“Insurance tends to increase demand and make patients less price sensitive, which increases prices overall.”
Insurance
The basic concept of insurance is the transfer of risk from one entity to another through certain conditions. Health insurance is no different, only the entities mentioned are consumer or the patient and the insurance company. In the health insurance concept, a premium is paid by the individual to the company for a year and the insurance company has to pay for the cost of healthcare for that individual. Hence the risk for the consumer is transferred to the insurance company.
A consumer point of view - Why people opt for insurance
Healthcare is expensive, even for the wealthy. Having insurance protects you from being poorer. Most incidences are not meant to happen but most times, people cant help it. Consumers think of health insurance that way. The unpredictability, the large impact and the infrequency encourages consumers to purchase health insurance. Moreover, medical bills is the prime cause of bankruptcies.
Risk Pooling
Health insurance use the concept of risk pooling where a group of people from different health backgrounds are put in a single pool. While there is less predictability in who is more likely to get the disease, the basic concept is that the group of people in the pool, whether or not they have health episodes, pay for the people who do. The major problem arises when there is a large disparity in the health conditions of people of different ages. While older people are more prone to diseases, this forces the younger generation to opt out of insurance. This spurs an increase in the premiums, since everyone in the pool would be likely to be affected by health problems.
The risk s...
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...fe insurance, where the patient should decide how much of the money should be left for the beneficiaries. Since price variance is high fee for service would be the most ideal reimbursement model.
Chronic Care
No existing solution may solve the problems regarding the reimbursement of chronic conditions and events related to that. Though population health and accountable care organizations aim to solve these issues, there is less incentive for the consumer to take part in the process. So a mixed model where there is a costumer reimbursement tied with a physician and insurance company cost sharing method would be ideal. Since lifestyle changes are the primary cause of chronic diseases, life insurance scheme could also be tied to this, but in the long run, it can backfire with people choosing not to get medical attention or decreasing the value of health insurance.
On a global scale, the United States is a relatively wealthy country of advanced industrialization. Unfortunately, the healthcare system is among the costliest, spending close to 18% of gross domestic product (GDP) towards funding healthcare (2011). No universal healthcare coverage is currently available. United States healthcare is currently funded through private, federal, state, and local sources. Coverage is provided privately and through the government and military. Nearly 85% of the U.S. population is covered to some extent, leaving a population of close to 48 million without any type of health insurance. Cost is the primary reason for lack of insurance and individuals foregoing medical care and use of prescription medications.
To begin with, a number of researchers have in the past connected the high risk of deaths with lack of proper insurance. The same issue is critically argued by Wilper et al. some researchers have even gone to an extent of suggesting private health insurance, although costly, is more effective than public health insurance (Goodman). Note that, this is not the issue with Wilper et al study. In fact, Wilper et al compares health insurance and mortality rate, with their argument being that the lack of health insurance is the cause of 45,000 adult deaths that take place in America every year.
Although the insurance market should offer more attainable health insurance for everyone, with the healthcare reform act insurance companies have increased their rates to levels that many people cannot even pay. However, because the government is requiring people to get insurance and keep insurance from year to year, they have no other choice but continue to pay insurance premiums to at least have the bare minimum coverage as required to prevent being subjected to penalties (Health Reform Database: Explanation of
From the hospital perspective mandating the health insurance will reduce the problem of Free riders into the Hospital and if a person who is insured visits the hospital for the treatment the cost of his medical treatment will not be totally absorbed by the hospital if the person is unable to pay for the treatment and the amount will be shared between the hospital and the insurance company.
Insurance is a factor in the health of Americans. Most companies are required to offer insur...
Increasing prices for medical treatments, consultations, and drugs is another element in increasing health care costs. Increasing prices of health care services and drugs were the main reason for increasing health care expenditures between 2009 and 2010. Poor productivity is another element of increasing health care costs. Because there is little or no intervening growth in productivity gains for health care, health care costs would increase over time; and because of inelastic demand health care expenditures would also increase (Baumol, 1988). Because it is difficult to measure value of health care service, it is very difficult to evaluate productivity gains in health care. Referrin...
Healthcare plays an important role in almost every person’s life at one point or another. Many times, one can get caught without, or underinsured and it can be detrimental to their livelihood. With the rising cost of healthcare, it is likely that having a national healthcare policy in place, and as an individual, being able to afford and obtain adequate health insurance has not been required until now. With the new national healthcare plan, it is required for all citizens to obtain and maintain some sort of public or private insurance policy. The rising costs can be attributed to many things. A significant reason for the astronomical cost of health care is because of the staggering amount of uninsured or underinsured individuals receiving medical attention and almost many never paying the bill. Those who do have insurance have seen a gradual increase in their premiums and deductibles to make up for this.
