Commercial Insurers
Select:
Commercial insurance is health care insurance purchased by individuals or employers on behalf
of their employees.
Financing Community Hospitals
Indemnity insurance pays the hospital for services provided to the insured.
The commercial insurance company pays the hospital for the fees it charges.
Fee-for-service indemnity hospitalization insurance plans are becoming more rare. However,
there is marked variation around the country. Indemnity insurance is much more common in the
midwest and south.
In general, fee-for-service insurance pays the hospital the most money for a given set of
services. It does not discount the fee before paying it.
Financing Academic Hospitals
There is no difference in the reimbursement to academic hospitals from that of community
hospitals under commercial indemnity insurance plans. Academic centers frequently charge
higher fees than community hospitals, and are similarly rewarded.
Financing Subacute and Skilled Care
Commercial insurers pay for subacute care if its covered under the policy for the individual who needs it. Covered services varies widely by plan and policy. Coverage is usually limited.
Financing Custodial Care
Commercial insurance plans pay for custodial care under the terms of plans purchased by individuals. These plans, sometimes called long-term care plans, are increasingly available and usually pay a daily rate ($100-$300).
Financing Ambulatory Outpatient Care
Physicians
(and other caregivers) are paid under a fee-for service system.
Financing Home Care
Some commercial insurance plans cover home care services. This varies by plan. Some have the ability to essentially set up hospitals at home, if needed. The agency is usually reimbursed on a fee-for-service basis.
Financing Hospice Care
Most commercial health plans have some type of hospice coverage. Even if it is not listed in the benefit language of the policy, it can usually be negotiated on a case-by-case basis on humanitarian and financial grounds. Some plans have a cap on the total amount of money for a hospice benefit in the range of $2,000 to $5,000 for a lifetime. At the average per diem that Medicare provides for routine home care of about $107 per day, this benefit cap covers less than 20-50 days. In other words, not nearly as generous as Medicare.
Case managers are an important component of obtaining commercial insurance coverage for hospice. Coverage outside of their policy can often be negotiated by a savvy administrator in the hospice.
Next, consider Managed Care.
CAPC Resources:
Additional resources on "Financing US Healthcare"
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CAPCManual Attribution:
von Gunten CF,
Ferris FD,
Portenoy RK,
Glajchen M, eds.
CAPCManual: How to Establish A Palliative Care Program.
New York, NY: Center to Advance Palliative Care, 2001.
©
Center for Palliative Studies, San Diego Hospice & Palliative Care, San Diego, CA
and
The Department of Pain Medicine and Palliative Care, Beth Israel Medical Center, New York, NY, 2001
Permission to reproduce for non-commercial educational purposes with display of
attribution and
copyright is granted.
Last updated: February 20, 2002
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