An Alliance for Health Reform Toolkit -
Produced with support from the Robert Wood Johnson Foundation

This toolkit was compiled and written by Laura Covington.

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Place your cursor over underlined terms to see definitions. You can also click on underlined terms to see definitions in the glossary at the end.

Key Facts

  • Total health spending in the U.S. reached $2.1 trillion in 2006-$7,026 per capita. 1
  • By 2016, total health spending is projected to rise to $4.2 trillion. 2
  • Between 2005 and 2006, total health spending increased 6.7 percent, more than double the rate of overall economic growth (2.9 percent). 3
  • Total health spending remained relatively constant at approximately 16 percent of the gross domestic product from 2003-2006,4 but is projected to increase to 19.5 percent by 2017. 5
  • Spending for home health care increased at a faster pace between 2005 and 2006 (9.9 percent) than any other category of health spending, though its impact is limited because it accounts overall for a small share of total health spending (2.5 percent). 6
  • In 2006, yearly prescription drug spending growth accelerated to 8.5 percent from a recent low of 5.8 percent in 2005, in part because of full implementation of the Medicare Part D drug benefit. 7
  • Between 2006 and 2007, premiums for health coverage offered by employers increased 6.1 percent. This was the fourth straight year of declines in the rate of premium growth, from a peak of 13.9 percent in 2003. Even so, this was more than twice the rate of growth in the Consumer Price Index. 8
  • Of every dollar spent on health services in the U.S. in 2006, 46 cents came directly from government sources. 9
  • Costs for program administration and the net cost of private health insurance were about 7 percent of total health spending in the U.S. in 2006, and grew 8.8 percent, a marked increase over the 3.6 percent rise in 2005. 10


The U.S. spent more than $2 trillion dollars on health care,11 or $7,026 per capita, in 2006.12 This is about twice as much per capita as countries such as Australia, Canada, the United Kingdom, Germany and Japan.13

In 1960, U.S. health spending accounted for just 5.2 percent of the gross domestic product; today it accounts for 16 percent of GDP.14 The annual rate of increase in health care spending has remained fairly steady since 2003 - between 6.9 and 6.5 percent. 15 However, some experts have cautioned against becoming overly optimistic about this trend. They cite the influence of the economic cycle on health spending, the increasing incidence of obesity and the rapid expansion of provider capacities as three factors which could make spending relief short-lived.16 In addition, spending for health care is still growing at more than double the rate of the overall economy.17

Rising health care costs raise health insurance premiums, which are also growing at a much quicker pace than overall inflation or workers' earnings.18 This in turn puts pressure on employers-who provide most coverage for those under the age 65-to shift costs to employees, reduce the comprehensiveness of their coverage or even drop coverage entirely.19,20 Rising premiums also make it more difficult for those without access to employer sponsored coverage to purchase insurance policies on their own, which contributes to the rise in the number of uninsured.21

Cost increases also put pressure on state and federal governments whose publicly funded health care programs compete for dollars with other important spending priorities.

Rising health costs can strain family-as well as government-budgets. The average family premium for 2007 is $12,106 a year, up from $11,480 the previous year.22,23 The average individual premium is up to $4,479, from $4,242 the previous year.24,25

As insurers start to shift a greater share of health costs to employees, many individuals will be burdened with higher out-of-pocket spending (the amount of health care costs employers and insurers don't pay but individuals pay themselves).

Not all of the increases in health spending are necessarily bad. Some health economists note that as countries become wealthier, they choose to spend more on health care.26 Some analysts, such as David Cutler of Harvard, argue that most of the additional expenditure is a worthy investment which pays dividends in terms of decreased mortality and improved quality of life.27

Also, while health expenditures may be burdensome to some, they provide income to others. Hospitals and health care facilities are the economic engines of many communities. Some of the wages and supplier revenue they generate gets returned to state and federal coffers in the form of corporate and individual taxes. 28

However, health spending has been rising two and half percent a year faster than the gross domestic product over the past four decades.29 The Centers for Medicare and Medicaid Services projects health spending will rise to nearly 20 percent of the GDP by 2050.30

Advancements in medicine and technology have lengthened the lives of Americans, but they do not come without a cost. New procedures are often expensive and increase health care spending.31 The Congressional Budget Office reported that the bulk of increases in health care spending could be attributed to the development and dissemination of new technologies and medical services. While technological innovation can reduce spending in many fields, the CBO noted, in terms of health care, such advancements also lead to changes in practice, which together tend to increase spending.32 Consumer demand and increased utilization add to costs.

Other contributors to rising health care expenses are increased labor costs, resistance of consumers to managed care restrictions, the aging of the population, unhealthy lifestyles, a growing prevalence of high-cost diseases, lack of information technology, administrative costs and defensive medicine.33,34 Estimates of the impact of each of these factors differ.

Selected Articles

Please email info@allhealth.org if you find that any of the links mentioned in this toolkit no longer work.

Health Spending Basics

  • "Health Care Costs: A Primer"
    Kaiser Family Foundation, August 2007

    This resource, created by the Kaiser Family Foundation, outlines the most recent information concerning the cost of health care: who is paying, what they are paying for and the effects of increasing costs. The primer displays information in easy-to-understand graphs and charts, with links to statistics sources. (20 pages)

  • "Snapshot: Health Care Costs 101"
    California HealthCare Foundation, 2008

    This resource from the California HealthCare Foundation provides general background on U.S. health spending. It shows how much we spend on health care and details the proportion of funds spent on different services. (27 pages)

  • "Health Insurance Cost"
    National Coalition on Health Care, 2008

    This resource from the National Coalition on Health Care provides bulleted facts on health care costs: the trends in health care spending; employer and employee health insurance costs; and the impact of rising health care costs.

Spending Trends

  • "National Health Spending In 2006: A Year of Change for Prescription Drugs"
    Aaron Catlin and others, Health Affairs, January/February 2008

    This paper presents a comprehensive view of national health spending through 2006. In that year, spending on health care grew 6.7 percent to $2.1 trillion (16 percent of GDP), or $7,026 per person. Also, the implementation of Medicare Part D caused a major shift in the distribution of payers for prescription drugs. For a summary of the distribution of costs, see: www.allhealth.org/briefingmaterials/NHE-1038.pdf (16 pages)

  • "Don't Break Out the Champagne: Continued Slowing of Health Care Spending Growth Unlikely to Last."
    Paul Ginsburg, Health Affairs, January/February 2008

    In response to the above article, Paul Ginsburg of the Center for Studying Health System Change cautions against overly optimistic conclusions regarding the slowing in heath care spending growth. He cites, among others, the influence of the economic cycle on health spending, the incidence of obesity, and the rapid expansion of provider capacities as factors that indicate health care spending relief for patients will be short-lived.

  • "Testimony on Growth in Health Care Costs"
    Congressional Budget Office, January 2008

    CBO Director Peter Orzag's testimony discusses both the causes of health care cost increases-the development and proliferation of new health technologies being the most important factor-and the implications of such a trend on federal spending in the long term budget.

  • "Trends in Health Care Costs and Spending"
    Kaiser Family Foundation, September 2007

    This September 2007 fact sheet on health care costs presents key statistics about the growth, level and impact of rising U.S. health care costs. It covers spending on various medical services, sources of health spending, employer-sponsored health coverage and the impact on businesses and people. (2 pages)

  • "Employer Health Benefits 2007 Annual Survey"
    Kaiser Family Foundation/Health Research and Educational Trust, September 2007

    This annual survey of employers provides a detailed look at trends in employer-sponsored health coverage, including changes in premiums, employee contributions, cost-sharing provisions, and other relevant information. (8 pages)

  • "Health Insurance Premiums Rose Only 6.1% in 2007 - But This May Be the Last Year the Trend Rate Will Fall"
    Bob Laszewski, Health Care Policy and Marketplace Review (blog), September 13, 2007

    Health policy analyst Bob Laszewski predicts that the relatively low rate of increase in health care premiums for 2007 marks the bottom of the insurance "cycle," and that rates will rise at a faster pace in 2008. "Even a 6.1% trend rate is unsustainable," Laszewski says, "because it is so much greater than the general inflation rate, the increase in wages and the overall growth in the economy - all in the 3% range."

