Question

Explain the basic structure of health insurance and analyze its most important part. Describe the main purpose of health insurance in your own words.

What impact do you think health insurance has on our economy today?

Explain why managed care was incorporated in the US health care system long ago? Describe and contrast the three types of managed care plans—HMOs, PPOs, and POS?.

Should the same individuals who pay for your health care (managed care organizations [MCOs]) also make your treatment decisions? Why or why not?

Is the fee-for-service (FFS) system more beneficial for the consumer than the current MCO system? Why or why not? Explain.

Answer 1

Health Insurance: It is a insurance which covers the whole or part of an individual's medical expense, where the insurer will develop a financial structure i.e., monthly, quarterly, half-yearly & yearly.

The main structure of Health Insurance Policy involved two, i.e.,

• Insurer (Private / Government)
• Insured (Individual).

The main purpose of health insurance is,

• In protects the insured individual from unforeseen medical expenses.
• Being most of the time cash less, process is hasselfree.
• It protects the national citizens in terms of health
• Under National Health Scheme, its provides wider scope for Government to take care of its citizens

Impact of Health Insurance on our Economy:

• Since the health care spendings has increased many folds in the last couple of decades, the impact of health insurance is protecting the individuals as stated above in terms of financial aspects
• In other ways, since the medical spending is increasing, this forces the employee to cut the cost of other expenses / benefits on the employer.
• A Rise of Health care expense might lower the GDP along with the rise in inflation.
• It may create a larger fiscial deficit in the Budget of the Nations.

Managed Care was incorporated in US :

Managed care was incorporated in US long back to keep the reduce the cost of healthcare expense and at the same time, to increase the quality of the care. Some of the Plans of managed care are:

• HMOs - Health Maintenance Organisation
  • The members of this organisation are allowed to access network of doctors / hospital in exchange of subscription fees.
• PPOs - Preferred Provider Organisation
  • The members of this organisaton have notable discount from the regularly charged fees by the network of doctors/ hospitals already partnered with PPO.
• POS - Point of Service
  • It is same as HMOs but the difference is it offers more flexibility / choice of preference lies with the end user. If they apt for network they will pay less, if not they might pay more.

The Contrasting factor between HMOs & PPOs is HMOs charge subscription fees but PPOs doesn't do it.

The Individual / organization, who pay for my health care should not make my treatment decisions. The reason is the treatment decision should be taken by the doctor only and not the person who pays its. If person who pays for the treatment starts to decide, then the priority of treatment will get changed form the wellness of the patient to the monetary benefit of the different kind of treatments.

Fee for Service (FFS) : It is the traditional health insurnace policy where the insurer will pay the hospital directly for the treatment done. The treatment covered will depend upon the type of policy / coverage / agreement already in place.

MCO System: It is Managed Control System for health care expenses. It enquiry of the situation, and review of the emergency condition, maintaining better standards, blocking loopholes, for the betterment of the service.

On Comparing the FFS & MCO system, FFS is more beneficial for the consumer since there they get the benefits as said in the insurance policy which they opted for which any enquiries/ reviews.