Financing Healthcare

Financing Healthcare

It is essential to factor in the cost of healthcare in healthcare planning. The cost of healthcare in the United States is higher than in other nations. This negatively affects the economy. Healthcare costs in 2018 were approximately $ 3.6 trillion (CMS, 2020). The GDP spent on health is higher than those of other developed nations. Many individuals see these costs as unsustainable. Healthcare in the United States is catered for by government programs such as Medicaid and Medicare,  private health insurance, and out-of-pocket spending (Shrank et al., 2021). High healthcare costs increase the national debt increase the cost of other products, and there is a high disparity in access to healthcare since many individuals cannot afford to pay for insurance.

History of Private Insurance

Health insurance in the United States started with the Great Depression in the 1930s. Before private health insurance, the United States government made efforts to sponsor coverage of industrial sickness funds and workplace injuries. The Great Depression led many hospitals and doctors to develop insurance payment plans to ensure that they got paid for the healthcare services that they offered to their patients (Kongstvedt, 2013). An interesting thing to note is that managed care and conventional insurance were developed during this period. At the beginning of World War II, labor movement growth and the federal tax code promoted the emergence of employer-based insurance payments (Kongstvedt, 2013).

Medicare was implemented in 1965 to offer insurance coverage to older individuals, and it was similar to private insurance that was being used at that time (Kongstvedt, 2013). Commercial healthcare insurance payers aggressively competed with each other by offering low insurance premiums to large employers, which was determined by their lower claims experience. The federal government preempted state law insurance, which resulted in the rapid growth of self-insured employer coverage. In the 1980s, Managed care emerged due to the rising costs of healthcare services and the emergence of self-insured health insurance coverage (Kongstvedt, 2013). Managed care introduced selective contracts by introducing price competition. This revolutionized the healthcare market. There was a lot of backlash against it due to this. In the 200s, healthcare in the United States started rising rapidly, and efforts were made to encourage insured citizens to use high-deductible healthcare plans and pay more out-of-pocket (Kongstvedt, 2013). The Affordable Care Act  (ACA) was enacted in 2010, and it will change the insurance market in the United States.

Federal Laws in Private Insurance

Many laws govern private health insurance in the United States. ACA is a federal that affects employers and employees who are covered, seeking coverage or not seeking healthcare coverage. ACA requires all individuals to have healthcare insurance or pay penalties, and employers with more than fifty employees must provide insurance (Corlette et al., 2020). If these businesses do not pay the insurance, they risk penalties. This law also seeks to reduce the cost of healthcare services. According to ACA, states must set up online markets that enable citizens and small-scale businesses to combine resources and buy health insurance (Corlette et al., 2020).

The second law is COBRA law. This is a federal regulation affecting employers offering health insurance coverage. Under the COBRA law, if an employee is terminated, they are still eligible for healthcare coverage (Agarwal & Sommers, 2020). An employer must employ more than twenty individuals (Agarwal & Sommers, 2020). The third law is the Employee Retirement Income Security Act (ERISA). This is a regulation affecting employers in the private sector who provide healthcare coverage. ERISA governs appeals, claims, and employee benefits aspects (U.S. Department of Labor, n.d.). An employer should provide full information to their employees concerning the healthcare plan. The employer should also give notice to their employees when there are any significant changes made to the health insurance plan.

The final law is the Health Insurance Portability and Accountability Act (HIPAA). HIPAA is a federal act that affects employers who have employed two or more people. This law allows employees to obtain healthcare coverage when they change jobs or lose group health insurance regardless of their preexisting healthcare condition (Edemekong et al., 2021). An employee cannot be denied insurance due to a preexisting condition.

Consumer-Driven Healthcare

A consumer-driven health plan (CDHP) is a health coverage plan that allows employees, employers, or both to use pretax money to aid in the payment of medical expenses that are not covered by their healthcare plan/These healthcare plans are linked to integrated health reimbursement arrangements (HRAs) and health savings accounts (HSA) which enable the enrolled individuals to save money to help pay for expenses such as co-pays (Bundorf, 2016). A CDHP costs less, but the enrolled individuals will have more out-of-pocket spending compared to the traditional health plans.

To help minimize out-of-pocket spending, CDHP participants can use pretax money diverted to their HAS (Bundorf, 2016). The healthcare costs in CDHPs are typically lower, and hence, they are a cost-effective option for employers. CDHPs can be augmented with traditional healthcare plans to offer more options for individuals (Bundorf, 2016). CDHP can be an option for individuals who do not visit physicians frequently but want to have healthcare insurance if they fall sick. For an employee to be signed up for a CDHP, their employers must present a high-deductible health plan (HDDP) in which higher coverages are not effected until the participants pay larger deductibles (Bundorf, 2016). In comparison to traditional healthcare plans, CDHPs have higher deductibles. In HDHPs, employees have the option of saving their incomes in HSA or HRA.

CDHPs allow individuals to have some form of control over healthcare costs. The consumer gains financial incentives for wisely managing their financial spending. They also have greater options and control over the healthcare services they receive from their physicians. The consumer can be able to fund healthcare services in the event of a tragic healthcare event. Individuals who enter the healthcare market will pay for healthcare services from their savings accounts and spending accounts. After reaching their deductible, the insurance company will cover the remaining healthcare costs.

