Speaker 1: In this video, we are going to be talking about health insurance. This is brought to you by Dirty Medicine. If you like my channel and wanna give back to support the channel financially, please consider clicking the Join button. You can find that Join button underneath any video on my channel, as well as it's the link in the description of any video on my channel, it's that first link. You can also find the Join button on the homepage of my channel. When you click the Join button, you'll be a Dirty Medicine member, which means you provide $4.99 a month to me to support the channel. And in exchange, you get some neat perks like the Dirty Medicine logo after your username, anytime you comment anywhere on the channel. And you'll also get member access to the locked community tab on my channel. Currently, you can vote at that locked section on the topic of the next video. And in the future, there may be additional perks as well. So if you like the channel and want to support free medical education, please consider clicking Join. Now in this video, we're gonna be talking about health insurance. And health insurance is a topic that a lot of us know about, but it seems like a lot of medical students simply don't understand it. We know that health insurance exists. We know its purpose, but we don't know the ins and outs of health insurance. And therefore, when health insurance questions show up on USMLE, COMLEX, or in-class exams, a lot of times we are left twiddling our thumbs, feeling unintelligent. And hey, you cannot be a doctor if you don't understand health insurance, right? It's an integral part of our role. It is involved in everything that we do, except for you bougie plastic surgeons that don't take any insurance. I'm not talking about you. But everybody else needs to understand health insurance. So let's get started by talking about Medicare. So who's eligible to be on Medicare? Medicare is for those who are 65 years or older, but you can also get on Medicare even if you're younger than that, if you have end-stage renal disease or amyotrophic lateral sclerosis. So end-stage renal disease or ALS qualifies you for Medicare. And you also can qualify for Medicare if you receive a disability pension from the Railroad Retirement Board. And that last bullet point there is just something that a lot of medical students don't know or doesn't get taught correctly. So these are the things that qualify you for Medicare, 65 or older or 64 and younger if you have end-stage renal, ALS or receive disability pension from the Railroad Retirement Board. All right, so that's your eligibility to be on Medicare. But what's really high yield for exams is to understand the different parts of Medicare. And these are depicted with letters. So like part A, part B, et cetera. So let's go through them one at a time and talk about what each part pays for. Because after all, Medicare is a type of health insurance and therefore it's paying for various healthcare services. So the first part of Medicare is part A. Part A is insurance for hospital stays, skilled nursing facilities, hospice and some if not most home healthcare services. In other words, the way to remember this is that Medicare part A is the inpatient level of care. So just remember the A in inpatient for Medicare part A. Inpatient, inpatient. So inpatient hospitalization, inpatient skilled nursing, inpatient hospice and technically home healthcare. Some people could argue that that's inpatient as well. Part A pays for inpatient levels of care. Medicare part B, this is your typical insurance. Like what you think of when you think of health insurance, that's what Medicare part B pays for. So we're talking about things like outpatient visits with a primary care physician or a specialist, ordering medical supplies, all types of preventative care, blood work and ambulance, transportation. This is all paid for by Medicare part B. So Medicare part B pays for the basic stuff. That's how you remember this. The next part is Medicare part C and you might see this referred to as Medicare Advantage. Medicare part C is basically the private insurance alternative to Medicare. So although it's part of the Medicare program, it's a little carve out within Medicare that functions most closely to how private insurance works. And just to clarify what I mean, when I say private insurance, I'm talking about privately run companies that sell health insurance, usually directly to places of employment, who then make their employees part of their health insurance plan. That's a private health insurance. But a public program like Medicare and what we'll talk about in a little bit, Medicaid, those are federal and state run programs that are sponsored by tax dollars. So for Medicare part C, although it is part of the federal public program of Medicare, it is most similar to how private insurance works. Now there's not a whole lot you need to know about Medicare part C for the purposes of USMLE, COMLEX, or in-class exams, but just know that it's known as Medicare Advantage, that it's similar to how private insurance functions, and that essentially, if you think about what it is composed of, it's Medicare part A plus Medicare part B, and then usually plus part D, which we'll talk about in just a second. So the way to remember Medicare part C is that Medicare part C is private company care. And just remember the letter C in company and care to help you remember that Medicare part C functions most similarly to private insurance, so private company care. Now lastly, let's talk about Medicare part D. Medicare part D covers prescription drug medications, and these drugs are usually on an allowable