Insurance and Demand for Healthcare

In: Business and Management

Submitted By sangreene
Words 855
Pages 4
Abstract
This assignment will show how having health insurance or not having health insurance determines if a person will receive laser eye surgery. This assignment will also show how the medical market differs from other markets and how this contributes to the rise in health care costs. Finally, the assignment will show how a small business owner whose group insurance policy costs continue to rise may make decisions to halt increases to his insurance cost.

I would not get the laser surgery at the cost of $500.00 per eye. The procedure is considered to be cosmetic and not a medical need or emergency. This would make the surgery elective and a choice. Since my nearsightedness does not interfere with my job performance and also is not a detrimental factor in getting a job, I would not see a need to spend that amount of money. Even though odds of the surgery correcting my vision are very high, due to the surgery not being covered by my health insurance, I could not afford the out of pocket expense for the procedure. Such a response also reflects the reality that the moral hazard is low or non-existent. This is due to the fact that the procedures would not protect me from a disease or debilitating health condition (Folland, Goodman & Stano, 2010, pp. 155-156). If my health insurance covers 80% of the cost of surgery, I would have the surgery. This would mean that I would only have to pay a total of $200.00, as my out of pocket costs would be $100.00 per eye. The insurance company would pay $800.00. Coinsurance allows for the insurance company and the person insured to share the costs of the medical procedure. The insurance company paying the subsidy of 80% of the costs does not expose the person insured to the actual cost of the surgery. This demonstrates that individuals will decide to get more medical procedures especially if they have health…...

Similar Documents

Healthcare Delivery in India - Effects of Public Policy, It and Insurance

...Healthcare delivery in India - effects of Public policy, IT and Insurance Bhavik Kaul 1 Gaurav Dalvi 2 Great Lakes Institute of Management, Chennai October 2012 Abstract The global healthcare industry has greatly transformed itself into a professional service system, wherein each stakeholder has to justify its performance. In the increasingly globalized market, private healthcare providers have started dominating the supply side. Healthcare sector in India needs to be reoriented globally towards excellent service promotions and healthcare be made available at lower cost. With this view we plan to study the impact of various factors on the quality of healthcare delivery in India over the next decade. This research will attempt to verify the impact of the mentioned crucial factors on the Healthcare delivery in India through an empirical research and provide some assessment of the deficit in access to health services through structured integrated way called the Gaps Model of Service Quality which will take into account significant gaps identified & suggest methods to close the gaps. These suggestions will be used to make recommendations towards a 10 year incremental National Health Plan. 1. Theory & Hypothesis The 3 areas that we intend to include into our study of the healthcare landscape are – 1) Public Policy 2) Insurance 3) Healthcare Information Technology Systems (HIT) a. Hypothesis 1: Favorable National Health policies will have a positive......

Words: 2192 - Pages: 9

Demand

...Supply and Demand At the same times as a good number merchandise and requires hold to the essential financial standard of provide and require, in a lot of ways medical treatment does not. The standard of provide and require explains an equilibrium that increases among the contribute of an thing or examination and the require for it. The up-and-down is that of cost. There is a straightforward equilibrium in which as cost set increases; require decreases, and vice versa. Usually, make available reproduces stipulate as who would maintain to increase manufactured goods or provide a repair for which insist has dropped. The difficulty in medical treatment is that the customer frequently disburses small or not anything for services, regardless of the present realism of uninsured amount and copayments. As soon as this is the folder, value discontinues individual an issue in insist and demand enlarges to almost limitless points. There was a time when my health insurance cost me nothing, individual had no deductible and no copayment. So I had no out-of-pocket expenses whatsoever associated with healthcare. Now I really don't like going to the doctor, so it did not matter to me all that much, individual still did not use a great deal of care. But many people, when costs are not a factor, use services at the drop of a hat. This is the reality that triggered the current healthcare crisis. Even now, despite out-of-pocket costs, utilization is at record levels. People even tend to feel...

Words: 1150 - Pages: 5

Healthcare

...claims than at any point in history from patients and tort lawyers. From increased demands by malpractice insurance carriers to higher standards and quality of care criteria, medical professionals are under extreme scrutiny which makes the art of practicing medicine very difficult. As pressure continues to mount in America both by politicians and social groups how are demanding a restructuring and overhaul of the current system, medical professionals will have to be very diligent about meeting the new standards expected in healthcare of they will face lawsuits and tort actions that could destroy their careers (Qazi, 2012). The healthcare debate in the United States has been dominating the industry since President Obama passed key legislation that will forever change the American medical system. Arguments against healthcare reform stem largely from the provisions and laws that are being proposed by Obamacare. The restructured proposals have drawn many opponents, especially in the healthcare and insurance industry. Primarily, the argumentative claim is that the costs to practice medicine and insure all patients will not be sustainable. Additionally, the increase in the amount of patients that will flood the system will demand an increase in medical insurance premium costs, drive down competition, and lower the overall quality of care that Americans are used to receiving. For private physicians, the demands placed on their practices to meet and maintain the new laws and......