  • "Comparing Projected Growth in Health Care Expenditures and the Economy"
    Kaiser Family Foundation, May 2006

    Rising health care costs relative to national income raise concerns about the sustainability of American health care. This snapshot by the Kaiser Family Foundation suggests that no standard policy options will reduce the gap between the growth of health spending and income.

Causes of Heath Cost Increases

  • "Technological Change and the Growth of Health Care Spending."
    Colin Baker and others, Congressional Budget Office, January 2008

    This CBO paper examines the role of medical technology in the growth of health care spending; projects its growth through 2082; discusses selected advances in medical technology and how they affected health care spending; and analyzes the implications of continued technological change for future spending.

  • "How Changes in Medical Technology Affect Health Care Costs"
    Kaiser Family Foundation, March 2007

    Medical technology is a significant driver for health care costs. This "snapshot" by the Kaiser Family Foundation explains what medical technology is, the various ways that it can potentially affect spending, and the factors that affect medical technology advancements. It also discusses the policy questions presented by the effect medical technology has on health care costs and offers options for slowing growth.

  • "The Factors Fueling Rising Healthcare Costs 2006"
    PricewaterhouseCoopers/ America's Health Insurance Plans, January 2006

    This PricewaterhouseCoopers publication, commissioned by America's Health Insurance Plans, investigates the reasons for health premium growth in 2005. The top drivers, according to the report: general inflation (about a quarter of the total increase) and (contributing about an eighth each) increased consumer demand, health plans with fewer restrictions/provider consolidation, new technologies and higher priced treatments. (22 pages)

  • "Health Spending In The United States And The Rest Of The Industrialized World"
    Gerard F. Anderson and others, Health Affairs, July/August 2005
    Free abstract at: http://content.healthaffairs.org/cgi/content/abstract/24/4/903

    Why does per capita health spending in the United States outstrip those in any other country? This Health Affairs article investigates the role of malpractice claims and waiting lists on costs, and finds that neither explains higher spending in the U.S. The authors instead attribute high costs to higher incomes in the U.S. and higher prices for medical care.

  • "Pressure from Rising Health-Care Costs: How Can Consumers Get Relief?"
    Dana P. Goldman, RAND Corporation, October 2005

    Health economist Dana P. Goldman states that increasing spending is not going to lead to the economic ruin of the US, but is instead a sign that Americans are getting richer and are more willing to spend money on their health. She argues that spending should not be cut, but instead redirected for increased efficiency, both by allowing consumers to pay less out-of-pocket for services with high clinical value, and by expediting approval of more cost-efficient drugs and devices.

  • "U.S. Health Care Spending In an International Context"
    Uwe E. Reinhardt and others, Health Affairs, May/June 2004

    This Health Affairs article discusses the economics behind health care spending in the US in relation to other countries. Reinhardt and colleagues cite factors disproportionately affecting U.S. spending, including ability to pay, an unwillingness to ration health care and a complex system that places economic power in the hands of health care administrators and providers. The article also examines the economic burden placed on the American economy by health spending.

  • "Health Spending: It Ain't What You Spend, It's the Way That You Spend It"
    Chris Fleming, Health Affairs Blog, October 19, 2006

    Fleming comments on a David Leonardt New York Times column, "A Lesson from Europe on Health Care," and on a study by Dartmouth College researchers that found low-cost interventions often are more efficient than expensive medical technology.

  • "The State of the Nation's Health"
    Maggie Mahar, Dartmouth Medicine, Spring 2007

    For 30 years, Dr. Jack Wennberg has published studies showing that a patient's geographic location has a lot to do with the type of care he or she receives. As noted in the item above, research by Dr. Wennberg and colleagues also shows that patients getting more expensive, aggressive treatment often have worse outcomes than similar patients getting more conservative care. This article sums up the research and serves as a good introduction to the Dartmouth Atlas, which compares care and costs in different regions. To do your own comparisons, see the Dartmouth Atlas data tools at www.dartmouthatlas.org/data_tools.shtm

Effects of Spending Growth

  • "Squeezed: Why Rising Exposure to Health Care Costs Threatens the Health and Financial Well-Being of American Families"
    Sara R. Collins and others, The Commonwealth Fund, September 14, 2006

    This article, produced for The Commonwealth Fund, examines the effects of rising out-of-pocket costs and deductibles, along with reduced employer-based coverage and health plan quality on non-elderly adults. It highlights the unaffordability of insurance for many people trying to buy individual coverage.

  • "Universal, Effective and Affordable Health Insurance: An Economic Imperative"
    Jason Furman and Robert E. Rubin, The Brookings Institution, 2007

    As part of the Hamilton Project, Jason Furman and Robert E. Rubin discuss the interrelation of "the problems of uninsurance and expensive or ineffective care." They note the overarching consequences of rising health care costs and a growing number of uninsured on the economy as a whole.

  • "Should We Be Worried About High Real Medical Spending Growth In The United States?"
    Mark V. Pauly, Health Affairs Web Exclusive, January 8, 2003

    In this article, Mark Pauly challenges the idea that health spending is growing too quickly. In the private sector, rising costs for health insurance should be offset by smaller raises, he argues. He also suggests ways to reduce long-term cost trends.

Some Ways to Curb Spending

  • "Evidence on the Costs and Benefits of Health Information Technology"
    Stuart Hagen and others, Congressional Budget Office, May 2008

    This paper presents and examines evidence on the costs and benefits of health information technology. Of particular note, it critiques the much-cited RAND study which projected health savings of $77 billion from the adoption of health IT. The paper also presents potential barriers to the broader distribution and use of health IT and possible options for the federal government to promote use of health IT.

  • "In the Balance."
    David Brown, Washington Post, April 8, 2008

    This article challenges a commonly held assumed truth: that disease prevention measures save money in the long run. Touted by presidential candidates among others as a key element of their cost containment strategies, disease prevention seems to sometimes cost more to implement than it saves in the long run.

  • "Medicare Finds How Hard It Is to Save Money."
    Reed Abelson, The New York Times, April 7, 2008

    This article discusses an experiment Medicare paid eight outside companies about $360 million to conduct which found that certain disease management strategies seemed to have a lesser-than-anticipated cost containment effect.

  • "Options for Slowing the Growth in Health Care Costs."
    James Mongan and others, New England Journal of Medicine, April 3, 2008.

    This paper examines 12 different approaches to curbing health care spending, discussing each and categorizing them on their potential for cost savings (highest, intermediate, and lowest).

  • "Bending the Curve: Options for Achieving Savings and Improving Value in U.S. Health Spending"
    Cathy Schoen and others, The Commonwealth Fund, December 2007

    This report discuses 15 different federal policy approaches to curbing health care spending and increasing value. Generally, these policies include producing and using better information for health care decision-making; aligning financial incentives with both health quality and efficiency; promoting and enhancing disease-prevention efforts; and correcting price signals in health care markets.

  • "Reinsuring Health: A Proposal to Make Health Insurance More Affordable: Research Highlight"
    Lauren Necochea, The Robert Wood Johnson Foundation, January 2007

    This research highlight summarizes Katherine Swartz's book, Reinsuring Health: Why More Middle-Class People Are Uninsured and What Government Can Do, which investigates the lower costs of large group coverage verses individual and small group insurance. Swartz proposes government-sponsored reinsurance for people employed by contract or small business. (2 pages)

  • "Health Care Spending and Use of Information Technology in OECD Countries"
    Gerard Anderson and others, The Commonwealth Fund, May 10, 2006

    In this analysis supported by the Commonwealth Fund, the authors present U.S. spending on health information technology in an international context, suggesting that healthcare spending disparities could become greater if OECD countries adopt health IT faster than the U.S.

