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FinancingFinancing is necessary to obtain health insurance or to pay for health care services. For most privately insured Americans, health insurance is employment-based; that is, the employers finance health care as a fringe benefit. A dependent spouse or children may also be covered by the working spouse’s or working parent’s employer. Most employers purchase health insurance for their employees through an MCO or an insurance company selected by the employer. Small employers may or may not be in a position to afford health insurance coverage for their employees. In public programs, the government functions as the financier; the insurance function may be carved out to an HMO.InsuranceInsurance protects the insured against catastrophic risks when needing expensive health care services. The insurance function also determines the package of health services the insured individual is entitled to receive. It specifies how and where health care services may be received. The MCO or insurance company also functions as a claims processor and manages the disbursement of funds to the health care providers.DeliveryThe term “delivery” refers to the provision of health care services by various providers. The term providerrefers to any entity that delivers health care services and can either independently bill for those services or is tax supported. Common examples of providers include physicians, dentists, optometrists, and therapists in private practices, hospitals, and diagnostic and imaging clinics, and suppliers of medical equipment (e.g., wheelchairs, walkers, ostomy supplies, oxygen). With few exceptions, most providers render services to people who have health insurance. With a few exceptions, even those covered under public insurance programs receive health care services from private providers.
Delivering Health Care in America: A Systems Approach Chapter 1PaymentThe payment function deals with reimbursementto providers for services delivered. The insurer determines how much is paid for a certain service. Funds for actual disbursement come from the premiums paid to the MCO or insurance company. The patient is usually required, at the time of service, to pay an out-of-pocket amount, such as $25 or $30, to see a physician. The remainder is covered by the MCO or insurance company. In government insurance plans, such as Medicare and Medicaid, tax revenues are used to pay providers.Insurance and Health Care ReformIn 2009, there were 194.5 million Americans with private health insurance coverage (US Census Bureau 2012). The US government finances health benefits for certain special populations, including government employees, the elderly (people age 65 and over), people with disabilities, some people with very low incomes, and children from low-income families. The program for the elderly and certain disabled individuals is called Medicare. The program for the indigent, jointly administered by the federal government and state governments, is named Medicaid. The program for children from low-income families, another federal/state partnership, is called the Children’s Health Insurance Program (CHIP). In