A legal privilege protecting a group of people, businesses, or organizations from antitrust liability. The exemption allows covered entities to engage in practices that may otherwise violate antitrust laws. When such exemptions are granted, they often involve industries where cooperation (either among private businesses or between the private and public sector) is favored over the competition fostered by antitrust laws. However, the exemptions are often limited to particular methods, or limited to facilitate particular aims among the parties. Examples of antitrust exemptions have included monopoly rights for patent holders, the activities of labor unions, and the activities of insurers (other than health insurers) regulated by state laws.
Association Health Plan
A form of collective private health insurance where a group or association—with membership at times limited to certain trades—endorses, negotiates, or self-insures health coverage for its members. Such group-purchasing arrangements may provide better coverage and rates due to market clout and greater negotiating power, thus attracting small businesses and individuals. At times, insurance companies will create association health plans as part of their marketing strategies.
Budget reconciliation is a legislative process that limits debate on proposed legislation, and allows fewer votes to pass a law. Budget reconciliation occurs when Congress votes on changes in mandatory spending or revenue programs. In the Senate, budget reconciliation legislation cannot be filibustered, and can pass with only a simple majority (fifty-one votes), instead of the sixty-vote supermajority usually required to pass legislation.
Children’s Health Insurance Program (“CHIP”)
A program awarding federal funding to states that provide health care coverage to children; states provide this health care coverage by expanding Medicaid coverage, creating an independent insurance program for children, or some combination of the two. The Affordable Care Act extends the operation of this program until 2015, and increases the amount of federal funding awarded to states through the program.
A legal argument based on federalism principles designed to limit application of Congress’s spending power where conditions on federal money to the states are so burdensome that states would not accept the conditions, except that circumstances necessitate acceptance to fund essential functions or programs. The spending power normally allows Congress to place conditions on federal spending to incentivize states into taking particular actions favored by Congress; however, states argue that application of such power to essential funding would expand federal power indefinitely because states cannot refuse the federal money.
Coercion theory is based on the Supreme Court’s opinion in South Dakota v. Dole, 483 U.S. 203 (1987). In South Dakota, the court indicated that Congress’s spending power does not extend to conditions on funds that represent a large amount of a state’s federal funding. The court reasoned that, due to their size, these funds would be so coercive as to compel acceptance of their conditions.
The practice of offering health insurance policies within a given area—regardless of heterogeneity between individuals in health-related spending—at a common price (or “premium”). There are different types of community rating, ranging from “absolute” (where no individual factors influence the price) to “modified” (where some demographic attributes of individuals are considered). Such programs are already available in other insurance markets, such as that for flood protection. The normative question about whether to use community ratings, versus a more factor-specific system, is quite complex, involving social concerns, behavioral phenomena, and economic concerns.
Compulsion v. Inducement
Compulsion produces action in another person through force or coercion. From a psychological perspective, it can be identified when someone does something despite a desire to do something else. Inducement produces action in another person by manipulating that person’s motives for acting: rather than forcing or coercing, it impacts an individual’s goals or desires. Using a form of inducement to influence a person’s actions is a more subtle alternative to using coercion.
The Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) established a requirement that insurance programs give employees the opportunity to retain health care coverage after ending their employment. COBRA implemented this requirement by conditioning income tax deductions to employers on contributions to group health care plans that provide the opportunity for continuing employee coverage after employment. COBRA specifies certain qualifying events that allow a former employee to retain coverage. These qualifying events include the death of the covered employee, involuntary termination, divorce or separation of a spouse from the covered employee, and a dependent child reaching a non-covered age. Upon one of these qualifying events, COBRA provides for eighteen months of continued coverage, unless another factor (such as disability) extends that period of time.
Congressional Budget Office
The Congressional Budget Office (“CBO”) is an agency that was created by the Congressional Budget and Impoundment Control Act of 1974. The purpose of the CBO is to prepare non-biased, objective reports and analyses to assist the United States House of Representatives and Senate. The CBO primarily provides research regarding the federal budget and different government programs to aid the legislative branch in Congressional budget proceedings. Pursuant to its purpose to provide objective information, the CBO does not advocate policy. Members of the CBO often testify before Congress to provide supplemental information about the federal budget. The CBO is comprised of approximately 250 members, and is located in Washington D.C.