  • "Health Care Rationing: What it Means"
    Henry J. Aaron, The Brookings Institution, December 2005

    Henry J. Aaron of the Brookings Institution suggests the need for health care rationing in the United States, using Britain as a model. The policy brief cites examples of specific radiology procedures, and outlines models for rationing. Aaron discusses a need for the U.S. to evaluate the amount of money that is spent on life saving technology, the amount of money spent on research to evaluate spending, and who is footing the bill. (8 pages)

  • "Fix Health Care by Making Americans Care about Costs"
    Michael Cannon, The Cato Institute, September 6, 2007

    There is an uninsured problem in the U.S., says Michael Cannon, but he argues that the way to fix it is not by expanding coverage. This article criticizes public and employer-controlled coverage and argues for containing costs by putting individuals in charge of their own health care spending. "Nothing would help more than 200 million cost-conscious consumers," says Cannnon.

  • Health Care Reconsidered: Options for Change
    These policy briefs, produced by The Hamilton Project of The Brookings Institution, offer four approaches for reforming health care and achieving universal coverage.
    1. 1. "Achieving Universal Coverage Through Medicare Part E(veryone)"
      Gerard F. Anderson and Hugh R. Waters, July 2007

      This proposal would allow people with employer-sponsored coverage to keep their existing coverage, but allow others to buy into an affordable insurance option modeled after Medicare. (8 pages)

    2. 2. "Evolving Beyond Traditional Employer-Sponsored Health Insurance"
      Stuart M. Butler, May 2007

      Because of changes in the workplace that complicate employer-sponsored health insurance, Butler proposes changes that would reform the tax treatment of health insurance, provide state-sponsored "insurance-exchanges," and transform the role of employers from sponsor to facilitator. (8 pages)

    3. 3. "A Comprehensive Cure: Universal Health Care Vouchers"
      Ezekiel J. Emanuel and Victor R. Fuchs, July 2007

      Emanuel and Fuchs propose a system that would provide all Americans with a voucher to purchase private insurance, funded by a value-added tax that would replace current premiums. (8 pages)

    4. 4. "Taking Massachusetts National: Incremental Universalism for the United States"
      Jonathan Gruber, July 2007

      Gruber argues for extending the Massachusetts reform model nationally. Individuals would be required to have health insurance, which would be free to those below 150 percent of poverty and subsidized for those between 150 percent and 400 percent of poverty. Businesses not offering coverage would have to pay an assessment. (8 PowerPoint slides)

  • "Questions and Answers About Health Insurance: What is consumer-directed coverage?"
    America's Health Insurance Plans, September 13, 2007

    This section of a larger document explains how health savings accounts (HSAs), high deductible health plans and health reimbursement arrangements work. See pp. 11 - 14. See also AHIP's April 2007 study on the number of people covered by HSAs and high deductible health plans -- www.ahipresearch.org/PDFs/FINAL%20AHIP_HSAReport.pdf

  • "Economic Scene; Free Lunch On Health? Think Again"
    David Leonhardt, New York Times, August 8, 2007

    Many presidential candidates have proposed encouraging preventive care as a tool to cut costs. Leonhardt critiques this idea based on a lack of evidence proving that preventive care would save money.

Story Ideas

  • Contact the large employers in your community and find out how many are offering employees high-deductible health plans (HDHPs) and health savings accounts (HSAs). How many employees are signing up and how is this influencing employer and employees costs? If some large employers have not chosen to offer the HDHP/HSA option yet, why not?
  • Explore the impact that health plans with high cost-sharing may be having on providers' economic situations. Speak to hospitals, physician associations and community health centers to determine if a growing number of patients are having difficulties paying their share of the bill. Is there any evidence that patients with high deductibles are refusing tests or treatments that they would have to pay for out of pocket? Are community health centers seeing more patients with private insurance who want to avoid potentially larger out-of-pocket costs at higher priced providers?
  • Speak to providers and their representatives about the impacts that consumer-directed health care may be having on patient behavior. Are patients seeking more information about the costs and quality of care before they agree to undergo tests or receive treatments? What types of questions do patients seem most interested in getting answered? Has this changed in recent years?
  • Interview officials at major hospitals, representatives of physicians and health plan managers in your community to find out what new technologies (equipment, procedures or drugs) are coming online. Ask if insurers decided to cover this service and what factors they took into account in making this decision. Try to determine if this new technology has replaced some previous medical service or if it is being provided in addition to existing technologies (e.g., a new diagnostic test).
  • Interview officials at local health plans to determine how they perceive high costs may be influencing the type of care patients receive. Are patients more likely to use in-plan providers? Is there any evidence that elective surgery is becoming less prevalent? Are there fewer non-urgent emergency room visits? Has the frequency of visits for chronic conditions, such as diabetes, gone down? Or is expanding service use still a major reason for the growth in health care costs?
  • Talk to a sample of small and large employers to determine how high health care costs are affecting the benefits they offer or the way they run their businesses. Are there plans to drop health insurance as a fringe benefit for their regular employees? Is there an effort to use more contract or part-time employees who would not be eligible to enroll in the company-sponsored health plan?
  • Are state and local officials and managers of publicly subsidized health care facilities finding it increasingly difficult to meet the community's health care needs with available tax revenues? Is there a concern that public health problems could develop or spread more quickly than they otherwise would because the cost of maintaining an adequate health care safety net is too high?

Selected Experts

Drawn from the Alliance for Health Reform's Find-an-Expert Service for reporters. Descriptions in quotes are written by the experts themselves. Credentialed reporters can see full profiles for these and other experts, including after-hours contact numbers, by going to www.allhealth.org/reporter_enroll.asp

    Senior Fellow, Brookings Institution
    Washington DC 20036

    Areas of knowledge include entitlements in general, including Social Security and Medicare; general budget and tax policy

    Wilson H. Taylor Scholar in Health Care and Retirement Policy, American Enterprise Institute
    Washington DC 20036

    Areas of expertise include Medicare (including Part D), Medicaid, and other federal health programs; private health insurance (including consumer-driven health care); price/spending trends; health policy and the budget. Former senior official at CBO, CMS, and OMB.

    Professor of Health Economics, Harvard School of Public Health
    Boston MA 02115

    My research focuses on public health insurance programs and disparities in health care and outcomes. From 2005-2007 I served as a Member of the President's Council of Economic Advisers.

    Senior Advisor, AcademyHealth
    Washington DC 20016
    202-292-6727 or 202-686-2727

    I am a physician and former senior official in the Health Care Financing Administration. Areas of expertise include physician payment policy, managed care,and malpractice reform.

    VP and Chief Actuary, Humana Inc.
    Flagstaff AZ 86004

    As Chief Actuary of Humana, I have hands on experience with Consumer-Directed Health Plans, Medicare+Choice and health care reform issues. Health policy requires informed actuarial estimates.

    Professor, Department of Health Policy, George Washington University
    Washington DC 20006

    Former staff director of Ways and Means Health Subcommittee. Worked for more than thirty years on major health financing and delivery issues. Specific issues include Medicare, HMOs and managed care, health care cost increases and cost containment programs, and health professions including physician specialty and geographic distribution of physicians.

    Director, Institute for Health Policy, Massachusetts General Hospital
    Boston MA 02114

    Expertise in issues of cost, quality, health care politics, health care management, and conflict of interest Research involves quality of care, academic-industry relationships, and physician behavior.

    President, National Health Policy Group
    801 Pennsylvania Ave, NW Suite 245
    Washington, DC 20004

    "Mr. Bringewatt is a nationally recognized leader on health systems transformation for people with complex chronic conditions. Currently, Mr. Bringewatt is Co-founder and President of the National Health Policy Group (NHPG) and Co-founder and Chair of the National Alliance for Specialty Healthcare Programs (SHP Alliance), a national leadership group of healthcare plans and programs specializing in care of persons with serious and disabling chronic conditions. Prior to establishing the National Health Policy Group, Mr. Bringewatt was co-founder and President and CEO of the National Chronic Care Consortium (NCCC). Mr. Bringewatt evolved the NCCC from a national demonstration to a national leadership association involving many of the premier health plans and integrated health and long-term care delivery systems in the United States. The NCCC was widely known for its real-world, high-quality solutions for improving health policy and practice using systems integration and planned change technologies."