formulary, which means unfortunately for some patients, if they're used to taking one medication or one drug in the past, and then that medication is no longer allowable under Medicare's formulary, usually if those patients want to be able to get those medications covered by their Medicare insurance, they do unfortunately need to switch. But what you need to know for USMLE or Comlex, or perhaps even in class exams, is that Medicare part D is drug coverage, which is really easy to remember because it's part D, D for drugs. So for your studying pleasure, here are the four parts of Medicare. We've got part A, part B, part C, part D. Remember the components of each of them. Part A for inpatient, inpatient, so that's gonna be inpatient hospitalization, skilled nursing facilities, hospice care, and home healthcare. Part B for your basic stuff, so outpatient visits to the PCP or the specialist, labs, and preventative care. Part C is private company care, so this is most similar to private insurance. It combines the elements of the other parts. And then part D for prescription drug coverage, D for drugs. Now I understand that this is a little bit overwhelming for you if you've never really understood how Medicare works before, and by no means am I an insurance expert. However, it is very important that you understand how insurance works, particularly Medicare. Now let's move on and talk about Medicaid. So Medicaid and Medicare are very similar-sounding names, but they differ in some pretty big ways. Medicaid, your eligibility really depends on financial need. Now there are some exceptions to this, but generally speaking, Medicaid is based on financial need. So those with low income will qualify for Medicaid, as well as those who are disabled. Children can qualify, pregnant women can qualify, patients who are on SSI, which stands for Supplemental Security Income. And then there are additional criteria which differ depending on the state. So Medicare expansion really happens through the state and not at the federal level, so other eligibility is determined on a state-by-state basis. Now something that's very high yield that I wanna include here is what's known as CHIP, Children's Health Insurance Program. Basically what CHIP does is that, let's say that you have a family that makes too much money to qualify for Medicaid, but even despite that, they don't make enough money to really get the child health insurance. If the child in the family does not have health insurance, that's where CHIP steps in and ensures that those children are covered. So for that reason, CHIP is very closely related to Medicaid and usually included within the discussion of what Medicaid is and who is eligible. So if you wanna just keep this concept pretty broad, I would think of Medicaid as being based on financial need and Medicare as being generally for those 65 and older. Obviously there are some exceptions on both sides for Medicare and for Medicaid, but those are your big differences. All right, moving on, let's talk about COBRA. No, dirty, I hate snakes. No, not the COBRA. All right, so COBRA stands for Consolidated Omnibus Reconciliation Act. And this act allows individuals to continue group health insurance policies after they lose their benefits. So for example, let's say that you are working at a job and as part of your employment benefits, you get health insurance. If you are let go from the job or you decide to leave or there's any circumstance whatsoever that causes job loss and therefore by extension, you lose your health coverage, you can activate COBRA. So COBRA lets you continue the group health insurance policy that you had at that previous job and you can continue it up for a certain predetermined amount of time. It's usually pretty expensive. It can be up to 102% of the premium and you can continue that coverage so that in that sort of interim phase while you're looking for either a new job or new health insurance, you're covered. So that's what COBRA is. And again, it covers voluntary and involuntary job loss. So if you have health insurance, you can basically always retain it if you're willing to pay for it and pay the high premium of COBRA. So let's do a brief example just to illustrate this. Let's say that you work at Dirty Medicine University. Who knows, someday I could have my own medical school. You never know. But you quit because you think that my videos are stupid. But you were getting health insurance from Dirty Medicine University and then you quit. And because you quit, you no longer are eligible for the group policy that you were getting at DM University. What you could do is activate your COBRA plan. So COBRA, this act, basically guarantees you if you're willing to pay for it that you will still get the health insurance that was provided to you at Dirty Medicine University. All right, so we come back to COBRA. Is there anything else important that you need to know? Well, just for completeness sake, I will include that there's always an election period of at least 60 days. So you have 60 days to basically decide whether or not you want to elect to pay for COBRA and activate your COBRA plan. And then once activated, that plan will last you either for 18 or 36 month period of time. So you will be covered until you are able to secure new health insurance. Now the way to remember this is that I think of the snake, and a COBRA snake can extend its body and get disgustingly long and be very scary as it moves in one direction and its tail kind of lags behind. So the COBRA snake extends its body just like how COBRA health insurance works and you can extend the group health insurance policy. So that's how I remember COBRA. Now that