The cost of providing efficient and quality healthcare services has remained expensive to various states and individuals. Establishment and maintenance of the health facilities, the equipments used, the human resource required, and all the essential supplies should be provided for either by the state when offering the services to its citizens or an individual seeking for the services. Due to the high cost and uncertainties that accompany medical conditions, many people have resorted to taking health insurance cover with insurance companies so that in case of a medical condition whether one time or chronic, their medical expenses can be taken care of by the premiums they periodically pay to such companies. In public health facilities, services are either offered for free or at a reduce cost although, to a significant extends free service delivery compromises the quality. This paper explores ways people pay for their medical expenses using insurance and state offered services.
Definition of Terms
Medical hazard: the chance that the insured takes a higher risk and being more careless because of an insurance cover thereby increasing the potential of claims on the assurer. Mostly it occurs in situations where a party at the point of acquiring the policy does not enter into a contract in good faith and provides misleading information about his or her capabilities and risks involved.
Adverse selection: occurs when the buyers have better information than the seller or vice versa. it usually alerts the usual market process as there can be a missing market since firms have a higher possibility of incurring losses if they sell their products. In life assurance policy, people at higher risk of death will be more willing to take out a policy if the charges are averagely priced and when only the high-risk customers to takes the policy loss is imminent.
Asymmetric information: it is also known as information failure where one party in a transaction has more information about a product than the other. Example if the doctor knows the cost of treatment and the patient does not.
Third part paper: is where the beneficiary to an insurance policy is someone other than the two parties involved, it does not provide any benefit to the insured as it covers liability to the third party. Example is health assurance policy, upon death of a parent it is the children who benefits and not him or her and in motor vehicle third party insurance where in case of liability of death or disability, it is the third party who is compensated and not the insured.
Cream skimming: the act of choosing for some features other than their need of care to enhance reputation or profitability of the service provider. In most case, hospitals tend to prefer less ill patients.
Managed care or managed healthcare: a collection of activities aimed at reducing the cost of healthcare provision while focusing on maintaining the quality.
Fee for service: FFS is a method where healthcare providers are paid for the services offered separately, it gives more incentive to the quantity of service provided rather than the quality.
Assignment: a task allocated to a person as a job or during study.
Capitation: a payment arrangement for services offered by healthcare practitioners.
Risk sharing: it is also termed as risk distribution is where the losses and the premiums of every group member of policyholder are assigned to the group based on a formula that is already predetermined.
Purpose of Coinsurance
Under health insurance policy, most companies get into a contract with the assured of cost-sharing agreement where the policy-holder will pay a set percentage of money at the time the service is being offered after the deductibles have been paid. Copays, coinsurances, and deductible are all forms of cost sharing (Smith, and Medalia,2014 p 56). Deductibles are usually the amount payable by the assured before he or she starts receiving services from a health service provider.
The primary purpose is usually an advantage to the insurance companies as they minimize the burden that arises due to medical expenses. The policy dictates that the insurer can settle the insured needs to meet the deductibles first before the other costs. Copay does spread the cost of care for a year and making it easy to predict and plan for such expenses in advance. In a case where the out-of-pocket maximum is met early enough then, it is the insurance company to pay the service provider of the policy term (Smith, and Medalia,2014 p 58). Co-payment plans are usually charged a set amount of money at the time of service and it varies according to the service as specialist care and emergencies attract more charges.
Offering free health care has both sides of whether it does or does not improve quality of health care. Taking a case of those living under poverty and cannot afford primary health care, managed health care programs have been put in place to provide primary health care to these people in public facilities and their expenses catered for by taxpayers money. At least people do not get to die, suffer from preventable diseases, and other heath related conditions due lack of affordable health care.
However, many problems do accompany these free care service. These challenges include high number of patients leading to crowding as general population are careless to try preventing diseases due to what can be perceived as moral hazard. There are a few practitioners who cream skim the patients and shortages in supplies are some of the issues that compromise the free services. long wait time, socialism state, frequent rationing due to medical abuse, lack of competition and innovation in these facilities, distance from the area of resistance, and an overall increase in government debt are the other difficulties encountered.
Affordable Care Act
Elements of the Affordable Care Act
The Affordable Care Act (ACA) is known to provide the citizens with better health security by ensuring there is a comprehensive health insurance. It is aimed at holding insurance companies accountable, expanding its coverage, enhancing the quality of care, lowering health care cost and to guarantee more choice. The significant elements of the act are eligibility which ensures there is no existing niches in treatment for the poor by providing a minimum Medicaid income admissibility level in the entire United States (Rak and Janis 2013 p 317). Financing of the provision, as at 2014, where new members were funded by the government for three years and it would face down to ninety percent in 2020. IT system and data have been designed to provide a state with the necessary tools.
Coordination with affordable insurance exchanges has enabled people to apply for the insurance using one application and have their suitability determined by programs that ensure all insurance are affordable through one separate process. Benefits is another element that ensures insurance is affordable (Rak and Janis 2013 p 317). Furthermore, community-based long-term services and support helps in funding improvements and programs to assist people to get the services in their community and homes. Quality of care and delivery system, prevent, program for children health insurance, dual eligible, provider payments, program integrity, and program transparency are other important elements.
The problems that the care have addressed include the higher cost of healthcare where the act as provisions to ensure the financing is assisted by the federal government and to provide more choice to the citizens. It also ensures there is improvement in service quality provided by the facilities and ensure that health insurance companies are held accountable.
Cost of ACA
The anticipated cost of the affordable care act is that it is becoming a lot less accessible to many citizens. It is estimated that more than twenty million people who were uninsured are currently covered, and above thirty percent will be covered by 2018. Many insurance policies of these actions are sold at marketplaces
Adoption of the act attracts more spending by the state. Money that supports the care comes from Medicaid expansion where ACA provides cash to State to enable them to expand suitability of Americans under the age of 65 who are 133% of the federal poverty limited. A tax credit that is charged on families and individuals whose income is four times the national poverty level that is $43,420 and $88,200 for individual and families respectively who are not eligible for employer-sponsored insurance, Medicaid, or other acceptable coverage (Rak and Janis 2013 p 317). Cost-sharing subsidies that apply to persons and families who are not qualified plan in silver level of coverage. Finally, from a new high-risk insurance pool that designates about fifty million dollars to create a program that gives stopgap coverage to the medically uninsured and federal agencies administrative cost.
Access to a better care service is a fundamental right of every citizen. Due to that individuals have strived to acquire insurance covers and the federal government to have to develop managed care to help most of its citizens. In this paper, various aspects of insurances have been addressed to improve understanding of health insurance. Co-insurance, free service delivery, and affordable care act have been highlighted. More on ACA elements, the problem solved, anticipated cost, financing also have been explored.
Rak, S., & Janis Coffin DO, F. A. A. F. P. (2013). Affordable care act. The Journal of medical practice management: MPM, 28(5), 317.
Smith, J. C., & Medalia, C. (2014). Health insurance coverage in the United States: 2013. Washington, DC: US Department of Commerce, Economics and Statistics Administration, Bureau of the Census.
If you are the original author of this essay and no longer wish to have it published on the customtermpaperwriting.org website, please click below to request its removal: