From 2002 to 2007, medical spending in the United States increased by an average of 7.3 percent a year, a far faster pace than the growth in the nation’s income. President Barack Obama and congressional leaders want to “bend the cost curve” — or slow the growth in health care spending — by forcing doctors and hospitals to become more efficient.
Capitation refers to the fixed, per-patient payments made to doctors and other health care providers in return for delivering medical care to patients. Governments, insurers, and managed care organizations use capitation to control health care costs. Capitation contrasts with “fee-for-service” systems in which doctors get separate payments for each service they provide.
The Congressional Budget Office, the non-partisan budget estimator for Congress, “scores” a proposed bill by calculating the amount it will either increase or decrease federal spending and tax revenues.
The Children's Health Insurance Program provides health insurance to children in low-income families whose parents are not poor enough to qualify for Medicaid. The program is jointly financed by states and the federal government. It is administered by the states.
Under a federal law — the Consolidated Omnibus Reconciliation Act of 1985 — a company’s insurance plan must offer continuation coverage to workers after they lose their jobs. But the laid-off worker must pay the full cost of the premiums.
Comparative effectiveness research examines the relative cost and efficacy of medical procedures in one hospital or region of the country contrasted with another hospital or region, in the hopes of forcing down costs in the more expensive areas.
Under a proposal made by Senate Budget Committee Chairman Kent Conrad, D-N.D., people without health insurance would be able to purchase it from regional co-operatives, almost like farmer co-ops.
A "crowd out" is a reduction in private medical insurance coverage caused by an expansion of taxpayer-paid coverage.
Under a fee-for-service system, a doctor bills the insurance company or the government for each service he or she provides. This contrasts with a capitation system under which physicians receive a fixed sum for each patient assigned to them and the payment does not increase if more services are provided.
Health care rationing
Rationing uses a mechanism such as a waiting list or a strict national medical budget to allocate limited resources
Health information technology, or health IT, refers to storing patients’ records on computerized databases which would allow more efficient sharing of patients’ medical histories among doctors, nurses, and others. As of 2008, according to the New England Journal of Medicine, only 5 percent of doctors in the United States had adopted comprehensive health IT systems.
Health insurance exchange
A health insurance exchange system would allow uninsured individuals and small employers to purchase insurance by shopping at a federally-regulated, web-based marketplace similar to a travel web site such as Orbitz.
Purchasers woud be given a menu of competing plans, mostly private-sector ones, but also one federally-sponsored plan which would compete on cost and quality with the private-sector plans.
Proposed by some reform advocates, an individual mandate would require that uninsured individuals purchase coverage. It would apply to individuals who were neither poor enough to qualify for Medicaid nor old enough to enter Medicare. Those who failed to comply would be forced to pay a penalty to the federal government.
A proposed Independent Medicare Advisory Commission composed of doctors, economists, and health policy experts which would to set the rates at which doctors and hospital are paid under Medicaid. The panel would also propose cost-saving measures with t he goal of the federal government spending less money on inefficient medical procedesses. If IMAC's recommendations were approved by the president, they would take effect unless explicitly voted down by the Congress within 30 days.
Medicaid is the primary insurance program for low-income Americans. The states and the federal government share the cost of Medicaid. On average, the federal government pays for 57 percent of Medicaid costs, though this varies from state to state with high-income states bearing more of the burden than low-income states.
Total enrollment is more than 60 million. About 30 million low-income children and 15 million adults are covered, as well as 6 million elderly and 9.6 million blind or disabled people.
Medicare is the taxpayer-supported plan that pays for the medical care of 44 million individuals, including most Americans who are age 65 or older.
Medicare Part A pays for hospital and nursing home care.
Medicare Part B covers the costs of physicians’ services and other outpatient care.
Medicare Part C, the Medicare Advantage program, is an alternative to the traditional fee-for-service Medicare. It allows people to enroll in a private plan. The federal government then reimburses the private company for providing Medicare-covered benefits.
