Private Insurance Premiums Research Articles

Brief Report: Quantifying the Impact of Autism Coverage on Private Insurance Premiums

Many states are considering legislation requiring private insurance companies to pay for autism-related services. Arguments against mandates include that they will result in higher premiums. Using Pennsylvania legislation as an example, which proposed covering services up to $36,000 per year for individuals less than 21 years of age, this paper estimates potential premium increases. The estimate relies on autism treated prevalence, the number of individuals insured by affected plans, mean annual autism expenditures, administrative costs, medical loss ratio, and total insurer revenue. Current treated prevalence and expenditures suggests that premium increases would approximate 1%, with a lower bound of 0.19% and an upper bound of 2.31%. Policy makers can use these results to assess the cost-effectiveness of similar legislation.

How A New ‘Public Plan’ Could Affect Hospitals' Finances And Private Insurance Premiums

Two key health reform bills in the House of Representatives and Senate include the option of a "public plan" as an additional source of health coverage. At least initially, the plan would primarily be structured to cover many of the uninsured and those who now have individual coverage. Because it is possible, and perhaps even likely, that this new public payer would pay less than private payers for the same services, such a plan could negatively affect hospital margins. Hospitals may attempt to recoup losses by shifting costs to private payers. We outline the financial pressures that hospitals and private payers could experience under various assumptions. High uninsured enrollment in a public plan would bolster hospital margins; however, this effect is reversed if the privately insured enter a public plan in large proportions, potentially stressing the hospital industry and increasing private insurance premiums.

Long‐Term Care: the State, the Market and the Family

In this paper we study the optimal design of a long term care policy in a setting that includes three types of care to dependent parents: public nursing, private nursing and assistance in time by children. Private nursing can be financed either by financial aid from children or by private insurance. The social planner can use a number of instruments: public nursing, subsidy to aiding children, subsidy to private insurance premiums, all financed by a flat tax on earnings.

Public policy and the market for dental services

Social inequality in access to oral health care is a feature of countries with predominantly privately funded markets for dental services. Private markets for health care have inherent inefficiencies whereby sick and poor people have restricted access compared to their healthy and more affluent compatriots. In the future, access to dental care may worsen as trends in demography, disease and development come to bear on national oral healthcare systems. However, increasing public subsidies for the poor may not increase their access unless availability issues are resolved. Further, increasing public funding runs counter to policies that feature less government involvement in the economy, tax policy on private insurance premiums, tax reductions and, in some instances, free-trade agreements. We discuss these issues and provide international examples to illustrate the consequences of the differing public policies in oral health care. Subsidization of the poor by inclusion of dental care in social health insurance models appears to offer the most potential for equitable access. We further suggest that nations need to develop national systems capable of the surveillance of disease and human resources, and of the monitoring of appropriateness and efficiency of their oral healthcare delivery systems.

Equity in health care financing: The case of Malaysia.

BackgroundEquitable financing is a key objective of health care systems. Its importance is evidenced in policy documents, policy statements, the work of health economists and policy analysts. The conventional categorisations of finance sources for health care are taxation, social health insurance, private health insurance and out-of-pocket payments. There are nonetheless increasing variations in the finance sources used to fund health care. An understanding of the equity implications would help policy makers in achieving equitable financing.ObjectiveThe primary purpose of this paper was to comprehensively assess the equity of health care financing in Malaysia, which represents a new country context for the quantitative techniques used. The paper evaluated each of the five financing sources (direct taxes, indirect taxes, contributions to Employee Provident Fund and Social Security Organization, private insurance and out-of-pocket payments) independently, and subsequently by combined the financing sources to evaluate the whole financing system.MethodsCross-sectional analyses were performed on the Household Expenditure Survey Malaysia 1998/99, using Stata statistical software package. In order to assess inequality, progressivity of each finance sources and the whole financing system was measured by Kakwani's progressivity index.ResultsResults showed that Malaysia's predominantly tax-financed system was slightly progressive with a Kakwani's progressivity index of 0.186. The net progressive effect was produced by four progressive finance sources (in the decreasing order of direct taxes, private insurance premiums, out-of-pocket payments, contributions to EPF and SOCSO) and a regressive finance source (indirect taxes).ConclusionMalaysia's two tier health system, of a heavily subsidised public sector and a user charged private sector, has produced a progressive health financing system. The case of Malaysia exemplifies that policy makers can gain an in depth understanding of the equity impact, in order to help shape health financing strategies for the nation.