    Vice President, Economic and Domestic Policy Studies, The Heritage Foundation
    Washington DC 20002

    Senior health expert in America's foremost conservative research organization. Expert on the uninsured -- especially tax credit solutions -- and Medicare. Frequently testifies and speaks on health issues.

    Director of Health Policy Studies, Cato Institute
    Washington DC 20001

    Expanding patient and provider freedom. Using market mechanisms to improve quality, reduce cost, generate information for patients, and drive IT innovation. Encouraging regulatory competition among governments, incl. devolving power over health care to states.

    Vice President, Avalere Health
    Washington DC 20036

    Expertise in current policies to redefine the clinical research enterprise, including investments in comparative effectiveness research, evolution of public and private payers' use of evidence for formulating coverage and reimbursement decisions, and trends in quality improvement initiatives, specializing in the Medicare program.

    Vice President, Director, Health Care Marketplace Project, Henry J. Kaiser Family Foundation
    Washington DC 20005

    Gary Claxton is a Vice President and the Director of the Health Care Marketplace Project at the Henry J. Kaiser Family Foundation. The Project provides information, research, and analysis about trends in the health care market and about policy proposals that relate to health insurance reform and our changing health care system. Prior to joining the Foundation, Mr. Claxton worked as a senior researcher at the Institute for Health Care Research and Policy at Georgetown University, where his research focused on health insurance and health care financing. From March 1997 until January 2001, Mr. Claxton as the Deputy Assistant Secretary for Health Policy at the U.S. Department of Health and Human Services, where he advised the Secretary on health policy issues including: improving access to health insurance, Medicare reform, administration of Medicaid, financing of prescription drugs, expanding patient rights, and health care privacy.

    Vice President, Research and Evaluation, Robert Wood Johnson Foundation
    Princeton, NJ

    Dr. Colby "leads a team dedicated to improving the nation's ability to understand key health and health care issues so that informed decisions can be made concerning the way Americans maintain health and obtain health care."

    Professor, Georgia State University
    Atlanta GA 30302

    Dr. Custer's research has investigated a wide range of topics including the sources of health insurance coverage, employment-based health insurance, health plan cost management initiatives, and health insurance regulation.

    Professor of Economics, Harvard University
    Cambridge MA 02138

    I am a professor of economics at Harvard, specializing in health economics. My interests are in the explanation for health improvements, the value of medical spending, the design of health insurance systems, and related issues.

    President, The Commonwealth Fund
    New York NY 10021

    My primary interests are the uninsured, Medicare, Medicaid, health policy, quality and organization of health services, international health, minority health, and women's health. My training is in economics with experience in government health policy, academia, and currently private foundation sponsoring independent research on health and social issues.

    Sr. VP Director of Health Care Finance, The Lewin Group
    Falls Church VA 22042

    Former Director of research for Medicare. Interests: health care finance, Payment systems, Insurance, advance tax credit for health care coverage, costing, Medicare and Medicaid, Long term Care and hospitals.

    Professor and Dean of Public Policy, Georgetown University
    Washington, D.C. DC 20007

    Long-time health policymaker and researcher; experience in health reform and other congressional initiatives. Research on health and long-term care financing.

    Professor of Medicine and of Community and Family Medicine, Dartmouth Medical School

    "Dr. Fisher is also a general internist at the Department of Veterans Affairs Medical Center in White River Junction, Vermont where he co-directs the VA Outcomes Group, a research and training program for physicians. His research interests lie in three areas. First, he has worked to clarify the limitations of administrative databases and develop methods to overcome them. Second, he has developed approaches to resource allocation based upon the principles of benchmarking, first as a means of addressing inequities in the levels of hospital resources across communities in Oregon and more recently as applied to the U.S. physician supply. Most recently, he has focused on the health implications of the uneven distribution of health care resources. His current research, funded by the Robert Wood Johnson Foundation, examines the potential adverse consequences of increasing capacity in health care." (Description from Dartmouth Medical School)

    Professor of Economics, Economics Department, University of California-Santa Barbara
    Santa Barbara CA 93106

    I'm an expert in the broad field of health economics (e.g. health insurance and managed care, competition and monopoly, hospital markets, regulation and antitrust, productivity of pharmacueticals).

    Director, Center on an Aging Society, Georgetown University
    Washington DC 20057

    I am interested in the relationships between financing and the delivery of health and long-term care. I follow changes in health coverage, health care costs, health care budgets, Medicaid, Medicare, and employment based health insurance. I am also quite interested in structural issues in health care; such as coordinating care for chronic and disabling conditions, caregiving, and health literacy.

    Director, Health Research Program, Employee Benefit Research Institute
    Washington DC 20037

    I specialize in economic security issues related to employment-based health benefits, health insurance coverage, and the uninsured.

    Director, Center for Health Policy, Stanford University
    Stanford CA 94305

    Outgoing chair Medicare Coverage Advisory Committee; study cost-effectiveness, technology assessment, health expenditures, health care productivity, Medicare reform. Info at our website: http://healthpolicy.stanford.edu.

    Director & Chief Medical Officer, LA County Dept of Health Services
    Los Angeles CA 90012

    My experience is as Chief of Staff in a large hospital, undersecretary/ceo for VA healthcare system and director of LA county department of health services/public health. My interests are in healthcare financing, improving the quality of healthcare, improving patient safety and the use of information technology in healthcare including the implementation of a computerized patient record.

    Senior Policy Director, The Commonwealth Fund
    Washington DC 20006

    My primary interests fall within the broad area of health care financing and organization, following closely the hot policy issues. For example, in late 2004, consumer-driven health care, the uninsured, Medicare drug benefit implementation, administrative simplification, and incentives to improve quality for the chronically ill are topics on which I'm working.

    E.J. Barone Professor of Economics and Health Policy, Carnegie Mellon University
    Pittsburgh PA 15213

    My primary areas of expertise are health care and health insurance markets, including antitrust and competition. I also have expertise on general health economics issues, e.g., health care costs, the uninsured, Medicare, etc.

    President, Center for Studying Health System Change
    Washington DC 20024

    As a health economist, my primary interests include health care costs, the uninsured, managed care and insurance trends, physician issues, market changes and Medicare issues.

    Vice President, Center for Medicine in the Public Interest
    Springfield NJ 07081

    Impact of government regulation of biotech and pharmaceuticals, formularies, price controls on medical progress and health; health insurance, bioethics; mental health issues

    President, National Center for Policy Analysis
    Dallas TX 75251

    John C. Goodman, Ph.D., is an expert in health care and government entitlements (Social Security & Medicare), economics and public policy. He has written seven books including the best-selling "Patient Power", and "Economics and Public Policy" an often used college textbook. He has written thousands of scholary articles and op-eds.

    Professor of Health Economics, George Washington University
    Washington DC 20006

    My most important areas of interest in health care are employer-based health insurance, quality of care, antitrust, and information in the health care sector.

    Resident Scholar, Health Policy Studies, American Enterprise Institute
    Washington DC 20036

    I am an economist who has worked in the health policy area in Washington for about 30 years, including 8 years at HHS/ASPE during the Reagan years. I have written on the tax treatment of health insurance, private health insurance, tax credits for expanding coverage, Medicare and Medicaid reform, and the economics of the pharmaceutical industry.

    Exec V-P, Alliance for Health Reform
    Washington DC 20005

    Has run the nonpartisan Alliance for Health Reform since its founding in 1991, where he has arranged hundreds of policy briefings for Congressional staff and media in Washington and around the country.

    President & CEO, AHIP
    Washington DC 20036

    As President and Chief Executive Officer of the American Association of Health Plans, Karen Ignagni is the nation's leading authority on the public policy, legislative, and public affairs issues challenging the managed care industry today.

    President, Jennings Policy Strategies, Inc.
    Washington DC 20001

    Former senior health care advisor to President Clinton for eight years and ten year veteran of Senate Aging/Finance Committee. Expertise in insurance coverage, cost containment, Medicare, Medicaid, CHIP, long term care and overall politics of health care.

    President, Federation of American Hospitals
    Washington DC 20004

    13 years as a Congressional staffer in the Senate and House working on most major Medicare and health legislation. Outside government experience as head of two major health trade associations Health Insurance Association of America and the Federation of American Hospitals.