A co-payment, also known as a co-pay, is the cost that the insured pays to receive medical services. A co-pay is a flat rate determined by the health insurance company, and it is usually printed on the insurance card. Co-pays apply to services like office visits and medication. Co-pays exist to deter the insured from excessively seeking medical services; however, very high co-pays can also deter the insured from obtaining necessary medical attention.
The minimum amount of money an insured person is responsible for paying on an individual claim.
Department of Health and Human Services (“HHS”)
The United States federal executive agency responsible for administrating health policy, promoting research affecting human health, and providing human services, including aid to children, families, and the elderly. HHS administers federal health programs such as Medicaid and Medicare, along with its state and local partners. HHS includes specialized agencies designed to accomplish its mission, including the Centers for Disease Control and Prevention, the Food and Drug Administration, and the National Institutes of Health.
The term “donut hole” typically refers to the prescription drug coverage portion of a health care plan. Health care plans may impose a limit on how much the insurance company will pay for prescription drugs over the course of a year. Once that limit is reached, the beneficiary must pay all prescription drug costs for the remainder of the year. The period of time in which the beneficiary pays for prescription drugs out of pocket may be referred to as a “donut hole”. The insurance company typically resumes payment of prescription drug costs when the new year begins.
A requirement that an employer provide health insurance to employees. Under the Affordable Care Act, employers with fifty or more employees must offer basic health coverage their employees; if employers don’t comply, they are subject to a fine.
Essential Health Benefits
The Affordable Care Act establishes a set of ten required categories of benefits and products. Health care plans covering individuals and small groups are required to offer benefits that fall into each of these required categories. The categories include emergency services, hospitalization, prescription drugs, behavioral health services, and pediatric services. All state-sponsored Medicaid health care plans and private health plans that wish to be certified and included in health care plan exchanges must, at minimum, offer benefits that satisfy all ten categories. For plans beginning on or after September 23, 2010, the essential health benefits requirement cannot be evaded by the insurance provider through limitations on the dollar amount spent for a given category of care over the course of a beneficiary’s lifetime.
An informal term referring to obstructive tactics that attempt to block or delay legislative action on a bill or other measure. A common tactic involves use of numerous procedural motions or lengthy debate to delay a vote on a measure. In the United States Senate, a filibuster may be ended with a vote of cloture, which allows the Senate to end a debate with a two-thirds majority vote.
The word “fisc” is sometimes used as an abbreviation for the “public fisc,” i.e. a governmental deposit of funds, or “treasury.”
The term refers to a government’s concern for the health, peace, morality, and safety of its citizens. The phrase may be used in a national constitution, signaling an intention on the part of a national government to take legal action to promote the general social and economic well-being of its citizens. The United States Constitution contains such a provision in the Taxing and Spending Clause of Article I, Section 8, which has been judicially interpreted to be a qualification on the government’s taxing power. The Supreme Court – notably in the 1937 Helvering v. Davis case – has adopted an expansive view of the Taxing and Spending powers for the general welfare. No legislation since then has been struck down because it did not serve the general welfare. However, a debate still rages over just how expansive the Clause actually is, and what types of legislation are covered.
Grandfathered Health Plans
Under the Affordable Care Act, current health plans that existed at the time the Act was signed were “grandfathered” into the Act. This was meant to allow people to maintain the insurance coverage they already possessed. Under the Act, grandfathered health plans are exempted from certain requirements that the Act imposed. For example, grandfathered health plans are not required to impose limits on out-of-pocket costs for their users. New plans are required to provide their participants with “essential health benefits,” as determined by the Secretary of Health and Human Services; grandfathered health plans are not subject to these requirements. However, certain requirements do apply alike to the new plans and the grandfathered health plans. These include extending the age of dependent children to age 26. Also, both types of plan are prohibited from placing a monetary limit on lifetime coverage.
Group insurance covers a group of people with a common interest, such as employees of a single employer. Typically, all individuals in the group pay the same insurance premium costs, regardless of age or preexisting conditions. Individuals in the group are eligible to renew insurance as long as they remain part of the group and pay the required fees; the insurance company cannot refuse to renew insurance based on individual risk changes.
Health Insurance Exchange
An entity, run either by a state agency or as a non-profit organization, which provides information on participating health insurance plans, and gives consumers an opportunity to purchase health insurance through the exchange. The Affordable Care Act provides for the exchanges to begin operation in 2014, and aims to give consumers a one-stop shop or clearinghouse where they may purchase coverage from competing insurance providers. Further, because insurance purchased through the exchange is not linked to a particular employer, consumers may continue with the same health plan when they switch jobs. Exchanges also provide administrative assistance to private health insurers in enrolling new customers, and in complying with changing health regulations.
