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Unformatted text preview: EmployerSponsored Insurance and EmployerSponsored Insurance and Public Programs for Health Care
Class 20 Loyola University Chicago Prof. Tim Classen March 16, 2011 Class Outline EmployerSponsored Health Insurance
Who benefits, who loses? How regressive? Public Programs in Health Care
Training Insurance ESI EmployerBased Coverage EmployerBased Coverage
Tax subsidy results in majority of coverage via employer Roughly $700 billion spent on employer based coverage annually How regressive is system? Employers benefit from healthier workers Employees benefit from less missed work and group coverage (vs. individual) May create “job lock” ¾ from employer, ¼ from employee Percent of Firms Offering Health Benefits by Firm Size Percentage of All Workers Covered by Their Employers’ Health Benefits, in Firms Both Offering and Not Offering Health Benefits, by Firm Size, 19992010* *Tests found no statistical difference from estimate for the previous year shown (p<.05). Source: Kaiser/HRET Survey of EmployerSponsored Health Benefits, 19992010. Loyola Health Insurance Loyola Health Insurance Options Value to consumer of tax subsidy by Value to consumer of tax subsidy by family income level Value of Benefit based on Marginal Tax Rate Cost to Government of subsidies to Cost to Government of subsidies to health insurance via the tax system Equity (or lack thereof) of Tax Subsidy Equity (or lack thereof) of Tax Subsidy Public Programs for Public Programs for Medical Care Reasons for Intervention Risk sharing (Govt as insurer) Equity Market Failures Supply Side Demand side Types of Public Programs Incentive Effects Problems/Concerns and Scheduled Reforms Federal and State Governments now pay over $1 trillion annually for health care services Types of Public Health Care Types of Public Health Care Interventions Demand side Subsidize insurance via tax system Medicare for elderly and disabled Medicaid for certain low income groups CHIP for lower income children and in some cases parents Supply side Community health centers VA system Subsidies to educate providers Subsidies to build facilities NIH research What lies behind a role for What lies behind a role for government health programs? Externalities Public health – reduce spread of disease & improve productivity Transmittable diseases impose costs on others, so govt. may intervene to limit spread of communicable diseases (AIDS, tuberculosis, etc.) Concern over suffering of others (disabled, poor, elderly) Market failures Immunizations Clean water No private firms willing to supply health insurance for elderly or disabled (Medicare/Medicaid) Large positive spillovers from medical research, but too costly for private firms (NIH) Costs of Public Programs for Costs of Public Programs for Health Insurance
Program costs at core are a function of N = number of enrollees (eligibility) P = price paid for services (reimbursement rates) Q = amount of services (extent of coverage) C = N*(P*Q) + Administrative costs How to reduce/control costs: Reduce N by changing eligibility, increasing the costs of enrolling (eliminate presumptive eligibility; require more evidence of income, increase frequency of need to establish eligibility.) Reduce P via reimbursement (or shift greater share to patient) Reduce Q by changing reimbursement to capitation; requiring utilization review; threatening to eliminate providers from eligibility to participate in plan based on profile Contracting for services at only certain locations. Making obtaining care more costly in terms of time (to get appointment, to get to provider, wait) ...
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This note was uploaded on 04/14/2011 for the course ECON 329 taught by Professor Classen during the Spring '11 term at Loyola Chicago.
- Spring '11