[MUSIC] Employer provided Health insurance is a large source of employer sponsored coverage. Health insurance is considered to be a critical component of many employees' compensation packages. Particularly for those who work for large companies. The tax benefit to employees and employers are attractive and provide incentives for this benefit to be continued to be offered. The likelihood of adverse selection is minimized in these circumstances since all employees are offered a limited choice of insurance plans and most employees opt to take the coverage. In smaller companies, those with less then 50 employees, insurance coverage is not offered as often. Employers can purchase health insurance for their employees on an insured or self-insured basis. Insured coverage, typically used by small and midsize employers, involves the insurance company charging a premium to cover healthcare costs, administrative expenses, and profit. The insurer assumes all risk for healthcare service provision under these plans. Self-insured plans, typically used by large employers, involve the employer essentially paying for the actual healthcare costs incurred by their employees and paying an administrative fee to insurers to manage the plan for them. The employer assumes all risk under these arrangements. Adverse selection occurs when an individual, who knows their health care needs and preferences, makes choices about insurance in order to maximize their benefits. In group coverage, as exists in employer provided insurance situations, there are limited choices for coverage, therefore, limited chances for people to choose insurance plans that are specifically matched to their needs. Government funded plans. Medicare provides insurance coverage to the elderly and disabled who represent about 13% of the US population. Their costs, however, are quite high, thereby making Medicare the largest pair of healthcare dollars in the US. Given that Medicare is available to everyone once they achieve a certain age, there is limited to no risk of adverse selection. Medicare provides comprehensive healthcare coverage including hospital, physician, and pharmacy services. Medicaid provides insurance to the nation's low income individuals, but the extent of coverage and the population served vary by state. SCHIP, or the State Children's Health Insurance Program, provides coverage to low income children with varying coverage by state. The ACA expanded access to insurance coverage with the introduction of insurance subsidies and Medicaid expansion. This resulted in a shift in the population from those who were previously uninsured to now being covered by insurance. Medicaid expansion caused an increase in the number of people covered by Medicaid plans, predominantly at the expense of the federal government. Insurance subsidies open the market for people to purchase insurance directly with the aid of federally financed premium and cost-sharing subsidies. The graphic shows the shift in funding source with a large increase in federal government funding occurring in the early years of the ACA. [MUSIC]