Health Insurance Basics

Written by: Evelyn Huang, MD (NUEM ‘24) Edited by: Vytas Karalius, MD, MPH (NUEM ‘22)
Expert Commentary by: Cedric Dark, MD, MPH

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Health Insurance: The Basics Every Doctor Should Know

A Brief History of Insurance in the U.S.

• In 1929, teachers in Dallas contracted with Baylor University Hospital to have monthly payments in exchange for up to 21 days of inpatient care a year. By 1937, there were 26 similar plans that all combined to form the Blue Cross network. In the 1930s, physicians also formed a network of insurance plans known as Blue Shield [1].

• During World War II, wage controls prevented employers from raising salaries. As a result, they started to offer health insurance. The IRS added that employers and employees did not have to include these costs in their taxable income [1].

• In 1944, President Franklin Roosevelt called for an “Economic Bill of Rights” that included the right to medical care that was never passed. President Truman proposed national health insurance for all Americans that was unpopular due to anti-communist sentiment [1, 2].

• In 1965, Medicare and Medicaid were created. In 1972, Medicare was extended for people under 65 who had long-term disabilities and/or end-stage renal disease [2].

• In 2010, the Patient Protection and Affordable Care Act (ACA) was passed [2].

Medicare Basics

As of 2019, Medicare covers approximately 61.4 million people [4]. Medicare is federally-run and has four parts:

• Part A: inpatient services, nursing care, home health

• Part B: outpatient services, ED visits

• Part C: “Medicare Advantage,” enrolling in Medicare benefits through private insurers

• Part D: prescription medications

Medicaid Basics

As of 2019, Medicaid covers approximately 75.8 million people and includes low-income adults, pregnant, and children [4]. Medicaid is unique from Medicare in that it is state-run with set federal regulations. The Affordable Care Act expanded eligibility to households with income up to 138% of the federal poverty level [2]. To date, 39 states including DC have adopted this expansion and 12 states have not, as seen in the map below [5].

Medicaid also includes the Children’s Health Insurance Program (CHIP) for children living in households that are under 200% of the federal poverty level and is state-run [2]. As of 2019, CHIP covers approximately 7.2 million children [4].

Patients that come to the emergency room are also able to apply for emergency Medicaid if they are currently uninsured. The details of this vary from state to state.

The Affordable Care Act

Signed into law 2010, the Patient Protection and Affordable Care Act had three main goals: expanding healthcare coverage, decreasing health care costs, and improving health care delivery.

• Expanding healthcare coverage

  • Medicaid expansion

  • Individual mandate (discussed in “Private Insurance Basics”)

  • Requirements for employers to offer health insurance plans

  • Dependent coverage for children up to age 26

  • Removed insurance exclusions for patients with pre-existing conditions

• Decreasing health care costs

  • Tax credits for small business employers that purchase health insurance for employees

  • Creation of health insurance exchanges

  • Insurance market rules, such as limiting deductibles and prohibiting lifetime limits of coverage

  • Discounts for prescription drugs for patients covered by Medicare

• Improving health care delivery

  • National quality improvement strategies

  • Required health plans to cover preventative services

  • Bonus payments for primary care physicians

  • Grants for wellness programs

  • Required chain restaurants to disclose nutritional content

For more information on the ACA, visit this website.

Private Insurance Basics

The ACA enacted an individual mandate, which required Americans to have health insurance or face a tax fee. However, the individual mandate penalty was repealed starting in 2019. Private insurance can be purchased individually, through an exchange/marketplace (third-party markets created by the ACA) or is provided by employers [2].

The ACA also set up 10 essential health services that must be covered with insurance plans. This includes hospitalizations, ambulatory services, lab tests, prescriptions, and emergency services [7].

There are different types of private health insurances, and it is important to have a basic knowledge of this when caring for your patients [9]:

• HMO (Health Maintenance Organization): you choose a primary care physician (PCP) that is in-network, you will need a PCP referral for any specialists, no out-of-network care is covered

• PPO (Preferred Provider Organization):  you can choose in-network providers (typically lower cost) or out-of-network providers, no referral needed for specialists

• EPO (Exclusive Provider Organization): does not cover out-of-network providers, but do not need a referral for specialists

• POS (Point of Service): you have a PCP that is in-network and that must give you a referral to see a specialist, but you can also access out-of-network options for a higher cost

• Catastrophic plan: only available for people under 30 or with a hardship exemption (affordability exemption), low premium and high deductible, theoretically only used for serious illness

Insurance plans on the marketplace also have different metal tiers to their plans. As you go up in tiers, the insurance company pays more when you get healthcare, with a higher associated monthly premium. If someone utilizes a lot of health care, a higher tier choice is better [8].