    Program Director, National Conference of State Legislatures; Forum for State Health Policy Leadership
    Washington DC 20001

    I work with state legislatures on health information technology issues, as well as on issues around health system financing and affordability, access and quality, especially private insurance, the uninsured, and the overlap (or gap) between public and private coverage. Other areas of research include legislative activity related to disparities, and cost containment; and quality/safety/errors.

    Director, Health Economics Program, Minnesota Department of Health
    St. Paul MN 55101

    Expert in the economics of health care costs and access to care. Expertise in state health policy and the implications of both state and federal actions on states.

    SVP, Center for Policy and Research, America's Health Insurance Plans
    Washington DC 20004

    Formerly executive director of Centrists.Org and former senior economist at Progressive Policy Institute, think tank affiliated with Democratic Leadership Council (DLC). Former CBO health economist, and staff economist for National Bipartisan Commission on Future of Medicare. Major areas of research: Medicare reform, health insurance, health coverage and reform proposals.

    Vice-President, Kaiser Family Foundation
    Menlo Park CA 94025

    Expertise in changes in the health care marketplace (health insurance, prescription drugs, health care costs, managed care), with an emphasis on the implications for public policy. Background in the federal and state governments as well as the private sector.

    Associate Director for Health Policy, The Council of State Governments
    Lexington KY 40578

    I work for a 70-year old national, nonpartisan organization of state officials in all three branches of government, including governors, state legislators, and executive branch appointees. It is my job to monitor health policy developments, trends and innovations and know what they mean for states.

    Resident Fellow, American Enterprise Institute
    Washington DC 20036

    Areas of research include consumer-driven health care, health insurance regulation, information transparency, value purchasing, tax treatment of health care, Medicare reform, genetic information, Medicaid, health care cost factors, uninsured,

    Vice President, Media Relations, American Hospital Association
    Washington DC 20004

    The American Hospital Association is the umbrella group for the nation's hospitals. The AHA has experts working on issues, including access and coverage for the uninsured, Medicare and Medicaid, medical liability reform, quality and patient safety, regulatory reform and relief, health care costs, bioterrorism and disaster readiness, among others.

    Vice President and Health Program Director, American Institutes for Research
    Silver Spring MD 20901

    I am an economist who specializes in health care financing, with a particular emphasis on Medicare and aging issues. I am particularly interested in policy issues as they affect health care consumers.

    John D. MacArthur Professor of Health Policy and Management, Harvard University
    Boston MA 02115

    Economics of health care, especially Medicare and cost-sharing. Formerly vice chair of the Medicare Payment Advisory Commission; director of Aetna and National Committee for Quality Assurance.

    Director of Health Policy Program, New America Foundation
    Washington DC 20009

    I study, write, and speak about private health insurance markets (decisions by employers, workers, health plans, and regulators), coverage expansion policy options, sources of and reactions to health care cost growth, and Medicare reform. I was the Senior Advisor for Health Policy at OMB during the Clinton health reform process of 1993-94, taught at Wellesley College, and did research at both AHRQ and the Urban Institute before joining the Center.

    Professor, Wharton School of Business
    Philadelphia PA 19104

    I am a health economist with special interests in health insurance and physician behavior.

    President, Health Results Group LLC
    Washington DC 20006

    Healthcare strategist. Expert in Medicare, Medicaid, and pharmaceutical industry. Consultant, speaker, and blogger. Topics include Medicare Part D drug benefit, Medicaid reform, consumer-driven health care, prescription drug benefits, pharma / biotechnology industry, health financing, and managed care. Experience includes consultant to Fortune 100 companies, states, and foundations; senior advisor to CMS administrator; state Medicaid director; state health commissioner; and Medicare expert at White House budget office. On web at kippiper.com. Blog at piperreport.com.

    Executive Director, Families USA
    Washington, D.C. DC 20005

    Families USA is the national organization for health care consumers. As executive director of Families USA, health care expertise includes health coverage for the uninsured, prescription drugs costs and affordability, Medicare and Medicaid, patients' rights legislation, and health care ombudsman issues.

    Professor of Economics and Public Affairs, Princeton University
    Princeton NJ 08540
    609-258-4781 (-1456 sec)

    My interests are health economics and health policy, with emphasis on the uninsured, hospital economics and the economics of the pharmaceutical industry.

    President, The Urban Institute
    Washington DC 20037

    I am the Vice Chair of MedPAC and was the director of CBO so I have expertise in Medicare, budget issues, health insurance and the economy, and prescription drugs.

    Chair, Department of Health Policy, George Washington University
    Washington DC 20006
    Executive Vice President, Kaiser Family Foundation
    Washington DC 20005

    My primary interests are Medicare and Medicaid policy, health coverage and the uninsured, coverage and access to care for the low-income population, and health care reform. As executive director of the Kaiser Commission on Medicaid and the Uninsured, much of my work examines coverage for the low-income and uninsured populations.

    CEO, Employee Benefit Research Institute (EBRI)
    Washington DC 20037

    I have worked on ERISA, retirement and health policy since 1975, beginning with the US Department of Labor. Studies are at www.ebri.org - and we have a library resource available to reporters on most health issues.

    Director of Health Legislation, National Governors Association
    Washington DC 20001

    I have been the director of health legislation for the National Governors Association since January 1999. Prior to that I spent 5 years working for the National Association of State Medicaid Directors.

    Senior Vice President, Commonwealth Fund
    New York NY 10021

    Cathy Schoen is senior vice president at The Commonwealth Fund, a member of the Fund's senior management team and research director of the Fund's Commission on a High Performance Health System. Her work focuses on health insurance, access and initiatives to track and improve health system quality, access and cost performance. She has authored numerous publications on health policy and insurance issues, and national/international health system performance, including the 2006 National Scorecard on U.S. Health System Performance, the 2007 State Scorecard,and international comparative surveys of care experiences. She co-authored the book "Health and the War on Poverty." She holds an undergraduate degree and graduate degree in economics.

    Director, Health Policy Analysis, Consumers Union
    Washington DC 20009

    My main area of focus is affordability of health care, from a consumer perspective. Issues I work on include: the uninsured, the underinsured, Medicare prescription drugs, tax credits for health insurance, medical savings accounts.

    Vice President, The Lewin Group
    Falls Church VA 22042

    Sheils specializes in financial analyses of programs to expand insurance coverage including the impact on providers, consumers employers and governments. He has analyzed a broad range of proposals including tax credits, single-payer,Medicaid/SCHIP expansions, individual mandates and employer pay-or-play proposals.

    President, National Coalition on Health Care
    Washington DC 20005

    President of the National Coalition on Health Care, an alliance working on health care reform. Former HHS Deputy Assistant Secretary for Health and Director of Bureau of Drugs at the FDA. Expertise in health care delivery and quality.

    Professor and Director, The Peter Iamy Center on Drug Therapy and Aging
    Baltimore MD 21201

    I am an expert on factors that influence prescription drug coverage, use, and cost for older adults. I am also an expert on policy issues relating to drug coverage under Medicare, Medicaid, state pharmaceutical assistance programs, and private insurance.

    President, United Hospital Fund
    New York NY 10118

    President of United Hospital Fund and recognized nationally for leadership in health care policy. The United Hospital Fund is a health services research and philanthropic organization which addresses critical issues affecting hospitals and health care in New York City.

    Professor and Chair, Dept Health Policy Mgt, Emory University
    Atlanta GA 30322

    Medicare reform, uninsured, cost of health insurance. Chair, Department of Health Policy and Management, Emory University. Former Deputy Assistant Secretary for Health Policy under President Clinton

    Senior Vice President of Consumer Health and Medical Care Advancement, UnitedHealth Group
    Minnetonka MN 55343

    A graduate of Howard University and Georgetown University School of Medicine, Dr. Tuckson is currently Senior Vice President of Consumer Health and Medical Care Advancement at UnitedHealth Group. He has served as Senior Vice President, Professional Standards, for the American Medical Association (AMA). He is former President of the Charles R. Drew University of Medicine and Science in Los Angeles from 1991 to 1997; has served as Senior Vice President for Programs of the March of Dimes Birth Defects Foundation from 1990 to 1991; and from 1986 to 1990, Dr. Tuckson was the Commissioner of Public Health for the District of Columbia. He currently is a member of Institute of Medicine of the National Academy of Sciences and serves as a member of the Secretary of Health and Human Services' Advisory Committee on Genetics, Health and Society and has held a number of other federal appointments, including cabinet level advisory committees on health reform, infant mortality, children's health, violence, and radiation testing.

