Health Outcomes in the United States (Nursing)

00:01 Today we're going to discuss basic health insurance concepts.

00:05 There are a few definitions that are important to understand in relationship to health insurance.

00:10 The first is an indemnity policy.

00:12 This is our basic insurance plan, where individuals pay a monthly premium to insurance companies to offset the risk of large medical bills.

00:21 So again, individuals pay insurance companies monthly premiums, with the agreement that if a large medical expense occurs, the insurance company will cover that cost because the individual has paid into the insurance plan monthly.

00:36 Most Americans are covered by this type of policy and it's subsidized through their employer.

00:41 We call this an employer sponsored health plan.

00:44 Now, this system is somewhat unique to the United States.

00:47 And the reason that about 50% of our non elderly US citizens are covered by this type of plan is result of three policy decisions that were made during the 1940s and 50s.

00:58 First, during World War 2, the government placed wage freezes on employers.

01:03 However, those wage controls did not apply to health insurance.

01:07 So employers used health insurance to lure workers from their competitors during these wage freezes.

01:13 Second, the US government passed laws that health insurance could be a part of collective bargaining agreements.

01:20 And finally, in the 1950s, the IRS exempted health insurance premiums paid by employers from federal income tax.

01:29 So, as a result of these policies, we have a unique health care system in the United States in which employer sponsored health insurance plans are the norm.

01:40 Employer based insurance is an example of a private third party payer.

01:45 Third party payments are monetary reimbursements made to providers of health care by someone other than the consumer, other than the patient.

01:54 The organizations that administer these funds are called third party payers, because they are a third party or they're external to the consumer provider relationship.

02:03 Later, we'll talk about the two most common third party payers, private insurance companies and government health plans.

02:09 But first, let's finish up with our definitions.

02:14 Cost-sharing.

02:15 Cost-sharing divides the cost of healthcare services between patients and insurance companies.

02:20 Insurance companies use cost-sharing to prevent overuse of health care services.

02:25 Some examples are those monthly premiums I just talked about, co-pays and deductibles.

02:33 Moral Hazard.

02:35 This is the idea that health insurance can change the behavior of people actually resulting in more risk taking and more wasteful actions.

02:43 So as an example, because I have health insurance, I may be more likely to risk getting seriously injured, because the cost of caring for that injury will be offset by my insurance company.

02:57 However, how we typically see this is that because I have health insurance, I'm willing to have an expensive possibly wasteful procedure, again, because I know that my health insurance company will cover some or all of the cost.

03:10 That's how we see moral hazard play out in health insurance.

03:16 Underinsured.

03:17 This occurs when cost-sharing is not enough to offset the cost for the consumer.

03:22 We hear this term a lot, but it's important to understand the definition.

03:27 Uninsured people fall into one or more of the following three categories.

03:31 The first category is individuals for which medical expenses total more than 10% of their annual income.

03:39 The second category is individuals whose annual income is 200% of the federal poverty line, and they have medical expenses that are greater than 5% of their yearly income.

03:53 The third and final category is individuals for which health insurance deductibles are 5% or more of their annual income.

04:02 Understanding these basic definitions lays the foundation for learning how our complex healthcare system works and how it impacts the health of our patients.