Medicare Part D pays for prescription drugs.
Workers’ payroll taxes pay for most of the cost of Medicare, but the people enrolled in the program also pay monthly premiums.
Because they have a higher likelihood of getting seriously ill, older people have greater difficulty than younger people do buying insurance. A Medicare buy-in would allow people aged 62 to 64 who didn’t have employer-provided insurance to enroll in Medicare before reaching the normal eligibility age of 65.
Medicare Payment Advisory Commission
An independent commission of doctors and health policy experts which makes recommendations to Congress on how make medical care more efficient is called the Medicare Payment Advisory Commission.
Direct spending by consumers for health care goods and services, including co-payments, deductibles, and any amounts not covered by insurance, are called out-of-pocket payments.
A pay-or-play requirement would require companies to offer health insurance to their employees or make a payment to the federal government to help pay for coverage of the uninsured.
A public option is a form of government-sponsored medical insurance that would be offered to the uninsured as one of the choices in the health exchange. Details have yet to be decided on how closely this public option would resemble the existing government plans — Medicare and Medicaid.
Normally, 60 votes are needed to overcome a filibuster, or an unlimited debate in the Senate. Reconciliation is a streamlined procedure that the Senate may use to enact changes by a simple majority vote, removing the possibility of a filibuster. Senate rules allow the reconciliation process to be used only on a budget bill.
Some Democrats favor using the reconciliation process to pass an overhaul of health insurance. But most health insurance policy changes would be extraneous to a budget bill. Those policy changes would be stricken from the bill unless 60 senators voted to override the Senate rules.
Taxation of products such as cigarettes, alcohol, and fatty food — items, when used by Americans, can raise the cost of health care for everyone. Health care reform advocates hope that high taxes would persuade Americans to cut their consumption of these products and thus improve their health.
A system under which medical care for all Americans would be paid for by the federal government is a single-payer plan. Sen. Bernie Sanders, I-Vt., has introduced a bill that would set up a single-payer, or universal, system. His bill would replace Medicaid, Medicare, the Children's Health Insurance Program, and the federal employees benefits plan with a universal package. Sanders would curb, or even perhaps eliminate, private-sector health insurance by prohibiting the sale of health insurance that duplicates benefits provided under the single-payer plan.
Sustainable growth rate
Each year, Medicare sets fees for physicians’ services using a “sustainable growth rate” formula. This target is updated annually to reflect inflation, the increase in the number of Medicare enrollees, and other factors. If actual Medicare spending for physicians’ services has increased faster than the target, the SGR is supposed to automatically reduce future payments for those services.
Tax break for employer-provided insurance
The money an employer pays to buy insurance for a worker is excluded from the worker’s taxable income. According to the congressional Joint Committee on Taxation, the Treasury misses out on $226 billion a year in revenues because employer spending on health insurance isn’t counted as taxable income. Some congressional leaders see taxing employer-provided insurance as a principal means of raising the money needed to cover Americans who are now uninsured.
The TRICARE program provides care for the military’s uniformed personnel and retirees, and for their dependents and survivors — in all, more than 9 million people. In 2008, the Department of Defense spent $42 billion on TRICARE, about 6 percent of total defense spending. The Congressional Budget Office forecast that TRICARE will consume 13 percent of total defense spending by 2026.
'Trigger' for public option
A mechanism that would launch a federally-run public plan to compete with private-sector insurers only if private-sector insurers failed to make their own plans less costly for consumers. The centrist House Democrats' "Blue Dog" coalition and Sen. Olympia Snowe, R-Maine, support a trigger as an alternative to an immediate public plan. Deutsche Bank analyst Scott Fidel said that a trigger might help the insurance industry weather political adversity until “the political winds in Washington eventually start to shift back more to the center.”
Medical care given to a patient who has no health insurance and can’t afford to pay the out-of-pocket costs is called uncompensated care. Hospitals pass the cost of of uncompensated care along to their paying customers. © 2009 msnbc.com Reprints