Nurses in Private Insurance

Health insurers are hiring more nurses since the ACA has increased the number of individuals with medical coverage. This is to ensure that there is coordinated care for the insured clients. United Health Group has been adding more nurses as part of its team. Other insurance payers, such as Blue Cross, Blue Shield, and Humana, are hiring more nurses. These opportunities are becoming available for nurses since reimbursements have shifted from volume-based fee-for-service healthcare to value-based care. In value-based care, reimbursements are based on healthcare quality and patient outcomes instead of the quantity of care (Teisberg et al., 2020). There is a need for the management of chronic healthcare conditions. This is the reason why many insurance companies are hiring nurses.

Health laws in insurance payments, such as ACA, encourage care coordination, ensuring the safety and quality of healthcare services (Corlette et al., 2020). This allows nurses for nurses to be employed by private insurance companies. They can coordinate care with physician groups and hospitals to ensure quality healthcare services. Nurses can act as care coordinators and care management experts in the insurance companies they are employed in.

There are new value-based reimbursement models, such as accountable care organizations and patient-centered medical homes (Catalyst, 2017). Many insurance companies are reimbursing hospital and physician groups using these alternative value-based reimbursement models. In these value-based models, nurses are part of a multidisciplinary healthcare team. They coordinate with physicians to ensure patients take their medications as prescribed and dietary and lifestyle modifications are adhered to by patients. Hospitals get incentives to improve the quality of care and reduce costs in models such as ACOs (Catalyst, 2017). Care coordination is a solution to the many healthcare challenges in the United States, such as high healthcare costs, poor quality, and poor patient experience. Care coordination is a primary role of nurses since it ensures efficient and effective use of healthcare resources.

Conclusion

Healthcare services in the United States are costly compared to other developed nations. Health care in the United States is financed by federal plans such as Medicaid and Medicare, out-of-pocket spending, and private insurance companies. The onset of private insurance can be dated back to the Great Depression, when hospitals had to look for ways to ensure they were paid for the healthcare services they offered. There are many laws that govern private insurance in the United States. They include ACA, COBRA, and HIPAA, among others. The consumer is becoming more and more empowered in healthcare spending. CDHP allows consumers to control the costs of healthcare. It helps consumers to pay for services not covered by their insurance plans. Care coordination is one of the primary roles of nurses. There are value-based models in which reimbursements are based on the value of care instead of quantity. This allows nurses in the insurance market to be employed as care coordinators and care managers.

References

Agarwal, S. D., & Sommers, B. D. (2020). Insurance coverage after job loss — The importance of the ACA during the COVID-associated recession. New England Journal of Medicine, 383(17), 1603-1606. https://doi.org/10.1056/nejmp2023312

Bundorf, M. K. (2016). Consumer-directed health plans: A review of the evidence. Journal of Risk and Insurance, 83(1), 9-41. https://doi.org/10.1111/jori.12141

Catalyst, N. (2017, January 1). What is value-based healthcare? NEJM Catalyst – Practical Innovations in Health Care Delivery. https://catalyst.nejm.org/doi/full/10.1056/CAT.17.0558

CMS. (2020, December 16). Historical. Centers for Medicare & Medicaid Services | CMS. https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsHistorical

Corlette, S., Blumberg, L. J., & Lucia, K. (2020). The ACA’s effect on the individual insurance market. Health Affairs, 39(3), 436-444. https://doi.org/10.1377/hlthaff.2019.01363

Edemekong, P. F., Annamaraju, P., & Haydel, M. J. (2021, February 4). Health Insurance Portability and Accountability Act. National Center for Biotechnology Information. https://www.ncbi.nlm.nih.gov/books/NBK500019/

Kongstvedt, P. R. (2013). Essentials of managed health care (6th ed.). Jones & Bartlett Learning.

Shrank, W. H., DeParle, N., Gottlieb, S., Jain, S. H., Orszag, P., Powers, B. W., & Wilensky, G. R. (2021). Health costs and financing: Challenges and strategies for a new administration. Health Affairs, 40(2), 235-242. https://doi.org/10.1377/hlthaff.2020.01560

Teisberg, E., Wallace, S., & O’Hara, S. (2020). Defining and implementing value-based health care. Academic Medicine, 95(5), 682-685. https://doi.org/10.1097/acm.0000000000003122

U.S. Department of Labor. (n.d.). Employee Retirement Income Security Act (ERISA). https://www.dol.gov/general/topic/retirement/erisa

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Assignment:

Financing Healthcare

Consider how compensation for healthcare services shapes the delivery of care and reflects policy and policy changes, and write a paper that addresses the bullets below. Be sure to completely address each bullet point. There should be four (4) sections in your paper, one for each bullet below. Separate each section in your paper with a clear, brief heading that allows your professor to know which bullet you are addressing in that section of your paper. Include a “Conclusion” section that summarizes all topics. This assignment will be at least 1250 words.

This week, you will reflect upon accountability in healthcare finance to address the following:

Discuss the history of private health insurance and management care and how it is involved in the healthcare industry.
Identify the key federal laws that protect individuals who are enrolled in private insurance.
Briefly discuss consumer-driven healthcare and the empowerment of the healthcare consumer.
Explore the opportunities that have emerged for nurses within the private insurance market.

Assignment Expectations

Length: 1250-1500 words in length

Structure: Include a title page and reference page in APA format. These do not count towards the minimal word amount for this assignment. Your essay must include an introduction and a conclusion.

References: Use the appropriate APA style in-text citations and references for all resources utilized to answer the questions. A minimum of two (2) scholarly sources are required for this assignment.