Arizona Healthcare Dollars by Primary Market Segment and Service Category, 2006 (PMPM)
- Per capita costs vary by market segment for a variety of reasons:
- Richness of coverage: for instance, plans provided to government employees often have more services covered or lower cost-sharing (which encourages use); plans purchased in the individual market often have fewer services included and higher cost sharing.
- Reimbursement levels: for instance, Medicaid reimbursement to health care providers is usually lower than reimbursement made by private sector insurance carriers
- Demographic mix: for instance, there is a far higher proportion of children in the Medicaid population than is typically found in an employer group plan. As children are on average much less expensive than adults, a higher proportion of children will produce a lower per capita cost.
- Medical underwriting: individual insurance coverage is medically underwritten, which means that applicants are screened and their premiums based on their health status, and some applicants may be denied coverage. The result of medical underwriting on an insurance product is that generally, healthier individuals enroll than in products where premiums are based on average costs of the insured pool and/or individuals cannot be turned down due to health condition (i.e., “guarantee issue” products).
- The relatively low per capita cost associated with the uninsured population is heavily influenced by the lack of coverage; that is, care is often not sought when needed because costs must be paid entirely out of pocket or through charity care.
- Health care expenditures shown do not include Behavioral Health Services, Long Term Care Services, or Dental Services. These figures do not include expenditures on services not covered under each segment’s respective insurance products.
- Medicaid figures do not include individuals who are also eligible for Medicare, as Medicare would be considered their “primary” source of health insurance coverage.
- Small employers are those employers who employ 50 or fewer employers. Remaining employers are classified as “large employers.”
- Allocation of health care dollars to service category may vary somewhat among primary market segments. Medicaid services in particular may allocate health care dollars to the “Other” service category that may be more typically allocated to the “Hospital Outpatient” or other service categories.
- Includes out-of-pocket (OOP) expenses. OOP expenses relate to costs the individual pays when a healthcare service was provided; for instance, annual deductibles, co-payments, and coinsurance.