we've talked about Medicare, Medicaid, CHIP and COBRA, let's just talk about some general insurance principles. These are things that may show up that are high yield depending on the class or the exam that you're taking. So let's start by talking about the different types of insurance payments. So our first term is a copayment or a copay for short. A copayment is a fixed fee that must be paid to receive covered care. So for example, if you have health insurance, you can look at your health insurance card and it'll tell you what your copay amount is. So it's a fixed fee. So for example, every time you go and you see a specialist, so a cardiologist, an endocrinologist, a gastroenterologist, you pay some amount of money at the counter. And for example, 40 bucks. Every time you see a specialist, you pay 40 bucks. Every time you see a primary care physician, you pay 20. So that's a copay. It's a fixed fee that has to be paid in order to receive covered care. Now that's not to be confused with coinsurance. Now these names obviously sound similar. We've got copayment and coinsurance. And the difference here is that coinsurance is a fixed percentage that must be paid by the insured. So the copayment was a fixed amount. We said 40 bucks, but coinsurance is a fixed percentage. So for example, if you have health insurance and your coinsurance is 25% and a doctor bills your insurance company for $100 for a visit, you're responsible for $25 because 25% or 1 4th of the $100 bill is $25. So copayment is a fixed fee and coinsurance is a fixed percentage. Our last term of this general insurance principle is a deductible. So the deductible is a fixed amount that must be paid out of pocket before insurance starts to kick in and pay for your care. So for example, if you have a deductible of $4,000 but you haven't met it yet, meaning you haven't yet paid $4,000 out of your own pocket and your doctor bills you for $265. So literally you go to the doctor's office, you have something done and then you get a bill in the mail or online and it's $265. You're responsible for paying all of that $265 because you haven't yet met your out-of-pocket deductible. That's $4,000. So you're basically paying $265 this time and then maybe you go back to the doctor for your next appointment and you have to pay $265 again and then maybe you see a different doctor and you pay $100 over there. Basically, every time you pay those bills, they're all adding up and you have to pay at least a total combined from all of those bills of your deductible, which in this case is $4,000 before your insurance will kick in and start to cover your services. So in this example, you've initially paid $265 out of $4,000 toward your deductible and deductibles exist on an individual level, so like you personally, but if you have a health insurance plan and you've got family members on your plan as well, there's also a family deductible. So the bottom line here is that the deductible is the amount that must be paid out-of-pocket before insurance pays for your care. Sounds pretty evil when we talk about it like this, but that's how deductibles work. So these are your different types of insurance principles. We're talking about co-pays, co-insurances, and deductibles. Now let's talk about the different types of insurance plans. So when we talk about insurance plans, really the four you wanna know are what you see in this table. I'm gonna put it in a table for your studying pleasure. We've got health maintenance organizations, better known as HMOs, preferred provider organizations, better known as PPOs, exclusive provider organizations, better known as EPOs, and then point-of-services, which are POS, all right? And as we go through these, we'll talk about what the scope of the providers are that are eligible to be within these plans, and then I'll point out some high-yield notes in that last column on the right. So for HMOs, HMOs are restricted to a limited panel of physicians. So if your health insurance plan is an HMO, they're basically telling you if you wanna see an endocrinologist, you can only go to one of these 10 people, let's say, or if you want a primary care doctor, you can only go to one of these 20 people. I'm simplifying here for the purposes of this discussion, but the bottom line here is that within an HMO, you are restricted to a limited panel or a limited number of in-network physicians. Now, if you look at the notes column, you'll see that it says strict in-network coverage. So HMOs are very strict. You have to see physicians in the limited panel in order for it to be covered, and you also need referrals from the primary care physician if you wanna see a specialist. So that's how HMOs work. Now, let's compare that to PPOs, the preferred provider organization. PPOs do allow you to see out-of-network providers, but if you do so, it's not going to be covered to the same extent within the insurance plan as in-network providers. So your PPOs will designate in-network providers versus out-of-network providers. Now, PPOs in general compared to HMOs tend to be more expensive, but they're a little bit more flexible in the sense that A, no referrals are necessary, and B, you can go out-of-network. So you're not restricted to that limited panel of physicians and sometimes even when you go out-of-network, the insurance will still reimburse you a little bit even if you're seeing an out-of-network provider. So PPOs are more flexible, but they're more expensive. Now, exclusive provider organizations or EPOs, I want you to think of this as basically being the same thing as an HMO, but the network just tends to be a lot smaller. And that's really all you need to take away from