Healthcare Maintenance Organization (“HMO”)
A health insurance plan offering health care services from a specified group (or “network”) of medical service providers. The HMO requires an insured person to choose a physician within the network (an “in-network” provider) to be the primary provider of health care. As a large organization, an HMO lowers the cost of health care services by pre-determining the set of services offered to insured persons. An insured person then pays a fee for coverage, and a small fee per visit to the primary care physician. Excepting emergencies, a typical HMO plan does not cover services by providers who are not members of the specified network (i.e. “out-of-network” providers). If an insured person needs special care, then the primary care physician must approve visits to out-of-network specialists and hospitals for coverage under the plan.
Generally, an individual “mandate” by the federal government involves a compulsory requirement that individuals purchase or obtain an item, such as automobile insurance for car owners. The Affordable Care Act institutes an individual mandate for health care, which is scheduled to come into effect in 2014. The mandate will require individual citizens to purchase a minimum level of health care. The constitutionality of the individual mandate under the Commerce Clause is one of the most contentious portions of the Affordable Care Act, and is presently under review by the Supreme Court.
A government-sponsored program that provides health insurance to low-income individuals. Created by the federal government, the program runs on a state-by-state basis; the federal Centers for Medicare and Medicaid Services (“CMS”) monitors each state-run program. The CMS sets minimum requirements for eligibility standards, funding, services provided, and the quality of care.
A government-sponsored program that provides health insurance coverage to people aged 65 or older, all people who are permanently disabled or have a congenital physical disability, and people who meet other special criteria. The program is financed by a portion of payroll taxes, as well as by monthly premiums deducted from Social Security checks. The program is administered by the Centers for Medicare & Medicaid Services, which receives eligible members from Social Security applications. It consists of four “parts”: The first part is hospital insurance, which contributes financially to inpatient care and similar activities. The second part is medical insurance, which helps pay for doctor services and other supplies not covered by hospital insurance. The third part is Medicare Advantage, which is a series of plans provided by local provider organizations that people with Medicare can choose from. The fourth and final part is prescription drug coverage, which helps pay for prescribed treatment. Although it is a popular program, Medicare has increasingly come under fire for its growing costs and enrollment. It has developed into a major political battleground, involving with multiple political conflict areas, including deficit reduction and health care reform. Note that Medicare is distinct from Medicaid, which is a state-run, poverty-based program.
Minimum Essential Coverage
The minimum essential coverage is the minimum amount of health care insurance that a participant is required to have under the Affordable Care Act. Unless an individual participates in a grandfathered health plan, the individual must carry an insurance policy that satisfies the individual responsibility requirement. Plans that satisfy the minimum essential coverage include employment-based coverage, Medicare, Medicaid, and other government sponsored programs. Adults who fail to satisfy the minimum essential coverage face a penalty of $750.
Penalty (fee vs. tax)
Any citizen who does not have health insurance coverage for more than three months is subject to a fine, with a few exceptions, including those for low-income or incarcerated individuals. There is debate as to whether this penalty is a fee or a tax. The government requires fees for services that benefit only a particular group, while a tax exists to fund services for the entire population. The Obama Administration maintains that the penalty is a fee, not a tax. According to the Obama Administration, insurance companies cannot be required to insure everyone unless payments from healthy individuals can help maintain the long-term viability of the insurance programs; for this reason, all citizens must be required to join insurance programs.
Preferred Provider Organization (“PPO”)
A health insurance plan providing a network of medical service providers for the insured. A visit to an in-network medical service provider may cost the insured person a discounted fee or a fixed co-payment. In contrast to an HMO, a visit to an out-of-network specialist or hospital does not require approval by a physician for coverage under the plan; however, seeing an out-of-network medical service provider costs more than using an in-network provider. PPO plans vary in breadth of coverage.