Words: 923 - Pages: 4

Income, Risk, and Consumer Demand for Healthcare

...Income, Risk, and Consumer Demand for Healthcare Why is the depreciation of capital good a cost of society? In what ways does a person’s health depreciate? Depreciation is the way to track the wear and tear of assets over time. Now, only those assets which are defined as being capital goods can depreciate. The capital goods will provide value or generate income for the company over a period of time normally greater than one year. The depreciation of capital goods requires knowing three different variables: the original cost of the asset, the salvage value of the asset and the life expectancy of the asset. All three of these variables help the organizations or companies to determine the amount to write policies off against income on an annual basis. Based on that, the cost for the society for the use or availability of this service or technology will be established. So the investment for example on a new instrument or new technology will be recuperated thru the years of use as income, and this income would be obtained from the users (customers). At the end, the company will obtain the total investment plus some income from that investment if used by customers to obtain good health. The health is treated as a stock which degrades over time in the absence of "investments" in health, so that health is viewed as a sort of capital. Unfortunately the depreciation rate increases with age similar to any instrument or technology. It is more difficult to achieve......

Words: 2428 - Pages: 10

Healthcare Insurance

...Cameron 1 Issues on Healthcare Insurance Although the United States is dealing with the issue of healthcare insurance, the president should consider ways to avoid letting the needy families suffer because there are children and adults in need of healthcare insurance. Healthcare coverage insurance is a way of method to apply for medical coverage when you are sick, has an injury or to help use for preventative health measures. Medicaid is a form of health insurance coverage that is provided to most individual in most states whom is eligible for it. It provides coverage to a many low-income families. An important issue that is going on in this day and time is that universal health insurance coverage will have to be mandated for everyone, by way of method through private insurance, through state or by means of your employer. By means of having your own insurance coverage will provide for a lot families to make their own informed decision about their health coverage. Healthcare coverage will be expanding and have affordable coverage for lower-income families in the upcoming future. There a variety forms of healthcare coverage which is available out there for the old, young and disable. There are also forms of insurance for the rich (high class), middle class and the low income class. Just to name a few are: Medicaid, which is provide through federally-funds, Medicare which provides coverage to people over the age of 65 and those with disabilities. Health Saving Account and...

Words: 1039 - Pages: 5

Insurance

...Executive summary The life insurance industry in India is achieving a growth rate of about 4% annually. It is considered to be one of the fastest growing sectors. The changing socioeconomic demographics and consumer behavior along with increased frequency of natural calamities and disasters have been the main reasons for the growth of this Industry. Its assets as on 31.03.08 were valued at $185 billion with a total of 250 million policies sold and an employee turnover of 113000 and about 1.2 million agents. There are currently 22 life insurance companies with LIC being the only public company having a market share of almost 50%. ICICI comes in second with 10% followed by HDFC at 6%, SBI at 5%, Bajaj at 4%, Reliance at 4%, Birla at 4%, Max 3%, Tata 3%, Kotak 2%, Met 1% and the rest taking up 10% of the market share. As of 2006 FDI norms the foreign participation of Indian insurance companies is restricted to 26%. All the life insurance companies of India have to comply with the strict regulation laid out by the ‘IRDA’ which is the insurance regulatory board in India set up in 2000. The majority of the population in India is yet to be tapped leaving a huge growth potential for this industry. The insurance industry in India is both service based as well as product based. Risk management and product development are the main highlights of R&D in this industry. The life insurance industry is re shapping the retail distribution channel. The life insurers engage with......

Words: 10894 - Pages: 44

A Comparison of the Healthcare Insurance in Germany and the Uae

...The healthcare system in the UAE and Germany Name Affiliation Introduction The UAE has a very fast growing and dynamic healthcare market, currently it’s the fastest growing in the Middle East. This growth has mainly been supported by intensive government spending on the sector. The government of UAE also has a very central role in the provision of health services and in recent times the government has taken initiative to involve the private sector in the provision of these services. Due to rapid development in recent years the UAE offers a lucrative pharmaceutical market that boasts of high standard medical facilities ("UAE to Be One of the Fastest Growing Markets for Healthcare in the Region, Says Alpen Capital", 2014, pp. 4-5). A few years back it was required that all people that were employed in the UAE to have a health card. The card was given to the public on a small charge but this is no longer the case as the sector has become more diversified. For Abu Dhabi, there had been introduced a compulsory health insurance. Dubai was considering the introduction of a unified health insurance cover for both nationals and non-nationals and if successful this was to be and has been spread out to the rest of UAE. Dubai has two healthcare free zones, Dubai Biotechnology and Research Park and the Dubai Healthcare City (Woodman, 2012). Having a strong healthcare system, the government is aiming at diversifying the economy and also ensure the availability of the essential......