• Bronze: lowest premium, higher cost that you must pay when obtaining care, high deductible

• Silver: moderate premium, moderate cost when obtaining care

• Gold: high premium, low cost when obtaining care, low deductible

• Platinum: highest premium, lowest cost when obtaining care, low deductible

Insurance Definitions You Should Know

• Premium: monthly payment to insurance company regardless of whether you use the insurance

• Deductible: how much you pay for health services before insurance starts to pay

  • Plans with lower premiums typically have higher deductibles

  • Usually, you will still need to pay copays and coinsurance if you reach your deductible until you meet your out-of-pocket maximum

• Out-of-pocket maximum: after this level, insurance will pay for 100%

  • Includes deductible, copay, and coinsurance

  • The ACA established that policies must include an out-of-pocket maximum

    • For 2020: $8,150 for an individual and $16,300 for a family [9]

• Copay(ment): fixed payment for specific service or medication

  • E.g. You pay $20 every time you see your PCP

• Coinsurance: Percentage of cost that you pay before the out-of-pocket maximum

  • E.g. You pay 20% every time you see your PCP

Part of medical care is knowing that there is an associated cost with every test and treatment that we use. Medical insurance is essential to this, and it is important to know the basic ideas and language surrounding insurance, so that we can better serve our patients.

References

1.     Moseley III GB. The U.S. Health Care Non-System, 1908-2008. AMA Journal of Ethics. 2008;10(5):324-331.

2.     Schlicher N, Haddock A. Emergency Medicine Advocacy Handbook. 5th ed. Irving: Emergency Medicine Residents’ Association; 2019:1-8.

3.     What's Medicare?. Medicare.gov. https://www.medicare.gov/what-medicare-covers/your-medicare-coverage-choices/whats-medicare. Accessed August 18, 2020.

4.     CMS Fast Facts. Cms.gov. https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/CMS-Fast-Facts. Published 2020. Accessed August 18, 2020.

5.     Status of State Medicaid Expansion Decisions: Interactive Map. KFF. https://www.kff.org/medicaid/issue-brief/status-of-state-medicaid-expansion-decisions-interactive-map/. Published 2020. Accessed August 18, 2020.

6.     Summary of the Affordable Care Act. KFF. https://www.kff.org/health-reform/fact-sheet/summary-of-the-affordable-care-act/. Published 2013. Accessed November 10, 2020.

7.     Norris L. Obamacare's essential health benefits. healthinsurance.org. https://www.healthinsurance.org/obamacare/essential-health-benefits/. Published 2020. Accessed August 18, 2020.

8.     The 'metal' categories: Bronze, Silver, Gold & Platinum. HealthCare.gov. https://www.healthcare.gov/choose-a-plan/plans-categories/. Published 2020. Accessed September 8, 2020.

9.     Lalley C. Health insurance basics: The 101 guide to health insurance. Policygenius.com. https://www.policygenius.com/health-insurance/learn/health-insurance-basics-and-guide/. Published 2020. Accessed August 18, 2020.

10.  Out-of-pocket maximum/limit. HealthCare.gov. https://www.healthcare.gov/glossary/out-of-pocket-maximum-limit/. Published 2020. Accessed August 18, 2020.

Expert Commentary

Every year, I instruct our medical students and residents on the “Anatomy & Physiology of the United States Health Care System” using a historical journey from the first Blue Cross plan in Dallas crafted for schoolteachers until the modern era of the Affordable Care Act. Along the way, we have added in a piecemeal fashion to our nation’s health care system such that seniors and low-income Americans have coverage carved out for them. Everyone else is reliant upon employer insurance for coverage or must purchase for themselves. Because of our country’s surprisingly involvement in financing health care for its citizens – over 36 percent is paid by the federal government – some commentators have declared the U.S. is an “insurance company with an army.”

While national health expenditures and financing our system are big picture items everyone in the health care sector should understand, we must also understand the small details that are most relevant to patients, such as common terminology regarding their insurance types and the payments they are required to pay at the point of service.