From the baby Boomer generation, to the young adults just entering the work force for their first time, everyone will have the opportunity to access health care, some for the first time in their lives. Obama Care is an affordable choice for those who need it. When choosing a plan that is right for you, several options are available. “The marketplace allows individuals and small businesses to compare health plans on a level playing field.” (Key Features of ACA by year) With these baseline individuals are able to pick a plan, which is affordable for their lives. In addition to those who select their coverage, there is a separate plan for the population of Americans who are 65 years or older. This plan is known as Medicare. As with every insurance company, Medicare has separate breakdowns plans, to which coverage is not determined by your income. Medicare is an insurance plan for the baby Boomer generation. Robert B. Reich addresses the baby Boomer generation in his essay “Why the Rich Are Getting Richer and the Poor, Poorer” In the essay Reich was able to address the growth of our nation as a metaphor of boats rising and falling. This quote describes how workers in the twenty first century will be responsible for the Baby Boomer’s standard of living. He
The story of “The Celebrated Jumping Frog of Calaveras County” by Mark Twain takes place in Angels Camp, California. Angel’s camp is a gold mining community in the mid-19th century that the narrator claims to have visited to inquire about a Leonidas W. Smiley. Instead the narrator has to endure a tall tale about a gambling addicted Jim Smiley. Throughout the story Twain uses the setting to contrast between the East and West, and its people; ultimately, using the location and area to his advantage. Although the eastern and western United States aren’t specifically contrasted in this short comedy, one can see a definitive contrast between the educated refined narrator from the East and the uneducated but slick characters who populate Angels
Health insurance is a type of insurance that typically covers an insured person’s medical and surgical expenses. The insured person could either pay costs out-of-pocket and then they are reimbursed by their insurance company or the insurance company would pay the costs directly to the healthcare provider. The provider is a clinic, hospital, doctor, laboratory, health care practitioner or a pharmacy. (Nordqvist 2012). Medical assistance would be required in every individual’s life at some point in their lifetime. Which is why the question then is raised whether health insurance should be a basic human right afforded to the general population or if it should be a product that is marketed. In some countries such as Norway and Canada, the government
It is the individual responsibility to cover their healthcare expensed, as a result, people use their own funds or savings to pay their healthcare cost.
With the United Nations listing health care as natural born right and the escalating cost of health care America has reached a debatable crisis. Even if you do have insurance it's a finical strain on most families.
...ions are ageing and increasingly, people are living with one or more chronic conditions for decades (World Health Organization, 2011). If the government can assist in regulating preventive health measure for citizens it will years down the line prove to be a cost effective measure. World Health Organization (2011) states that many chronic conditions were avoidable had the person ben able to receive the preventive education and care needed. Business owners may experience a slight inflation in cost to insure their employees but it does not amount to nearly half as much that will be saved by all citizens having access to preventive medical care.
Health insurance is available from several sources. Private health insurance is provided by private companies. Subscribers pay health insurance companies a monthly fee for health insurance. In return, the company agrees to pay the doctor and hospital costs if the subscriber gets sick. There are different levels of coverage that a subscriber can purchase, but the cost of a health insurance policy is also set by the amount of risk the subscriber is willing to take. The more expense the subscriber is willing to pay, as either deductible or co-payment, the less the insurance company will charge for the insurance. Some Americans purchase their own health insurance, but most employers pay for the health insurance of its workers. Often this insurance
The quantity medical care and issue depending on citizen preference, test, and income, the cost of the treatment and care depend on the cost of expenses minimize the point of service and market price set. The expense depending on the elasticity of medical care and demand as well on this situation the arrows welfare proposition (Pauly p. 532). Information problems can lead to a range of chance inefficiencies and purposeful troubles for the establishment of health care and health insurance by markets there is particular concern about the moral-hazard problem and opposing collection as subsets of unbalanced. Some of these problems, most noticeable and markedly, the Affordable Care Act dedicated practically fully of historically increasing government involvement through the insurances. The market failures afford to cover the arrow identified that the government support and undertake the insurance under any circumstances. The economic emphasizes that an equilibrium stretched through the goods forces and merchandise prices the market problem because of other equilibrium will make contributors be better off. Welfare measure, without making another person worse off is a value judgment. The health care problem and condition is extremely objective in value, and norms by decision maker under health and economics