By the looks of it, nothing is non-political anymore. In fact, even health insurances are now bombarded with controversies that are ranging from individual rights, government authorities, to maximizing quality of the health care benefits.
The right to health care has been practiced by practically every country in the world, though government regulations and authority derails the trend of having this implemented in full throttle. Part of the failure to practice this right is the politics of amount of government subsidy to the health care expenses.
A part of this government authority also mandates that everyone get the same health care benefits, as with any tax. This is disputed because insurance companies would practically not even reach breakeven should it occur, since they shall also cater government employees, and even those who could not afford comprehensive premiums.
However, it is imperative that should anyone feel like buying health insurance coverage, he should be aware of the regulations, conditions, and other necessary things the contract must require of them in order to avoid trouble in the future.
Health insurance is one way of doing injury cover should an event occur requiring some medical attention. Other forms of injury cover involve worker’s compensation, damages, and personal injury service.
Other than the health insurance, other forms of injury cover are considered to be the insurer’s source of medical cost coverage. The insurance companies account for this in their computation in their coverage, taking the form of copayments and coverage limits.
Through this, insurance providers are not ‘abused’ and that the cost of medical services can be anticipated. As a result of this cost anticipation, more people would be able to avail of the insurance all at the same time.
Health economics is a very unfamiliar subject even to the insurance providers. This is a branch of economics which basically deals with the scarcity of the supply and demand for health care and insurances in a certain place.
One focus of health economics is determining and analyzing the health care markets. These are the five health markets that affect the whole industry of health insurance:
* Health financing market
* Physician and nurses market
* Institutional Writer’s Market
* Input factors market
* Professional education market
The equilibrium of these five markets is important in order to sustain a well-balanced health and health care market.
The health insurance industry is in boom these days but these companies face a great deal of problems, two of which basically determine the future of their businesses. These two problems are what they call the adverse selection, and the ex-post moral hazard.
The problem of adverse selection arises from the limited number of the insurance’s target market. Over the years, they have seen that the pool of clients they get are usually those that are most likely to use it—the unhealthy people. Since there are people who consider themselves “healthy” (as per personal standards), they see health insurances as unnecessary expense. This notion pushed the industry into a breakeven, hence, having them make the decision to inform people of the benefits from having insurances stashed away.
The ex-post moral hazard on the other hand makes the insurance provider hold back in getting into deals. A moral hazard means involving a third party to shoulder the cost of something in which the other two parties had decided without consulting the said party. An example of this would be conducting a series of tests that would certain the diagnosis of the doctor. Doing this will save the doctor from a malpractice suit and the patient getting a more comprehensive treatment, all the while the insurance provider being burdened by extra costs not covered by plan the insurer purchased.
Should these two problems continue to impede the providers from getting past the breakeven, chances are that the industry will decline.
Recent studies show that the prices of health care insurance plans have been gradually increasing over the years. This price increase is driven by virtually endless number of factors, but the most noticeable driver would be the increased utilization of the policies.
As the consumer demand for health insurance increase, so does the utilization of this. Although the companies have anticipated that these insurances will be used at one point or the other, what they did not foresee was the simultaneous usage of these insurances.
As it is, people in developed countries live longer. They acquire services and have access to facilities to prolong their lives because the expenses were shouldered by the health insurance coverage. Furthermore, the fast-paced advances in the field of medicine require high modes of payment as well.
Although the reason above is unavoidable, this other one is: lifestyle. Increase in obesity by unhealthy food choices (population-based), excessive alcohol intake, smoking (resulting to complications like lung cancer), and the use of street drugs, are only some of the factors being considered as the major drivers for insurance price increase.
Because of this, some people who could not afford the inflation of price will have to resort to the basic insurance policies, or worse, not have any insurance plans at all.
Most people believe that health insurance is just a simple pay now-use later kind of product. What they don’t realize is that there is this difference between a comprehensive and a scheduled health insurance.
Because some people tend to abuse the ambiguity of health insurance policies before, what these providers had done is to set definite parameters to every kind of insurance that can be purchased by the insurer.
Comprehensive health insurance only pays a share (depends on the percentage agreed on) of the total cost after the patient’s share has been settled. As its name suggest, this kind of health insurance is usually expensive, likely because of a very high beneficial payout.
Scheduled health insurance on the other hand is more like a pre-meditated health care. This covers the basic policies like going to the doctor by the end of every month and paying for the prescription drug bills. This kind of health plan does not intend to replace the comprehensive one, since its amount payable is very limited and will not be able to cover catastrophic events.
Health insurance policies are as tricky as they are beneficial. If the policy-holder, meaning the client, failed to comply with the rules and regulations of the contract, chances are he wouldn’t be able to benefit from the insurance when needed.
Individual policy payments take many forms, that of which the policy holder must be able to comply. No matter what the trend on health insurance is, these payments do not change because they practically cover everything needed to ensure the client a full benefit once used:
Premium – monthly payment to purchase coverage
Deductible – amount the policy-holder pays before insurance gives it share
Copayment – an out-of-pocket amount from the policy-holder before the insurance reimburses the amount
Coinsurance – policy-holder shares the cost. This is hardly expensive on the side of the patient.
Exclusions – not all medical services will be covered by the insurance, unless specified by the company.
Coverage Limits – policies have amount limits. Anything exceeding the amount shall be shouldered by the patient.
Out-of-pocket maximums – similar to coverage limits, only this time, the patient’s payment obligation ends at a certain amount.
Capitation – amount paid by the insurer to health care provider to cover other family members in case of emergency.
In today’s world where anything can happen almost anytime and anywhere, what is most valued, more than anything else, is your health. But with the fluctuating and seldom increase of prices in today’s market, it is hardly an option to get sick.
That is why an industry was started in order to shoulder the burden of having to save up for your health needs. This is the health insurance industry, and it works like clockwork. However, it is imperative that before getting too involved in the different health insurance trends, you must understand how this industry works.
Health insurances works by calculating the overall risk of healthcare expenses’ fluctuation and it creates a certain program or structure that will ensure that enough money is available once you need it. It has a contract, called the insurance agreement that the client and the agent will agree to a certain plan where a definite amount will be paid by the client every month, or depending on the payment schedule.
This agreement can be renewed every year, or depending on the policy of the insurance agency. The contract contains the type, amount, and cost of the health costs that shall be covered by the plan. Be sure that your agent will give you enough information in order for you to make a sound decision in choosing the right policy for you and your needs.
by: Christine Zafra
Development in the healthcare industry have helped us prolong and improve the quality of lives. Though there has been any advances, there are still about 47 million Americans, including 3.8 Million Floridians who don’t have the insurance they need and therefore don’t have the chance to use many of the medical advances available. In fact, it is the No. 1 obstruction in accessing health care and many people die because of this. Most of the reasons are actually due to financial. The government is fast to respond to their by giving away national health care, but the questions that arise are: are they fast enough and what will they do with the 47 million who are uninsured?
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A health policy is more of a wide plan that helps cover all hospitalization charges in case of sickness or disease. The insured individual can claim a policy up to the value of the sum being insured. The health plan comes in variety from which you need to pick up and choose the scheme the suits your needs.