Decoding the health care debate — a glossary

Medicaid
Medicaid is the primary insurance program for low-income Americans. The states and the federal government share the cost of Medicaid. On average, the federal government pays for 57 percent of Medicaid costs, though this varies from state to state with high-income states bearing more of the burden than low-income states.

Total enrollment is more than 60 million. About 30 million low-income children and 15 million adults are covered, as well as 6 million elderly and 9.6 million blind or disabled people.

The Medicare program — which is distinct from Medicaid — pays for medical treatment for  Americans age 65 and older and for people with permanent disabilities.

Medicaid helps about 1 in 5 Medicare beneficiaries to pay their premiums for coverage and to pay some additional costs. These low-income people are called the “dual eligibles.”

According to the Kaiser Commission on Medicaid and the Uninsured, the dual eligibles account for more than 45 percent of Medicaid spending for medical services.

Medicare
Medicare is the taxpayer-supported plan that pays for the medical care of 44 million individuals, including most Americans who are age 65 or older.

Medicare Part A pays for hospital and nursing home care.

Medicare Part B covers the costs of physicians’ services and other outpatient care.

Medicare Part C, the Medicare Advantage program, is an alternative to the traditional fee-for-service Medicare. It allows people to enroll in a private plan. The federal government then reimburses the private company for providing Medicare-covered benefits.

Medicare Part D pays for prescription drugs.

Workers’ payroll taxes pay for most of the cost of Medicare, but the people enrolled in the program also pay monthly premiums.

Opt-in public plan
A government-run plan for people not enrolled in employer-sponsored insurance, Medicare, or Medicaid. Under the opt-in model, states would not take part in such a plan, unless they affirmatively chose to do so. But Congress has yet to decide how states would exercise that choice, whether through referendum or by a state legislature vote.

Opt-out public plan
A form of a government-run health plan which Senate Majority Leader Harry Reid included in his version of the overhaul bill. If a state decided it didn’t want a public option, it could pass a law to opt out of the federal program.

Out-of-pocket payments
Direct spending by consumers for health care goods and services, including co-payments, deductibles, and any amounts not covered by insurance, are called out-of-pocket payments.

Pay-or-play requirement
A pay-or-play requirement would require companies to offer health insurance to their employees or make a payment to the federal government to help pay for coverage of the uninsured.

Public option (also known as 'public plan')
A public option is a form of government-sponsored insurance that would be offered to the uninsured as one of the choices in the health exchange. President Barack Obama supports a public option and has denied that it is “a Trojan horse for a single-payer system.”

Only people not enrolled in employer-sponsored insurance, Medicare, or Medicaid would be eligible to join the public plan.

Reconciliation
Normally, 60 votes are needed to overcome a filibuster, or an unlimited debate in the Senate. Reconciliation is a streamlined procedure that the Senate may use to enact changes by a simple majority vote, removing the possibility of a filibuster. Senate rules allow the reconciliation process to be used only on a budget bill.

Some Democrats favor using the reconciliation process to pass an overhaul of health insurance. But most health insurance policy changes would be extraneous to a budget bill. Those policy changes would be stricken from the bill unless 60 senators voted to override the chamber's rules.

Sin taxes
Taxation of products such as cigarettes, alcohol, and fatty food — items, when used by Americans, can raise the cost of health care for everyone. Reform advocates hope that high taxes would persuade Americans to cut their consumption of these products and thus improve their health.

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Single-payer plan
A system under which medical care for all Americans would be paid for by the federal government is a single-payer plan. Sen. Bernie Sanders, I-Vt., has introduced a bill that would set up a single-payer, or universal, system. His bill would replace Medicaid, Medicare, the Children's Health Insurance Program, and the federal employees benefits plan with a universal package. Sanders would curb, or even perhaps eliminate, private-sector health insurance by prohibiting the sale of insurance that duplicates benefits provided under the single-payer plan.

Sustainable growth rate
Each year, Medicare sets fees for physicians’ services using a “sustainable growth rate” formula. This target is updated annually to reflect inflation, the increase in the number of Medicare enrollees, and other factors. If actual Medicare spending for physicians’ services has increased faster than the target, the SGR is supposed to automatically reduce future payments for those services.

The CBO estimates that under current SGR policy, physicians will receive about a 21 percent cut in payment rates in 2010. But, in recent years, responding to complaints by doctors, Congress has voted to suspend these cuts, which is one reason Medicare’s costs keep increasing.

Tax break for employer-provided insurance
The money an employer pays to buy insurance for a worker is excluded from the worker’s taxable income. According to the congressional Joint Committee on Taxation, the Treasury misses out on $226 billion a year in revenues because employer spending on health insurance isn’t counted as taxable income. Some congressional leaders see taxing employer-provided insurance as a principal means of raising the money needed to cover Americans who are now uninsured.

TRICARE
The TRICARE program provides care for the military’s uniformed personnel and retirees, and for their dependents and survivors — in all, more than 9 million people. In 2008, the Department of Defense spent $42 billion on TRICARE, about 6 percent of total defense spending. The Congressional Budget Office forecast that TRICARE will consume 13 percent of total defense spending by 2026.

'Trigger' for public option
A mechanism that would launch a federally-run public plan to compete with private-sector insurers only if private-sector insurers failed to make their own plans less costly for consumers. The centrist House Democrats' Blue Dog coalition and Sen. Olympia Snowe, R-Maine, support a trigger as an alternative to an immediate public plan.

Uncompensated care
Medical care given to a patient who has no health insurance and can’t afford to pay the out-of-pocket costs is called uncompensated care. Hospitals pass the cost of of uncompensated care along to their paying customers.

According to Senate Finance Committee Chairman Max Baucus, this cost shifting accounts for eight percent of the average health insurance premium, or about $1,100 per family per year. American hospitals currently spend over $30 billion a year on uncompensated care with about two-thirds of that amount due to the care of uninsured people, according to MIT economist Jonathan Gruber.

Sources: Center for Medicaid and Medicare Services; Congressional Budget Office; Kaiser Family Foundation; Senate Finance Committee; The Observer (London); The Urban Institute’s Policy Jargon Decoder.

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