this. Lastly, point of service. There are out-of-network providers that are allowed, but the designated in-network providers are there to heavily reduce costs. The major difference between a point of service and a PPO is that in a POS, you still need referrals from a primary care physician. So really the way to think about a POS is sort of like a hybrid of an HMO and a PPO. Now, I understand that I'm using a lot of acronyms here. I'm speaking not slowly, so fairly quickly. And this is probably a lot of information you've never heard before, or at least have not learned in medical school. So it's a lot, I get it, but it's information that you wanna know because once you get this down in your brain, it's free points on test day. And it's also stuff that you probably wanna be familiar with, especially if you see yourself in the future working in a hospital setting. So these are different types of insurance plans. Let's talk now about healthcare payment models. And this stuff does show up. This is high yield, so you wanna know this. The first thing we're gonna talk about is capitation. So under capitation, physicians receive a set amount of money per patient per period of time, regardless of how much the patient utilizes healthcare services. So this is really important to understand. For every patient, there's a set dollar amount that the physician receives per period of time, and it doesn't matter if the patient goes to the doctor or doesn't go to the doctor. Capitation is usually used by HMOs, and it's calculated based on local costs and average servage usage. So there's a lot of behind the scenes calculations going on to figure out how much money does the health insurance plan pay in capitation to the physicians or the networks. And that's all based on a lot of different metrics. So the bottom line here is that this differs regionally. The other thing about capitation is that these capitation plans will maintain what's known as a risk pool, which is basically like a small percentage of the capitation plan that gets held by the insurance company and only gets paid to the physician if the health plan does well financially. So it's sort of like a way to hedge against the amount of money that gets paid. So for capitation, the question is, how do you remember this? What's the mnemonic? So I think of capitation, I think of cap, like a hat on somebody's head, wearing a cap. And I think about a bunch of people wearing caps, and then each of those caps is a set dollar amount that gets paid in capitation. So capitation, I think of the caps, and then each cap on somebody's head is a set dollar amount. So for every patient that's in a network that uses a capitation model, it's a per head payment or per cap dollar amount. That's how I remember that. Now let's talk about bundled payments. In bundled payments, healthcare organizations get a set amount per service, which is then divided by all the providers or facilities involved based on the positive health outcome. So like if somebody's going into the hospital for a hip replacement, and let's say that they come in through the emergency room, they get an X-ray, and then they're admitted to the floor, to the orthopedic service, and then they're given medications, and then they're given some type of orthotic device. Instead of billing each of these different things separately and getting reimbursed for each of these different things separately, the entire amount of services that were rendered gets paid in one bundled payment, hence the name. And then when the healthcare facility receives the money, they then divide that by all the various people that were involved in the care. Again, I'm simplifying here so that I can explain this. This isn't exactly how this works, but this is how you can think about it. Healthcare organizations that use bundled payments are incentivized to improve patient outcomes because if there's any unexpected healthcare utilization or complications, the healthcare facility will basically be paying the cost of that. So the bundled payment will only include a set amount per service that's sort of predetermined. So for example, going back to our discussion about the hip replacement, if something goes wrong during the operation and the hip replacement goes poorly, maybe the joint becomes necrotic. Again, I'm just making all of this up. But any unexpected complication has to be paid for by the healthcare facility because the bundled payment didn't take into account that there might be X, Y, and Z complications. So that's bundled payments. Now let's talk about fee-for-service models. So in a fee-for-service model, the patient pays for each service individually. The name makes perfect sense here. There's a fee, and that fee gets paid for each service. And the thing about fee-for-service models is that this rewards physicians for high volume. So the more services that are rendered, the more fees that they charge, the more fees that the patient has to pay. So the patient pays for stuff regardless of clinical outcome in a fee-for-service model. Now fee-for-service models should not be confused with a discounted fee-for-service. In a discounted fee-for-service, it's basically the same thing as a fee-for-service, but the patient only pays a percentage at a predetermined rate. So this is really what's being utilized in PPO plans. So there's a predetermined rate at which a patient will pay a percentage of their care. So technically, it's fee-for-service, but it's discounted. So that's more of what's happening when you think of a traditional private insurance. So these are different healthcare payment models, and that concludes this video on general principles of insurance.