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Pay-as-you-go Systems. (Compare Funded Systems.) A social contract in which each generation of workers agrees to turn over a fraction of its wages to retirees in return for a promise that when its members retire, they will have a similar claim on the wages of those who are still working for it; Social Security operates largely on this system.

Payroll Taxes. Tax imposed on some or all of workers' earnings that can be imposed on employers, employees, or both. Employers and employees each pay Social Security taxes equal to 6.2 percent of all employee earnings up to a cap and pay Medicare taxes of 1.45 percent, with no cap. Payroll taxes are also known as FICA (Federal Insurance Contributions Act) taxes or SECA (Self-Employment Contributions Act), if self-employed.

Pension Benefit Guaranty Corporation (PBGC). A quasi-independent federal agency that insures private defined benefit pension plans.

Pension Equity Plans. In this type of hybrid pension plan, employers establish retirement accounts for each participant and set account balances equal to a given percentage of final average earnings for each year of completed service.

Performance Contracting. Government's contracting with other organizations to provide services to customers with outcome-based performance targets included in the agreement. (See Outcomes.)

Performance Indicators. Data-based measurements that indicate progress toward achieving outcomes. (See Outcomes.)

Performance Measurement. Measurement on a regular basis of the results and efficiency of services or programs.

Phased Retirement. Employment arrangements that allow workers to move gradually from full-time employment to retirement.

PIA (Primary Insurance Amount). The monthly Social Security benefit paid to beneficiaries who begin collecting benefits at the normal retirement age; it is based on a worker's average indexed monthly earnings.

PILOTS (Payments in Lieu of Taxes). Cash and in-kind contributions that a tax-exempt entity makes more or less voluntarily to a taxing body.

Preferred Provider Organization (PPO). Managed care entity that consists of hospitals, physicians, and other providers on contract to an insurer, employer, third-party administrator, or other sponsoring group to provide health care services to covered individuals.

Price Indexing. (Compare Wage Indexing). Adjusting amounts by the change over time in prices; one prominent Social Security reform proposal would price-index earnings to compute benefits, instead of using wage indexing.

Primary Disease Prevention. Primary disease prevention is aimed at reducing the number of people contracting disease. It can include population-based activities (e.g., water and sanitation services, environmental improvement, health education) or individual clinical services (e.g., immunization). (See also Secondary Disease Prevention)

Prisoner Re-entry. The process of leaving prison and returning to society.

Progressivity. A measure of how tax burdens increase with income. A progressive tax raises a proportionately larger share of income from higher-income than from lower-income taxpayers. Conversely, a regressive tax burdens lower-income populations proportionately more than higher-income ones.

Property Tax. A tax based on the value of property owned by an individual or household. In the United States, most property taxes are levied locally.

Proposition 13. California's hugely effective and nationally influential property tax relief proposition that became law on July 1, 1978.

Prospective Payment. A method of payment for health care services in which the amount of payment for services is set prior to the delivery of those services and the hospital (or other provider) is largely at risk for losses or stands to gain from surpluses that accrue in the payment period. Prospective payment rates typically are per service, per diem, per case, or per capita rates. Rates are adjusted to account for case-mix complexity.

PRWORA (Personal Responsibility and Work Opportunity Reconciliation Act of 1996). Welfare reform act under the Clinton Administration that had the primary goal of helping welfare recipients become self-supporting; abolished open-ended funding of welfare and replaced it with the TANF block grant. (See TANF.)

Public Option. A public health insurance plan, created by the federal government, that would compete with private insurers. The public plan is being considered under health care reform as a way to provide a more affordable option for those purchasing coverage through a health insurance exchange.  A public insurance plan would likely cost less than many private plans because it would have lower administrative costs and could establish or negotiate lower provider payment rates.  As a consequence, the presence of a public plan option could spur private insurers to compete more aggressively by managing care more efficiently and lowering their own costs.