Question

a. How does people with different health risks assess insurance products with a given deductible, and explain how supporters of minimizing adverse selection should think about a proposal that all insurance policies should have zero deductibles and coinsurance.

b. Does community rating make the policy tradeoffs inherent in above question is harder or easier to manage?

Answer 1

a. Among all basic and prominent expenses, Americans spend much for their health safety. Such expenses are prepaid in the form of health insurance which constitutes deductible pay, co-insurance pay and even all other expenses which are need to pay from their source of fund which are not covered under medical insurance. Actually they are two set of people who are undergoing health treatment in the US nation. One is non-insured people and the another one is insured people. Insurance plans will differ accordingly to the nature of Disease. So all types of disease have a specific type of insurance coverage. But at the same time those who are not having insurance, they need to pay very high amount as Medical firms need to cover their expenses in order their business. So Medical fees also raised accordingly. Fed government implemented policies to support the medical insured people in order to have zero deductibles and coinsurance.

b. Community rating policy refers to the policy of availing the insurance facilities to all the common people irrespective of race, religion and economical status. Such open policy will be benefit the all sections of the people. This will be advantageous to the minority people like American-African are very thankful to the US Government. Such community rating will help to take care of the insurance plan in order to meet the medical needs. Journal of the American Medical Association
(JAMA) reveals the fact that the factors like aging of the people, increased cost of producing medical drugs and offering medical services urges the fed government to support the insured people as well as the non-insured people. Such policy also supports the advantages of saving their own money instead of compensating for the deductible source and also fed government helps the insurers to have coinsurance.