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pam study guide - Questions that will be on exam(I think...

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Questions that will be on exam (I think) Differentiate between the different kinds of equity? Progressivity (Vertical Equity) o Government ought to redistribute at least some resources from the better off to those with lower incomes, greater health problems, etc o Goal is to reduce inequality in the society or to assure that people are able to meet certain basic needs o Can be met by directing public expenditures to the needier or by adjusting tax burdens according to ability to pay Horizontal Equity o People in equal circumstances ought to be treated equally o People with equal levels of economic well being, according to this principle should pay equal amounts of taxes Individual Equity o The taxes an individual pays government should be related to benefits received o In context of social insurance it means that insurance protection should be related to premiums paid What were the original four principles social security was based on? 1. Progressivity 2. Horizontal equity 3. Individual equity 4. Economic efficiency a. Society ought to get the most out of its limited resources What are the four different Social Security Trust Funds? 1. Old Age and Survivors Insurance (OASI) a. Pays retirement and survivors benefits b. Financaed from payroll taxes on earnings that are paid by employees and their employers 2. Disability Insurance (DI) a. Pays disability benefits 3. Hospital Insurance a. Pays for inpatient hospital and related care b. Financed from payroll taxes on earnings that are paid by employees 4. Supplementary Medical Insurance (SMI) a. Part B: pays for physician and outpatient services b. Part D: covers prescription drug benefits c. Financed by general revenues and premiums Differentiate between Medicaid and Medicare Medicaid
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o Dominant public program for financing basic health and long term care services for low income americans o Jointly funded by federal and state funds o Administered by states o Covers only 46% of poor and near poor o Half of Medicaid beneficiaries are children Medicare o Major public health care program for the elderly the disabled and peopelw ith end stage renal disease o Part A: Hospital insurance Accounts for 2/3 of program costs Funded by HI trust fund All 65+ are eligible to receive benefits if on SS o Part B: supplemental medical insurance Accounts for 1/3 of program costs Funded b SMI trust fund Funded by beneficiaries and general revenues o Part D: supplemental prescription drug coverage Voluntary prescription drug program Paid through by premiums Patient costs: 25% of $251-$2250; 100% 2251-5100; 5% above $5100 o Problems with Moral hazard: cost sharing so low, particularly those with supplemental insurance that beneficiaries have no incentive to limit care or choose between care options Overprovision of care: providers are paid for fee-for service and therefore have incentive to provide more services Describe the difference between PPO/HMO/POS? (be able to tell which is the best plan for a person)
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