Question

Allow insurers to refuse to cover people with preexisting conditions, or to charge them more.(To replace the current situation, which prevents health insurance companies from refusing to sell insurance to someone or charge them more just because they have a pre-existing condition).

From a hospital's perspective

Think about the situation before the policy change, and the likely situation after the policy change. Regardless of your assigned perspective, describe the problems you think the policy change was intended to fix or improve, and explain why you think the policy change will or will not fix/improve that problem? Then, FROM THE PERSPECTIVE THAT HAVE BEEN GIVEN, describe how you think you will be affected by the new policy, and what new issues you think might arise if the policy is implemented?

Your answer should include an Issue Summary,

• a summary of the situation (issues) before the policy change;

• an explanation of why you think it will or not be a good policy change;

and, then, from the perspective you were given,

• a description of how you think you (your perspective) will be affected by the policy change

• a recommendation (e.g., should the policy be implemented; suggest a different policy to address the problem the policy was intended to address).

Answer 1

Solution

This is a typical problem faced by the insurance companies across the world.

Before the policy change

Insurers can refuse to sell insurance to someone (or) charge them more just because they have a pre-existing condition

My opinion - I think this kind of policy,is purely beneficial to the insurance companies but not all beneficial to the insured (customers)

According to the definition,insurance is a process in which the insured (customer) transfers his/her risk to the insurer (insurance company) by paying the company(insurer) some amount (called premium) on regular basis.

Insurance only compensates the loss occured due to unforseen situation. It just makes good the loss and is not an investment vehicle.

So,the insurance companies should not purely think of commercial aspects like profitability (or) loss in their business but also consider the number of people life in which they are trying to make a difference.

My suggestion regarding some changes - This policy should be slightly changed and modified to " The insurance companies cannot refuse insurance to any person BUT THEY CAN CHARGE THEM MORE if they have pre-exisiting condition)

Ex: This policy is currently active in India and the insurance industry is booming and is the fastest growing one in the world.

After the policy change - Present Situation

According to the present policy related to the insurance industry,the health insurers cannot refuse to sell insurance to someone (or ) charge them more just because they have a pre-existing condition

My Opinion - I believe this kind of policy,is purely beneficial to the insured (customers) but not all beneficial to the insurers ( insurance companies.

If this policy continues,the portfolio quality of it's clientele will reduce. i.e., the risk of it's portfolio increases tremendously meaning the number of claims from it's portfolio of customers will increase.

The financial strength of companies will worsen drastically moving forward.

So,the people who are having pre-existing conditions pay the normal premium but claim huge amounts (will definitely be more amount than their premium paid) when they are hospitalized.

So,the very purpose of insurance is defeated and it becomes a social service instead of a business.

My suggestion regarding some changes - As mentioned above,This policy should be slightly changed and modified to " The insurance companies cannot refuse insurance to any person BUT THEY CAN CHARGE THEM MORE if they have pre-exisiting condition)

In this way,both the parties - the insured and the insurer both stand to benefit.