Insurance Premiums and Insurance Coverage of Near-Poor Children

States increasingly are using premiums for near-poor children in their public insurance programs (Medicaid/SCHIP) to limit private insurance crowd-out and constrain program costs. Using national data from four rounds of the Community Tracking Study Household Surveys spanning the seven years from 1996 to 2003, this study estimates a multinomial logistic regression model examining how public and private insurance premiums affect insurance coverage outcomes (Medicaid/SCHIP coverage, private coverage, and no coverage). Higher public premiums are significantly associated with a lower probability of public coverage and higher probabilities of private coverage and uninsurance; higher private premiums are significantly related to a lower probability of private coverage and higher probabilities of public coverage and uninsurance. The results imply that uninsurance rates will rise if both public and private premiums increase, and suggest that states that impose or increase public insurance premiums for near-poor children will succeed in discouraging crowd-out of private insurance, but at the expense of higher rates of uninsurance. Sustained increases in private insurance premiums will continue to create enrollment pressures on state insurance programs for children.

Balancing evidence and public opinion in health technology assessments: The case of leukoreduction

Leukoreduction, filtering white blood cells from transfusion blood, effectively avoids leukocyte-related complications of blood transfusion. The technology has proven its relative cost-effectiveness for specific patient populations. With the advent of variant Creutzfeldt-Jakob disease, a transmittable spongiform encephalopathy caused by mad cow disease (bovine spongiform encephalopathy), the hard hit United Kingdom introduced universal leukoreduction for all patients as a precaution for transmission of prions in 1999. This costly policy was followed by many other countries, in the absence of much evidence of an actual health problem or of a more than presumed effectiveness of leukoreduction in preventing prion transmission. The core problem proved to be legal. The blood banks are legally accountable for blood safety. This accountability is absolute, based on avoidance of all possible risks, regardless of costs. This strategy leads to inefficiencies in health care: (i) blood safety management is guided by available rather than cost-effective technology, and (ii) private insurance premiums for civil liability are sharply increasing, while they are in no way related to the expected returns and the high and increasing blood safety. A rational safety policy is to be optimal, taking into account costs and effects of the safety procedures. This issue will need an open discussion with the general public of the real risks and a clear and unambiguous definition of proportionality in the precautionary principle, based on the European law.

The Effects of Recent Employment Changes and Premium Increases on Adults' Insurance Coverage

This study uses national survey data from 1997, 1999, and 2002 to estimate a statistical model of the relationships between employment loss, insurance costs, and insurance coverage of nonelderly adults. Simulations based on the model suggest that the large increase in private insurance premiums (about 33 percent in constant dollars) was responsible for 3.1 of the 3.4 percentage-point drop in private insurance coverage between 2000 and 2003. Employment loss has a substantial impact on the coverage of people who lose employment, but its impact on aggregate coverage is relatively small. Expanded public coverage absorbed only about one quarter of the loss of private coverage. Controlling insurance (and medical) cost inflation is critical to expanding insurance coverage, even after the employment rate recovers.

Insurance for children with special health care needs: patterns of coverage and burden on families to provide adequate insurance.