    President, Hamilton PPB
    Washington DC 20008

    Dr. Alec Vachon spent nearly 10 years on the Hilll, working first for Senate Majority Leader Bob Dole (R-KS) and later as Senate Finance health staff -- on BBA 95, BBA 97, etc. Vachon is President of Hamilton PPB, a Washington consulting firm providing intelligence and insight, strategic advice, and advocacy before Congress and the Executive Branch.

    Peggy Y. Thomson Professor (Chair) for the Evaluative Clinical Services, Dartmouth Medical School

    "For more than 40 years, Wennberg has studied and documented striking variations in health care delivery across the United States, concluding that where a patient lives determines the amount of medical care he or she receives. His work is frequently cited as evidence of the lack of a scientific basis for most medical practice. His recent research has focused on ways to document the outcomes, or results, of various medical practices and communicate this information to patients. With his Harvard colleague Dr. Al Mulley he founded the Foundation for Informed Medical Decision Making, an organization that works to promote patient involvement in medical care decisions." (Description from Darmouth Medical School)

    Principal, Hewitt Associates
    Lincolnshire IL 60069

    Practice leader for health actuarial services for Hewitt Associates. Focus on employee benefits and health policy issues (in particular Medicare)

Selected Websites

Glossary on the Uninsured

CAPITATION - Method of payment for health services in which a health care provider is paid a fixed amount for each person on the provider's patient roster, regardless of the actual number or nature of services provided to each person.

CARRIER - An entity which may underwrite or administer a range of health benefit programs. May refer to an insurer or a managed health plan.

CARVE-OUTS - A payer strategy in which an HMO or insurance company isolates ("carves out") a benefit and hires another organization to provide this service. Common carve-outs include behavioral health and prescription drugs. The technique is intended to allow the insurer to better control its costs.

CASE MANAGEMENT - A process where a health plan identifies covered persons with specific health care needs, then devises and carries out for them a plan to achieve the best patient outcome in the most cost-effective manner.

COINSURANCE - A portion of the bill for a medical service, that is not covered by the patient's health insurance policy and therefore must be paid out of pocket by the patient. Coinsurance refers to a percentage, e.g., 10 percent of the total charge up to a specified maximum. Contrast with "copayment."

CONSOLIDATED OMNIBUS BUDGET RECONCILIATION ACT OF 1985 (COBRA) - This law includes one part which entitles former employees of companies with 20 or more workers to continue to receive coverage under the group plan for up to 18 months after leaving, if they pay the full cost of the coverage. For more information, see www.dol.gov/ebsa/newsroom/fscobra.html.

CONSUMER-DIRECTED OR CONSUMER-DRIVEN HEALTH PLAN - Includes plans that establish health spending accounts into which employers or individuals contribute pre-tax dollars to be used for health care purchases. These mechanisms aim to change employees from receivers of health care into purchasers by participating more fully in health care and cost decisions. Also see "Health Reimbursement Arrangement" and "Health Savings Account."

CONSUMER PRICE INDEX (CPI) - A statistical measure of the annual change in cost to workers of purchasing a market basket of goods and services. It is expressed as a percentage of the cost of these goods and services during a base period. CPI is also known as retail price index or cost-of-living index.

COPAYMENT - A flat dollar amount that a patient must pay out of pocket for a medical service, e.g. $5 per office visit.

COST SHARING - Any out-of-pocket payment the patient makes for a portion of the costs of covered services. Deductibles, coinsurance, copayments and balance bills are types of cost sharing.

COST SHIFTING - The practice by which a seller of a health service, such as a hospital, increases charges for some payers to offset losses due to uncompensated or indigent care or lower payments from other payers.

DEDUCTIBLE - A fixed amount, usually expressed in dollars in the form of an annual fee, that the beneficiary of a health insurance plan must pay directly to the health care provider before a health insurance plan begins to pay for any costs associated with the insured medical service.

DEFENSIVE MEDICINE - The practice of health care providers ordering tests that may not be necessary to over-protect themselves from potential malpractice lawsuits. Said to be a major cause of high health care costs.

DEFICIT REDUCTION ACT OF 2005 (DRA) - The DRA made significant changes to the Medicaid program - for example, allowing states to increase premiums and cost sharing for families and to base benefits on private plans. The law also tightened long-term care asset transfers and capped home equity at $500,000. A DRA provision effective July 1, 2006, requires Medicaid beneficiaries to show proof of citizenship upon applying for or renewing their benefits. For more information, see www.kff.org/medicaid/7465.cfm.

DEFINED BENEFIT - A health insurance model used by an employer or government program where specified health services covered under the plan are standardized and guaranteed. The cost of providing the standard benefits may fluctuate. One example of a defined benefit plan is Medicare. Contrast with "defined contribution."

DEFINED CONTRIBUTION - A health benefit model used by employers or government programs where health services covered may fluctuate based on choice of plan, but the employer or government contributes a set amount (percentage or dollar amount) towards the purchase of the selected health plan. A defined contribution plan limits the financial liability of employers or the government, because the contribution is defined, or fixed. An example of a defined contribution plan is the State Children's Health Insurance Program. Contrast with "defined benefit."

EMPLOYEE RETIREMENT INCOME SECURITY ACT (ERISA) - Enacted in 1974, ERISA was primarily designed to secure workers' pension rights. The law established federal reporting and disclosure requirements for most private employee health plans. Under ERISA, companies that pay for their workers' health benefits directly (e.g. by self-insuring and assuming all or most financial risk) are exempt from state insurance regulations and taxes. ERISA also limits workers' ability to sue their insurer. For more information, see www.dol.gov/dol/topic/health-plans/erisa.htm.

EMPLOYER CONTRIBUTION REQUIREMENT OR "EMPLOYER MANDATE - A requirement that employers either provide health care benefits to their workers or pay a fee that contributes to the cost of covering their workers under a public (state) plan. Such proposals are also called "pay or play."

EVIDENCE-BASED MEDICINE - The use of current best clinical evidence in making decisions about the care of individual patients, often with the assistance of information technology. Patient preferences are considered along with clinical expertise.

FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM (FEHBP) - Health care plans offered to federal civilian employees who can annually choose among a number of approved, community-rated private health insurance plans. The federal government pays a major portion of the cost of the coverage (on average 72 percent). For more information, see www.opm.gov/insure/health.

FEDERAL POVERTY GUIDELINES - Income amounts set each February by the U.S. Department of Health and Human Services used to determine an individual's or family's eligibility for various public programs, including Medicaid and the State Children's Health Insurance Program. Sometimes called Federal Poverty Level/Line (FPL). (The poverty guidelines are different from the U.S. Census Bureau's "poverty thresholds," which are used for Census statistical purposes.) For the 2007 poverty guidelines, see http://aspe.hhs.gov/poverty/07poverty.shtml

FEE-FOR-SERVICE (FFS) - A method of paying health care providers a fee for each medical service rendered, rather than - paying them salaries or capitated payments.

FIRST-DOLLAR COVERAGE - Insurance plans that provide benefits without first requiring payment of a deductible.

FISCAL YEAR (FY) - The 12-month period used for calculating annual fiscal spending, which parallels the federal government's annual budget cycle. The U.S. government fiscal year runs from October 1 of the previous year to September 30 of the calendar year for which the fiscal year is numbered. States' fiscal years do not always correspond to the federal fiscal year.

FORMULARY - A list of selected pharmaceuticals and their appropriate dosages created by health insurance plans, which are usually intended to include a broad array of prescription drugs that are also cost-effective for patient care. Physicians are often required or urged to prescribe from the formulary developed by the insurance plans, pharmacy benefit managers or health maintenance organizations with which they are affiliated.

