Research On Insurance Law In Relation To Medicine

Introduction

I chose insurance law for several reasons: I work in the healthcare industry; I am a civil service employee for the State of Michigan and plan to promote within state government administration; these areas of insurance law will help to advance my knowledge in my current and future administrative roles.

As a state government employee for the Department of Health and Human Services (DHHS), we are continuously in contact with the Centers for Medicare & Medicaid Services (CMS), Joint Commission, and the Office of the Attorney General (OAG) to make sure we maintain our compliance and keep our accreditation; therefore, having advanced knowledge with Medicare, Medicaid, Long Term Care (LTC), and Life insurance will give me an advantage as I progress in my career. I have briefly used our new EMR, electronic medical records program called AVATAR, when we were transferring from the traditional paper charts; that was the first time I was even aware that our facility billed both Medicare and Medicaid.

This facility is unique, it is the only one like it in the state of Michigan, so we have a variety of positions and duties throughout the building; I have had the opportunity to learn about the legal system, our mental health system, the medical billing system, the administrative system, and I currently am in a role advocating for the rights of the those who are unable to advocate for themselves. I am naturally interested in things when I spend so much of my time with it, and I am curious to learn everything I can; I also find the concept of insurance interesting, how it comes to play such a large role in our lives, and also that it enters our lives at such young ages; and finally, as I am getting older I want to know more about everything, literally, insurance included; that is why I decided to focus on Medicare, Medicaid, and Long Term Care Insurance.

While doing my research, I originally wanted to focus on different areas, but I kept shifting to these areas and reading more. These areas are relevant to my industry, and to the work I want to continue with; there is also some selfish reason, as I mentioned, I am getting older, I want to know beforehand all the information I can, so I will be well informed for what lies ahead. The purpose of this assignment is to give me the opportunity to explore legal issues that would not normally be taught in the classroom, while also gaining knowledge that I will be able to use in my future endeavors. I believe I have accomplished this.

Medicare, Medicaid, Long Term Care, and Life Insurance

Medicare

Medicare and Medicaid as we know of it today, began long before us when President Lyndon B. Johnson signed a set of amendments to the Social Security Act. These amendments created the federally funded programs of Medicare and Medicaid on July 30, 1965. Since that time, there has been much debate over how to manage, modify, and expand and/or dissolve government health insurance programs. According to Cohn (2017), these have covered a variety of topics, including, whether to manage Medicare payments to hospitals more strictly, how to pay for prescription drugs, and whether to cover non-senior citizens.

Each debate is intense, complicated, and full of controversy; but it still comes down to the same fundamental question of who should bear the risk for high medical expenses, individuals or society? These insurance plans were voluntary arrangements, dependent on the employee’s ability to find a job and make enough income to pay the premium; and having an employer willing to provide enough coverage. People who could not satisfy these conditions faced the prospect of huge medical bills if they became ill. Among the most vulnerable groups are the elderly; who are the least likely to have jobs, and the most likely to need medical care. The stories of their suffering, and the political pressure that it created, led to Medicare. President Johnson’s words at the signing ceremony were remarkable:

No longer will older Americans be denied the healing miracle of modern medicine. No longer will illness crush and destroy the savings that they have so carefully put away over a lifetime so that they might enjoy dignity in their later years. No longer will young families see their own incomes, and their own hopes, eaten away simply because they are carrying out their deep moral obligations to their parents, and to their uncles, and their aunts. (The Political History of Medicare, p.1)

When Johnson was looking for support for this proposal, critics worried about the cost, and that society was running the risk of footing the bill of the elderly’s medical expenses. The expansion continued, prescription drug coverage was added, more treatment options were available which meant more people were able to be treated. As we know, there came to be the Children’s Health Insurance Program and the Affordable Care Act; these are efforts to extend medical coverage to larger groups of people, and by doing this it has increased the financial burden on the federal government and the taxpayers.

Currently, the cost of health care in America continues to soar. Medicare became what we know now as a Prospective Payment System (PPS) in 1983, it was formerly a retrospective system. A PPS pays for Medicare services at a fixed rate amount for a service at a predetermined rate; in contrast to billing after the patient has been seen, treated, and discharged. Medicare is a federally funded insurance program that is age based for those sixty-fine years or older. Funding is administered through the Center for Health and Human Services, or better known by the acronym “CMS.” Medicare also covers those under the age of sixty-five that have certain disabilities, and people of all ages with end-stage renal disease.