To update national estimates of insurance coverage for children with special health care needs (CSHCN) to reflect better the current economic and policy environment and to examine the burden on families and adequacy of coverage. I analyzed data on children who were aged 0 to 17 and included in the sample child files of the 2000 and 2001 National Health Interview Survey (NHIS). CSHCN were identified using a noncategorical approach. Various measures of insurance coverage type, premium contributions, unmet need for care, and out-of-pocket spending were compared for CSHCN and children without special needs across all incomes and stratified by poverty status. Compared with other children, CSHCN had higher rates of public insurance (29.8% vs 18.5%), lower rates of private insurance (62.5% vs 69.1%), and a smaller percentage without insurance (8.1% vs 11.5%). More than 13% of low-income CSHCN were uninsured. Most (78.1%) families of CSHCN contributed to private insurance premiums. Family premium contributions for employer-sponsored insurance plans averaged 2058 dollars, or 4.4% of income; premiums for private nongroup insurance were higher (3593 dollars) and consumed a larger percentage of income (6.6%). For children with insurance, rates of unmet need for specific services were relatively low, suggesting that insurance coverage was adequate. However, almost 20% of low-income CSHCN experienced some form of unmet need and of out-of-pocket spending was significantly higher for families with CSHCN compared with those without CSHCN. CSHCN are more likely to have insurance coverage, but among low-income CSHCN, lack of insurance remains a problem. In addition, the burden on families of CSHCN to provide insurance is greater, yet coverage purchased is not always adequate to meet the needs of many children and places addition burdens on families to pay directly for care.

The redistributive effect of health care finance in twelve OECD countries

The OECD countries finance their health care through a mixture of taxes, social insurance contributions, private insurance premiums and out-of-pocket payments. The various payment sources have very different implications for both vertical and horizontal equity and on redistributive effect which is a function of both. This paper presents results on the income redistribution consequences of the health care financing mixes adopted in twelve OECD countries by decomposing the overall income redistributive effect into a progressivity, horizontal inequity and reranking component. The general finding of this study is that the vertical effect is much more important than horizontal inequity and reranking in determining the overall redistributive effect but that their relative importance varies by source of payment. Public finance sources tend to have small positive redistributive effects and less differential treatment while private financing sources generally have (larger) negative redistributive effects which are to a substantial degree caused by differential treatment.

Health USA. A national health program for the United States

The Health USA Act of 1991 addresses two fundamental health services financing problems: the more than 30 million uninsured persons and the rising costs for health care and for health insurance. Health USA would provide coverage of the entire resident population for comprehensive medical and preventive health and long-term care services through a universal tax-funded financing system. The federal government would contribute an average of 87% of program costs to each state, which would establish, under federal guidelines, a state health program. Each individual or family may enroll in any health plan approved by the state program, including many private plans, or a plan run by the state program. Through the approved plan of their choice, enrollees would receive covered services and obtain their care from participating physicians and other professional practitioners, hospitals, and other facilities. The state program would pay approved plans a capitation payment for every person enrolled. The plans would pay professional providers fees, as part of an all-payer system of fee schedules and expenditure targets, or capitation payments or salary. Hospitals would be financed through global budgets negotiated by the state program with each hospital. The plan run by the state program would pay the health care costs of any person who does not enroll in an approved plan, making the state plan the payer of last resort and eliminating uncompensated care and cost shifting by providers. Health USA would separate health care coverage from employment, ensuring uninterrupted coverage and eliminating employers' administrative role in providing coverage. Federal and state taxes would replace present methods of financing by private insurance premiums and large out-of-pocket expenditures. Building on the present system of health plans, Health USA would offer all persons a wide choice of competing plans in which to enroll and offer professional providers a wide choice of plans in which to practice. It would control costs by increasing financial accountability of providers and health plans, reducing present reliance on intrusive utilization review and on patient cost sharing. By controlling health care and administrative costs, Health USA would cover the entire population and, according to independent cost estimates, reduce national health expenditures by $11.5 billion in 1991.

Unreimbursed expenses for medical care among urban elderly people

Out-of-pocket medical expenditures were examined among a sample of 400 low-to-moderate income Medicare recipients living in the Bronx for a twelve month period in 1986-87. Using three different measures of magnitude, the most significant expenses were for Medicare and private insurance premiums, medications, and dental care. The mean percent of per capita income spent out-of-pocket for medical care (including health care premiums) was 11.0%. Elderly people who spend over 12% of their own income on medical care include those in the poorest health, those with annual incomes under $15,000, people living with spouses or others, and those using a private physician as a primary source of medical care.