GATEKEEPER/CARE MANAGER - A health care professional, usually a primary care physician, who coordinates, manages, and authorizes all health services provided to a person covered by a health plan. Unless an emergency exists, the gatekeeper generally must pre-authorize referrals to specialists, hospitalizations and lab and radiology tests.

GROUP INSURANCE - Health insurance offered through business, union trusts or other groups and associations. The policy holder is generally the employer or other entity. This system of health insurance is the most common in the United States.

GROUP-MODEL HMO - A health maintenance organization (HMO) that contracts with a single multi-specialty medical group to provide care for HMO members. The HMO compensates the group for contracted services at a negotiated rate, and that group is responsible for compensating its physicians and contracting with hospitals for care of their patients. Also see "health maintenance organization," "staff-model HMO" and "network-model HMO.

HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT (HIPAA) - A 1996 federal law that provides some protection for employed persons and their families against discrimination in health coverage based on past or present health. Generally, the law guarantees the right to renew health coverage, but does not restrict the premiums that insurers may charge. HIPAA does not replace the states' role as primary regulators of insurance. HIPAA also requires the collection of certain health care information by providers and sets rules designed to protect the privacy of that information. For more information, see www.hhs.gov/ocr/hipaa.

HEALTH MAINTENANCE ORGANIZATION (HMO) - A managed care plan that combines the function of insurer and provider to give members comprehensive health care from a network of affiliated providers. Enrollees typically pay limited copayments and are usually required to select a primary care physician through whom all care must be coordinated. HMOs generally will not reimburse all costs for services obtained from a non-network provider or without a primary care physician's referral. HMOs often emphasize prevention and careful assessment of medical necessity. See "group-model HMO," "network-model HMO" and "staff-model HMO."

HEALTH OPPORTUNITY ACCOUNT (HOA) - A type of health savings account for Medicaid beneficiaries created by the Deficit Reduction Act of 2005. States may deposit annual sums of up to $2,500 per adult and $1,000 per child into the account, to be used to pay for medical expenses not covered by the high deductible health plan with which the account is coupled. Beginning January 1, 2007, as many as 10 states can initiate HOA demonstration projects. Compare to "health reimbursement arrangement."

HEALTH REIMBURSEMENT ARRANGEMENT (HRA) - A type of health insurance plan also known as "health reimbursement account" or "personal care account," HRAs are tax-preferred accounts with funds established by employers to reimburse employees for qualified medical expenses; often HRAs are paired with a high-deductible health plan. An HRA may be used by an employee to pay for medical coverage until funds are exhausted. Once the deductible is reached, normal coverage begins. Any unused funds are rolled over at the end of the year, but do not follow the employee once he or she changes jobs. Compare to "health savings account."

HEALTH SAVINGS ACCOUNT (HSA) - A type of health insurance plan similar to HRAs (see above), but which is owned by workers. An HSA is a tax-preferred savings account and is paired with a high-deductible health plan. Any employer can offer an HSA (or a self-employed individual can set one up on his or her own), and both employers and employees can contribute to it. The worker must pay for all services until the amount of the deductible is reached (in 2006, a minimum of $1,050 for an individual and $2,100 for family coverage). The worker can withdraw money from the HSA to pay for medical services under the deductible. Once the deductible is reached, normal coverage begins. Any unused funds are rolled over at the end of the year. Unlike HRAs, HSAs follow an employee when he or she changes jobs. Also see "health reimbursement arrangement" and "medical savings account."

INDEMNITY INSURANCE - A health insurance plan that pays providers on a fee-for-service basis for delivering health care. Consumers face very few restrictions on provider selection, but may have greater financial liability in the form of deductibles and coinsurance than in many managed care plans.

LOSS RATIO - The ratio of money paid out by an insurer for claims divided by premiums collected for a particular type of insurance policy. Low loss ratios indicate that a small proportion of premium dollars was paid out for benefits, while a high loss ratio indicates that a high percentage of the premium dollars was paid out.

MANDATE - Used in two senses in health policy discussions. (1) Employer or individual mandate, in which the government imposes a requirement on some or all employers to help pay for insurance coverage for their workers (and perhaps their families), or on individuals to obtain coverage. (2) State mandate, a requirement imposed by states on insurance companies to include, as part of any health insurance policy they sell, coverage for a specific service, such as well baby care, or provider, such as psychologists or optometrists.

MEDICAL SAVINGS ACCOUNT (MSA) - A health insurance option consisting of a high-deductible insurance policy coupled with a tax-preferred savings account. MSA policies, enacted in 1996, have been largely replaced by health savings accounts.

MEDICALLY NECESSARY - Description of services or supplies required to preserve and maintain the health status of a patient in accordance with the area standards of medical practice. Whether or not medically necessary services are being denied to patients enrolled in some public and private managed care plans can be an issue of contention. To resolve these issues, many plans have appeals and grievance processes.

MULTIPLE EMPLOYER WELFARE ASSOCIATION (MEWA) - A group of employers who band together for purposes of purchasing group health insurance, often through a self-funded approach MEWAs are sometimes exempt from state benefit mandates, taxes and other regulations.

NETWORK-MODEL HMO - A health maintenance organization (HMO) that contracts with more than one independent physician group to provide health services. The providers may see patients who are not members of the HMO. Also see "health maintenance organization," "group-model HMO" and "staff-model HMO."

OUT-OF-POCKET CAP/MAXIMUM - An annual limit on how much the patient has to pay in deductibles, coinsurance and copayments.

PARTIAL CAPITATION - An insurance arrangement where the payment made to a health plan is a combination of a capitated premium and a payment based on actual use of services. The proportions specified for these components determine the insurance risk faced by the plan. Sometimes called "ambulatory capitation."

PAY FOR PERFORMANCE (P4P) - A method of paying health care providers differing amounts based on their performance on measures of quality and efficiency. Payment incentives can be in the form of bonuses or financial penalties.

PAY OR PLAY - See "employer contribution requirement"

PAYROLL TAX - A flat percentage tax collected on salaries and wages. A payroll tax of 7.65 percent on both employers and employees finances Social Security cash benefits and Medicare Part A hospital services. Of that 7.65 percent, 1.45 percent each, or a total of 2.9 percent of payroll with both employer and employee contributions, is allocated for Medicare.

POINT-OF-SERVICE PLAN (POS) - A managed care plan that combines features of both prepaid and fee-for-service insurance. POS plan enrollees decide whether to use network or non-network providers at the time care is needed, but usually are subject to reduced coverage and larger copayments for using non-network providers.

PREFERRED PROVIDER ORGANIZATION (PPO) - A health care delivery system through which a number of providers contract to serve health plan enrollees on a fee-for-service basis at discounted fees. Providers agree to PPO discounts in the hope of gaining more patients. Patients may use any provider without a referral, in network or out, but have a financial incentive - for example, lower coinsurance payments - to use doctors on the preferred list.

PREMIUM - The cost of health plan coverage, not including any required deductibles or copayments.

PREMIUM ASSISTANCE - The use of federal funds available through public health coverage programs - especially Medicaid and the State Children's Health Insurance Program (SCHIP) - to purchase or help purchase private insurance.

PROVIDER - Any health care professional or institution that renders a health service or provides a health care product. Major providers are hospitals, nursing homes, physicians and nurses.

REFUNDABLE TAX CREDIT - A way of providing a tax subsidy to an individual or business, even if no taxes are owed. If a person owes no tax, the government sends the person (or a third party) a check for the amount of the refundable tax credit.

REIMPORTATION - The process by which individuals or groups purchase pharmaceuticals from other countries that were originally produced in the U.S. and exported for consumption abroad. Because many other countries have lower drug prices than the U.S., this process can save consumers money on drugs for personal use. Reimportation can occur either by traveling to another country to purchase drugs (e.g., driving to Canada), or by purchasing drugs over the Internet or by mail from foreign pharmacies. Though traditionally not the subject of law enforcement, most reimportation violates U.S. federal drug safety laws.