Medicaid

In Michigan, the Department of Health and Human Services (MDHHS) is the primary administrative agency for Medicaid and sharing in the jurisdiction enforcement is: The Office of the Attorney General (OAG), Department of Justice (DOJ), and the Office of the Inspector General (OIG). Medicaid is funded federally and by the states; according to the state of Michigan’s website (n.d.), this is Michigan’s 2nd largest budget item in the state; and by 2014 Medicaid programs has covered all people under age sixty-five with incomes up to 133% of the federal poverty level.

After the Affordable Care Act (ACA) was passed, if states expanded Medicaid access, then federal funding expanded, but if states used the old rules, they received no extra federal funding; Michigan expanded access. Managed care plans provide services that are federally mandated, and Michigan offers some optional services. These services mandated by the federal government are: inpatient hospital care, medical & surgical, vision/dental, outpatient, physician, home health, and family planning. Michigan offers hospice, prescription drugs, and routine vision and dental care.

Life Insurance

A great benefit for a family member in a time of need is life insurance. Life insurance can often help with funeral expenses after the death of a family member, cover bills, etc.; having this type of insurance can be a very important part of your financial planning as well. The AARP website (n.d.) tells us that after the policy is approved and purchased through an insurance company, premiums are paid in exchange for a lump-sum payment to a beneficiary when the person who is insured becomes deceased.

There are really two types of plans: permanent insurance, which is usually referred to as whole life insurance; this policy provides coverage and builds a cash value over your lifetime and pay a death benefit; term insurance provides coverage for a specific number of years and pays a death benefit. One important thing I found is to always check and see if the agent and company that you choose to work with is properly licensed through the state of Michigan. You should feel comfortable and confidant in who you choose to help you with this important decision. A few tips I found are to find out the amount of coverage you need depends on how much income you provide to your family, and how debts and expense will be paid after your death. As a consumer, you will need to make informed decisions when changing or replacing your current life insurance policy. (AARP, n.d.) Be aware that unlike home and auto insurance, life insurance can involve waiting periods, surrender fees, tax implications on cash value policies, and other complexities. It is also important that you do not cancel a policy and purchase another without doing your research.

Long-Term Care Insurance

Long term care (LTC) insurance is a policy that provides a monthly income benefit to help cover the expenses of growing old with a disability or organic cognitive disorder. Long term care insurance is designed to pay for the rising costs of long-term care. It can be added to a permanent life insurance policy, including cash value life insurance or single premium life insurance with a long term care rider. According to the U.S. Department of Health and Human Services (DHHS), among sixty-five-year-olds, 70% will use some form of long-term care in the years ahead. Basic health insurance, nor Medicare cover long term care, these will only cover short nursing home stays, limited home health care, or rehab. The benefits that are paid out after meeting the requirements are income tax free. To be eligible to receive these benefits, you must be unable to perform at least two of the six daily living ADL’s (activities of daily living). These are caring for continence, bathing, eating, dressing, toileting (getting on or off the toilet), and getting around.

If you never use the long term care rider, your life insurance beneficiaries will receive your full death benefit. However, if you use the rider, your beneficiaries will typically receive most of the unused death benefit. Generally, you can receive care in a setting of your choice such as: home care, assisted living facilities, or nursing homes. Anderson (2018) explains how long-term care insurance rates will vary based on your age, health and lifestyle and how much benefit income you want to receive, how long of a benefit period you need, and how long your elimination period will last. You can adjust your benefits to get lower long-term care insurance quotes to fit your budget. The better the benefits, the more premium is required.

Insurance Law

Insurance law is defined as a contract whereby, for specified consideration, one party undertakes to compensate the other for a loss relating to a particular subject as a result of the occurrence of designated hazards. (Bouvier, 1856) A premium is the consideration that the insurer receives for paying the loss. I chose to research insurance law because I have a genuine interest, I ended this assignment different then where I began; but I have gained a wealth of knowledge in the process. This assignment has accomplished the goal that it had set out to achieve, I know more about insurance law than I did early March when we began; and this knowledge will be valuable to me in the workplace, in advancing my career, and useful to my own personal future as I continue to age.