Cedric Dark, MD, MPH

Assistant Professor

Department of Emergency Medicine

Baylor College of Medicine

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How To Cite This Post:

[Peer-Reviewed, Web Publication] Huang, E. Karalius, V. (2022, Oct 10). Health Insurance Basics. [NUEM Blog. Expert Commentary by Dark, C]. Retrieved from http://www.nuemblog.com/blog/health-insurance-basics

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Mobile Integrated Health

Written by: Ezekiel Richardson, MD (NUEM ‘23) Edited by: Alex Herndon, MD (NUEM ‘21) Expert Commentary by: Hashim Zaidi, MD

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Introduction

Community Paramedicine, also known as Mobile Integrated Health (MIH), is a developing field in which paramedics and emergency medical technicians assist under-resourced areas in the provision of public health, primary healthcare, and preventive services. The express goal of these services is to “improve access to care and avoid duplicating existing services.” [1] While community paramedicine was pioneered in rural settings in which distance significantly limited the patients’ access to primary care and public health, it has continued to expand from rural areas that are underserved into underserved suburban and urban centers.

Across the nation, community paramedicine has taken on may roles, from providing primary prevention and onsite triage in Minneapolis, targeting emergency medicine “hot spots” for prevention of 911 calls in Ontario, to leveraging telemedicine to allow a physician to triage 911 dispatches, paramedic assessment, and diverting patients to primary care in Houston. [2,3,4]

In the United States we have seen a slow and steady migration of low-income individuals out of cities. Nearly 60% of all low-income individuals live outside the city limits of the nearest metropolitan area. [5] Suburban poverty has increased by half in most major metropolitan cities including Chicago. [6] Notably, a significant amount of literature suggests that wealthy and middle class suburbs (whose health infrastructure was built to support individuals with income and agency) are now facing a massive migration of low-income citizens. [7, 8] Accordingly, new healthcare solutions like MIH will be of paramount importance as trends in American migration continue as they have over the last 50 years.

In places like Houston, Minneapolis, and Ohio City where a single healthcare system captures a large share of the patient population and sees a significant amount of the costs from ambulance runs, those healthcare systems have funded community paramedics to assess high-volume patients and if medically appropriate, divert them triggering an ambulance run to the Emergency Department. [2, 4, 9]

In Minneapolis, this was done by staffing a community paramedic at a homeless shelter and community shelter that saw frequent ambulance calls and transports after clients left for the night and may have forgotten medications, developed asthma exacerbations, or minor injuries. [2]

In Houston, telemedicine equipment and a part time emergency medicine physician allowed remote evaluation in a patient’s home with a walk around tour a referral for certain home care services, medication refills, and primary care appointments.4 Houston’s program showed significant improvement in efficiency. Of the 5,570 patients participated, 18% received ambulance transport as opposed to 74% and EMS crews returned to service 44 minutes faster than prior. [10]

In Ohio City, frequent fliers who have called and been transported to the emergency department more than 10 times in 24 months will be given the option to have community paramedics perform a home assessment and ensure that they have the equipment and primary care to avoid emergency department visits. [7]

In Ontario, a community paramedic was stationed in a random apartment building selected for high volume and proportion of elderly individuals and a high frequency of EMS calls. There the paramedic was able to assess the health of residents, answer questions, and provide basic health education, as well as had the ability to activate emergency transport and provide basic primary care. The intervention showed evidence of an increase in the amount of Quality Adjusted Life Years, a decrease in blood pressure among study participants, as well as a significant decrease in EMS calls, thus making a difference in both patient health outcomes and proper utilization of emergency health systems. [11]

Conclusions

While community paramedicine is a promising new intervention as populations age and migrate out from urban centers, there is still sparse data on its success. Even the data that does exist raises serious questions about reproducibility from both a clinical results standpoint and an intervention oversight. However, community paramedicine’s strength may be in its flexibility and the freedom of enterprising EMS directors, public health, and city safety officials to tailor a program to a city’s needs and available budget.

Limitations

In Minneapolis, the community paramedicine program was not renewed because of difficulty quantifying cost savings and proving financial feasibility. Ohio City’s program is too early to yield results. Houston’s program and Ontario’s program have produced literature supports the notion that paramedicine can reduce EMS calls and costs spent on transportation and emergency evaluation.

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Expert Commentary

Thank you to the authors for touching on a critical subject that has only become even more important during a global pandemic. Mobile Integrated Healthcare (MIH) – also known as Community Paramedicine – shows significant promise in providing resources to those disenfranchised from healthcare.

The 1996 EMS Agenda for the Future calls for EMS to one day serve as “community-based health management that is fully integrated with the overall health care system…integrated with other health care providers and public health and public safety agencies. It will improve community health and result in more appropriate use of acute health care resources. EMS will remain the public’s emergency medical safety net.” Nearly a quarter of a century later we are getting the necessary footholds to move this vision from fantasy to reality while still recognizing the need for EMS as the public’s emergency medical safety net. The Center for Medicare & Medicaid Services (CMS) has recognized the value of leveraging existing EMS resources to further the mission of community-based health management.