A pre-existing condition is a medical condition that existed in an individual prior to the time that individual enrolled in a health care plan. Depending on the plan, a pre-existing condition can be defined as a condition for which the individual has already received medical treatment, or as a condition for which the individual has already experienced symptoms that would have driven a prudent person to seek treatment. Insurance companies exclude coverage for pre-existing conditions to prevent the following pattern of self-selection into insurance that may be unsustainable for insurers: healthy individuals (who calculate that they probably don’t need coverage) avoid paying for it, which means that the only people buying coverage are people for whom the insurance company will likely have to pay significant sums. Since a scheme of insurance can only be profitable (or sustainable) if funds brought in exceed those paid out, this is a problematic pattern for insurers. By requiring all U.S. residents to purchase insurance, the individual mandate is intended to prevent this type of self-selection pattern from occurring.
Primary Care Physician
The primary care physician is the first physician people visit for an undiagnosed illness. The Affordable Care Act allows participants to choose their primary care doctor from their health plan’s network. The Act allows individuals to choose their primary care provider and their children’s primary care provider from a list of participating providers from their health insurance. Moreover, the Act does not require a physician referral for obstetrical or gynecological services as long as the specialist is a participating care provider. These benefits apply to health plans effective after March 23, 2010. However, these benefits do not apply to grandfathered health plans.
The amount paid for coverage under an insurance contract, either upfront before coverage begins or in fixed installments through the term of coverage. Premiums are paid whether or not any subsequent claims are made under the insurance contract. The premium represents the price paid to have the ability to make claims for covered events. If a covered event occurs, a person seeking to make a claim under an insurance contract will often have to pay a deductible, and/or make a copayment (in addition to their premium), to receive a payout from the insurer. The amount of the premium often depends on factors such as the risk of a covered event occurring, the expected amount of insurance payout, and the deductible to be paid by the insured.
A medical concept that refers to measures taken to prevent disease and injury from occurring, as opposed to treatment-based methods that are applied after a disease or injury has occurred. Preventive care includes medical education, immunizations, yearly physicals, financial and leave-time support for parents, and more frequent screening. Because preventive care focuses on individual characteristics, and can involve potentially unnecessary interventions, it requires special application and widespread use to be cost effective. However, studies show that preventive services are grossly underused. The Affordable Care Act aims to give more people access to preventive care—such as counseling, screenings, vaccines, and blood pressure checks—without having to pay a copayment, deductible, or co-insurance. To receive these benefits, however, one must be enrolled in a job-related health plan or individual health insurance plan. Politicians and academics debate whether widespread preventive care plans are actually cost-effective.
The public health insurance proposal would allow citizens to opt into a government-offered health plan. The government could offer lower premiums and in turn lower all insurance premiums, but insurance companies argue that the public option would undermine the employer-offered health insurance option.
To cancel, take back, or undo an order or rule.
Severability enables individual sections of legislation to be considered separate from an Act or Statute as a whole. When a provision of legislation is “severable” in this way, the Act or Statute as a whole can survive a determination that the provision in question is unconstitutional (or invalid for some other reason). Severability is often specified in the text of legislation through a designated “severability clause”. As currently written, the Affordable Care Act does not contain a severability clause.
Money paid to a business or individual to cover part of or all of the costs associated with taking an action favored by the payer. By offsetting costs, subsidies enable persons to undertake activities that they might not otherwise be financially able to take, or at the very least subsidies make activities more affordable. Eligibility for subsidies is often contingent on certain activities consistent with policies favored by the payer, and subsidies often may be used only for offsetting the costs of the favored activities.
To accept liability; to agree to pay an insurance claim.
Universal Health Care
Broadly speaking, the phrase refers to health care systems based on the idea that a certain level of health care coverage should be available to all members of society. In reality, there are many different variations on universal health care, although all are premised on some sort of government involvement. For example, systems may differ on what care must be provided, who manages the system, who actually provides the care, etc. Most systems are funded by the population through insurance, taxation, or a combination of the two. Though the United States does not have a universal health care system, the Affordable Care Act will potentially provide nearly-universal health care coverage to all legal residents. The theoretical issue of universal health care, as embodied by the Affordable Care Act, remains a hot topic of debate in the United States. Some of the prominent issues include cost-effectiveness (i.e., economic efficiency) of the Act, the constitutionality of certain provisions, the viability of the compulsory insurance scheme, the effect on medical services actually provided, the adequacy of a profit-driven health care insurance and provider sector, and the acceptability of resulting health care to the public. Universal health care as a concept should be distinguished from “socialized medicine.” The latter refers primarily to a situation in which the governing body provides health care and employs health care professionals and providers.
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