Question

Considering a consumer who previously had no insurance and recently received insurance coverage that pays 80 percent of all types of medical care, discuss how you expect this person's demand for hospital care, dental care, and physician services will change. Answer must be 300 words

Answer 1

Demand would increase. Once there is no insurance, the demand for medical care must have been low because of its expensiveness. Hospital care, dental care, and physician services are very expensive nowadays and increasing faster compare to other goods or services; bearing those costs without the help of insurance coverage is almost impossible; therefore, this tends to decrease the demand of medical care although there is a necessity. Sometimes, non-attending for medical care leads to serious damage of health and loss of life.

Now there is an insurance coverage of 80% of medical care; it means that if there is a medical bill of $100,000, the 80% of such bill amount will be paid by the insurance company and the rest of only (100 – 80 =) 20% will be paid by the insurance-holder (patient). Therefore, the burden of payment is gone down from $100,000 (with no insurance) to ($100,000 × 20% =) $20,000 (with insurance) by the patient. This is a real benefit of having insurance, which increases health consciousness of people. They may start thinking about physical exercise, laboratory checking, and consulting with doctors.

Medical care or health care includes hospital care, physician services, dental services, nursing care, drugs, etc. All these are important for improving standard of living of a person. Such costs are covered through Medicare, Medicaid, Private health insurance, and out-of-pocket. Since there was no insurance, all of these costs are financed through out-of-pocket. Since this is the own fund, there must be some limitation of spending – once it reaches the maximum limit, people may not afford it further, which reduces its demand. This is a serious issue why so many people around the world suffering with health issues. In order to prevent such problem, insurance companies come forward with their offers so that people could know their packs and can increase the demand.

The conclusion is demand for medical care could only be increased if there are adequate insurance policies.