The ET3 model unveiled earlier this year by CMS describes a 5-year payment model that will pay participating EMS services for 1) transport an individual to a hospital emergency department (ED) or other destination covered under the regulations, 2) transport to an alternative destination partner (such as a primary care doctor’s office or an urgent care clinic), or 3) provide treatment in place with a qualified health care partner, either on the scene or connected using telehealth. This shows the promise of incentives to reduce unnecessary transports but also to reimburse for services rendered by EMS. This applies in novel interventions such as mobile integrated healthcare but also in more common scenarios. Imagine what a model such as this could do with those who are quarantined at home or in shelters with COVID but require regular telehealth check ups for chronic disease management. Or even more simply, community members who need someone to help ensure they have food and running water.

MIH is a promising field that builds on the foundation of EMS being a community-based healthcare entity as opposed to a patient transportation service. MIH, particularly for the most vulnerable populations frequently served by EMS and the ED, stand to benefit the most with models such as this. EMS has come a long way from “you call, we haul” and initiatives such as MIH should be supported and financially fostered in communities by local and state agencies.

Hashim Zaidi, MD

McGovern Medical School

Assistant Professor

Harris Health System

Medical Director

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How To Cite This Post:

[Peer-Reviewed, Web Publication] Richardson, Ezekiel. (2021, Jan 4). Mobile Integrated Health [NUEM Blog. Expert Commentary by Zaidi, H]. Retrieved from http://www.nuemblog.com/blog/mobile-integrated-health

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References

1. https://www.cdc.gov/dhdsp/pubs/docs/SIB_Feb2019-508.pdf. (2020) Retrieved January 7, 2020

2. “Community Paramedicine: A Simple Approach To Increasing Access To Care, With Tangible Results, " Health Affairs Blog, October 31, 2017. DOI: 10.1377/hblog20171027.424417

3. Dainty, K. N., Seaton, M. B., Drennan, I. R., & Morrison, L. J. (2018). Home visit‐based community paramedicine and its potential role in improving patient‐centered primary care: a grounded theory study and framework. Health services research, 53(5), 3455-3470.

4. Langabeer, J. R., II, M. G., Alqusairi, D., Champagne-Langabeer, T., Jackson, A., Mikhail, J., & Persse, D. (2016). Telehealth-enabled emergency medical services program reduces ambulance transport to urban emergency departments. Western journal of emergency medicine, 17(6), 713.

5. Kneebone, Elizabeth, and Garr, Emily. 2010. “The Suburbanization of Poverty: Trends in Metropolitan America, 2000 to 2008.” Metropolitan Opportunity Series. Brookings Institution, Metropolitan Policy Program. http://www.brookings.edu/~/media/research/files/papers/2010/1/20-poverty-kneebone/0120_poverty_paper.pdf.

6. Kneebone, Elizabeth, and Holmes, Natalie. 2015. “The Growing Distance Between People and Jobs in Metropolitan America.” Brookings Institution, Metropolitan Policy Program. http://www.brookings.edu/~/media/research/files/reports/2015/03/24-job-proximity/srvy_jobsproximity.pdf.

7. Allard, Scott W., and Sarah Charnes Paisner. "The rise of suburban poverty." (2016).

8. Kneebone, E. (2014). The growth and spread of concentrated poverty, 2000 to 2008-2012. The Brookings.

9. Frolik, C., & Tribune News Service. (2019, December 30). Ohio City to Launch MIH-CP Program to Cut Down on Frequent Flyers. Retrieved from https://www.emsworld.com/news/1223715/ohio-city-launch-mih-cp-program-cut-down-frequent-flyers.

10. JEMS. (2020). The Impact of Telehealth-Enabled EMS on Ambulance Transports - JEMS. [online] Available at: https://www.jems.com/2017/08/01/the-impact-of-telehealth-enabled-ems-on-ambulance-transports/ [Accessed 11 Jan. 2020].

11. Agarwal, G., Angeles, R., Pirrie, M., McLeod, B., Marzanek, F., Parascandalo, J., & Thabane, L. (2019). Reducing 9-1-1 emergency medical service calls by implementing a community paramedicine program for vulnerable older adults in public housing in Canada: a multi-site cluster randomized controlled trial. Prehospital Emergency Care, 1-12.