RELATIVE VALUE SCALE (RVS) - An index that assigns weights to each medical service; the weights represent the relative amount to be paid for each service. To calculate a fee for a particular service, the index for that service is multiplied by a constant dollar amount (known as the conversion factor). Medicare uses an RVS to calculate payments to physicians.

RISK SHARING - A method by which the financial risk of covering a group of enrollees is shared by plan sponsors and purchasers, typically managed care organizations and states. In contrast, indemnity plans assume all risk of providing care paid for through insurance premiums which belong solely to the insurance company.

SELF-EMPLOYED DEDUCTION FOR HEALTH INSURANCE - Self-employed taxpayers and their families can deduct all their payments for health insurance, including insurance premiums, when figuring their annual income for tax purposes, to the extent these payments exceed 7.5 percent of adjusted gross income.

SELF-INSURANCE - Large and medium-size companies often assume all or most financial risks of providing health insurance to their workers, as opposed to purchasing insurance coverage from commercial carriers (and having the carrier assume all risk). Claims processing is often handled through an administrative services contract with an independent organization, often an insurance company.

SMALL BUSINESS HEALTH PLAN (SBHP) - Purchasing pools for small employers that have frequently been the subject of congressional proposals, SBHPs would include trade, industry and professional associations as well as "cooperative" corporations or chambers of commerce. Known in other proposals as association health plans, SBHPs have generated controversy because they would be exempt from some state laws regulating health insurance.

SMALL GROUP MARKET REFORM - Generally refers to laws, regulations and proposals that are designed to simplify rules for small employers (50 workers or fewer) purchasing health insurance. While most regulation of health insurance is done at the state level, the 1996 Health Insurance Portability and Accountability Act made some key reforms.

STAFF-MODEL HMO - A health maintenance organization (HMO) that delivers health services through salaried physicians who are employed by the HMO exclusively to care for HMO enrollees. Also see "health maintenance organization," "group-model HMO" and "network-model HMO."

STATE MANDATE - State coverage laws requiring private insurers to cover specific services (such as well-baby care) or reimbursement for specific providers (such as psychologists). The Employee Retirement Income Security Act generally exempts self-insured companies from these requirements.

SUSTAINABLE GROWTH RATE (SGR) - The Balanced Budget Act of 1997 established the formula for determining annual SGR targets for physicians' services under Medicare. The SGR is intended to control growth in total Medicare expenditures for physician services. If expenditures exceed the SGR target, the fee schedule update is decreased. Four factors are used to calculate the SGR: (1) average percent change in physician fees; (2) change in the average number of fee-for-service beneficiaries; (3) 10-year average annual growth in GDP per capita; and (4) change in expenditures due to new laws or regulations.

TAX CREDIT - A flat amount that can be subtracted from taxes owed. Under some health care reform proposals, tax credits would be given to moderate-income individuals/families to subsidize health insurance premiums. A tax credit is more progressive in its impact than a tax deduction of the same amount, since the value of a deduction is greater for those whose tax rates (and usually incomes) are higher.

TAX DEDUCTION - An amount that can be subtracted from taxable income if spent on a specific purpose. Currently, businesses and the self-employed can deduct the cost of health insurance provided to employees, but health expenses (including insurance) are a deduction for families with group health insurance only after they reach 7.5 percent of income.

TAX PREFERENCE (FOR HEALTH BENEFITS) - Employer-paid health benefits are treated under federal tax law as a deductible business expense for the employer, and excluded from taxable income for the worker. This creates incentives for some employers and workers to prefer extra compensation in the form of more health coverage rather than wages.

TERTIARY CARE - Health care services provided by highly specialized providers such as neurosurgeons, thoracic surgeons, and intensive care units. These services often require highly sophisticated technologies and facilities.

THERAPEUTIC SUBSTITUTION - Replacement of one drug with another drug from the same therapeutic class that the Food and Drug Administration has determined to be equivalent - the substitute has the same active ingredient with the same absorption rate as the original drug. Often, this results in prescribing the less costly compound.

THIRD PARTY ADMINISTRATOR (TPA) - A professional firm that provides administrative services to employers who want to self-insure their employees. The TPA does not underwrite the financial risk of providing coverage.

THIRD PARTY PAYER - Organization, public or private, that pays or insures medical expenses on behalf of enrollees. An individual pays a premium, and the payer organization pays providers' actual medical bills on the individual's behalf. Such payments are called third-party payments and are distinguished by the separation among the individual receiving the service (the first party), the individual or institution providing it (the second party), and the organization paying for it (third party).

TRADE ACT HEALTH INSURANCE SUBSIDY - Premium subsidy program that covers 65 percent of the cost of health insurance for early retirees, their families and other workers who have lost their employer-sponsored health coverage as a consequence of company failure due to trade practices or bankruptcy. The subsidy to former workers is provided in the form of a federal tax credit either to be claimed when the income tax return is filed, or sent directly to the beneficiary's health insurance provider each month, in which case he/she is responsible for paying only 35 percent of the monthly premium. For more information, see www.familiesusa.org/assets/pdfs/TAARA_Implement_Nov_2003.pdf.

UNBUNDLING - Separately billing for medical services that might otherwise be priced together ("bundling"). For claims processing, this includes providers billing separately for health care services that should be combined according to industry standards or accepted coding practices.

UNCOMPENSATED CARE - Care rendered by hospitals or other providers without payment from the patient or a government-sponsored or private insurance program. It includes both charity care, which is provided without the expectation of payment, and bad debt, for which the provider has made an unsuccessful effort to collect payment due from the patient.

UNDERINSURED - People with public or private insurance policies that do not cover all necessary health services, resulting in out-of-pocket expenses that often exceed their ability to pay.

UPPER PAYMENT LIMIT (UPL) - Federal regulatory payment limit governing what states can pay eligible public facilities for Medicaid services. The UPL is usually the rate Medicare would pay for the same service. In some cases, states request federal matching funds in amounts that exceed the state's standard Medicaid reimbursement rate, and use the new revenues generated for other goods or services.

VOUCHER - In various health reform proposals, a certificate or fixed dollar amount that is provided to low- or moderate-income persons, which is used to pay all or part of the cost of health insurance or services.


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3 Catlin, Aaron et al. (2008) "National Health Spending In 2006: A Year Of Change For Prescription Drugs." Health Affairs, January/February 2008, p. 16. (www.healthaffairs.org)

4 Catlin, Aaron et al. (2008) "National Health Spending In 2006: A Year Of Change For Prescription Drugs." Health Affairs, January/February 2008, p. 14. (www.healthaffairs.org)

5 Keehan, Sean et al. (2008). "Health Spending Projections Through 2017: The Baby-Boom Generation Is Coming to Medicare." Feb. 26, w145 (www.healthaffairs.org)

6 Catlin, Aaron et al. (2008) "National Health Spending In 2006: A Year of Change for Prescription Drugs" Health Affairs January/February 2008, p.23. (www.healthaffairs.org).

7 Catlin, Aaron et al. (2008) "National Health Spending In 2006: A Year of Change for Prescription Drugs" Health Affairs January/February 2008, p.17. (www.healthaffairs.org).

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25 "Employer Health Benefits: 2006 Annual Survey" Kaiser Family Foundation and Health Research and Educational Trust 2006. (www.kff.org).

26 "Health Care Costs: A Primer" Kaiser Family Foundation, August 2007. (http://www.kff.org/insurance/upload/7670.pdf) Retrieved Sept. 1.

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29 Peter R. Orszag (2007). "Health Care and the Budget: Issues and Challenges for Reform" Congressional Budget Office. Testimony before the U.S. Senate Budget Committee, p. 2, June 21, 2007 (www.cbo.gov/ftpdocs/82xx/doc8255/06-21-HealthCareReform.pdf).

30 John A. Poisal et al. (2007). "Health Spending Projections Through 2016: Modest Changes Obscure Part D's Impact" Health Affairs Web Exclusives February 21, 2007. (www.healthaffairs.org).

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34 "Covering Health Issues 2006" Alliance for Health Reform, 2006. p. 112-113. (www.allhealth.org).