as an employment benefit.

Co-payment: A fixed sum of money, paid every time an individual goes to get any sort of health service. The cost usually varies depending on how serious the treatment is.

HMO: HMO (Health Maintenance Organization) is usually a term linked with PPO (Preferred Provider Organization). These two organizations provide a liaison between healthcare services and patients by creating a network of providers who agree to supply services to members. The way that these programs differ is that PPO offers a wider variety of options, don’t require referrals, and usually have higher costs. Through these services the main goal is to cut out the struggle in finding doctors that work jointly with your health care provider.

MLR: MLR (Medical Loss Ratio) is a system developed through the Affordable Care Act to provide health plans a more effect financial measurement tool to value their customers. This value will be given as a ratio based off of the percentage of the premium that is paid back to its customer through medical claims and treatments. The reason for the implementation of this policy was to ensure that funds were readily available to provide to customers in need and prevent insurance companies from spending overly significant amounts of money on overhead expenses such as marketing campaigns. Through the Affordable Care Act, a minimum rate that health plan providers must reach in terms of money dedicated to customers was set, as a protection mechanism for customers.

Medicare: Medicare is a social program administered by the United States government with the purpose of guaranteeing access to health care plans for Americans 65 years or older. The significance in this plan is that it is very difficult for older citizens to gain access to private insurers at a reasonable price because of the risk that accompanies their advanced age. This program is funded through tax dollars and lately has been heavily criticized as being ineffective and a waste of tax dollars.
Medicaid: Medicaid, similar to Medicare, is a national social program, however with the intention of providing support to low-income families and individuals. The government establishes a benchmark of income for which they deem is insufficient to pay for insurance and offer any adult or dependent under that level eligible to receive support. This program however has a multitude of restrictions such as proof of US citizenship or permanent residence. Regulation however has recently been modified to include a wider range of individuals. Through the Patient Protection and Affordable Care act, individuals with an “income up to 133% of the poverty line” are considered eligible.
Community rating rule: This is a government policy intended to protect individuals from medical underwriting and policy price discrimination based off of their individual health status. This policy requires that health insurance providers create consistent policies standards within a given area. In doing this, customers, regardless of health stature, are given access to the same types of policies at the same price. Beforehand, health providers had factored in details such as gender, age, family history, and other aspects when offering plans which led to significant price discrimination.

Guaranteed issue rule: The Guaranteed issue rule (Medi-Gap) is a certain set of rights that, under