Words: 1083 - Pages: 5

Simplifaction of Healthcare Insurance

...  Today, consumers face a baffling health insurance marketplace, especially if they buy insurance on their own. Americans find it all but impossible to compare health insurance policies on an “apples-to-apples” basis because the policies are written in legalese and the terms of coverage are so varied. As lawmakers consider comprehensive health care reform, they have an opportunity to manage the way we “shop” for health insurance. Recommendations include new consumer-friendly rules for the health insurance marketplace. These rules require clear and consistent definitions of insurance terms, standardized health plan provisions, new health plan disclosure forms, unbiased enrollment assistance and rigorous enforcement at the state and national levels (Healthy Policy Brief, 2009). There is a more improved way to seek health insurance. We need a health insurance marketplace which has consumer protections commensurate with the importance of the purchase, new rules for insurance plan disclosure that considers real consumer decision-making behavior and less variation in health plan design so that consumers can easily compare benefits and costs. In order to create this new marketplace, there is a proposal of five specific changes that must be created: a manageable number of plan choices, standardized benefit designs, standardized consumer-friendly health plan materials, decision aids and a strong federal oversight body. Consumers should have a manageable number of “good” health plan...

Words: 1052 - Pages: 5

Insurance

...Insurance as an industry has secured a vital position in the development of the nation’s economy. An efficient insurance market is essential to achieve integration into the global economy and sustainable strong economic growth. In conjunction with the forces of global consolidation, current advances in information technology and the potential of e-business mark the beginning of a veritable efficiency revolution in the insurance industry. One of insurance's key roles is safeguarding the financial health of small and medium-sized enterprises. In addition to the protection provided by social security systems, insurance cover is crucial for people to insure themselves against inability to work, set aside money for retirement or protect themselves against the loss of their assets. Insurance reduces the investment risk faced by companies and the state. Many companies find it far more expensive, if not impossible, to take out a loan without purchasing the requisite insurance protection. Insured, thereby reduces the costs of raising the capital they need. By reducing investment risk, insurance can also encourage companies to think more long term and increase their risk tolerance. A lot of investments in new production facilities and newly founded companies would never happen if every company was required to have the necessary financial means to make good every conceivable loss. While arguable, it is no exaggeration that the availability of insurance is sometimes being heralded as a......

Words: 2519 - Pages: 11

Insurance

...1st Prize Winner – Shri Devaraj Belke Mahadeva, NIA, Pune INCREASING INSURANCE PENETRATION IN INDIA Insurance as an industry has secured a vital position in the development of the nation’s economy. An efficient insurance market is essential to achieve integration into the global economy and sustainable strong economic growth. In conjunction with the forces of global consolidation, current advances in information technology and the potential of e-business mark the beginning of a veritable efficiency revolution in the insurance industry. One of insurance's key roles is safeguarding the financial health of small and medium-sized enterprises. In addition to the protection provided by social security systems, insurance cover is crucial for people to insure themselves against inability to work, set aside money for retirement or protect themselves against the loss of their assets. Insurance reduces the investment risk faced by companies and the state. Many companies find it far more expensive, if not impossible, to take out a loan without purchasing the requisite insurance protection. Insured, thereby reduces the costs of raising the capital they need. By reducing investment risk, insurance can also encourage companies to think more long term and increase their risk tolerance. A lot of investments in new production facilities and newly founded companies would never happen if every company was required to have the necessary financial means to make good every conceivable loss. While......

Words: 2533 - Pages: 11

Insurance

...will provide the health insurance planning overview, general information regarding the organization, the existing group health insurance plan which provided by the employer (LHDNM), background of study, the problem statement, research objective, research question, hypothesis, and scope of study, limitation of study, significance of study and definition of terms. Firstly, the title of the research is “The Study on the Factors Influencing The Purchasing Behavior of Personal Health Insurance among The Inland Revenue Board of Malaysia‟s (LHDNM) Staff”. There are general overviews of the personal health insurance planning and the background of the organization. After that the researcher will discuss about the background of study, problem statement, research objective and research questions. Besides, the researcher will state hypothesis of the relationship between three independent variables. Then the researcher will attach the scope of study and limitation of study. The next part is the significant of the study and definition of term. 1 1.1 About health insurance planning Health insurance, like other forms of insurance, is a form of collectivism by means of which people collectively pool their risk, in this case the risk of incurring medical expenses. The collective is usually publicly owned or else is organized on a non-profit basis for the members of the pool, though in some countries health insurance pools may also be......

Words: 9777 - Pages: 40

Healthcare Insurance

...Some say the right to healthcare is the right to life. However, people should pay for their own healthcare, not have it given to them by the government. Under a universal healthcare system, the right to healthcare is paid for through taxes, and people who work hard and pay those taxes are forced to subsidize healthcare for those who are not employed. In the United States, people already have a right to purchase healthcare, but they should never have a right to receive healthcare free of charge. Healthcare is a service that should be paid for, not a right. In European countries with a universal right to healthcare, the cost of coverage is paid through higher taxes. In the United Kingdom and other European countries, payroll taxes average 37% - much higher than the 15.3% payroll taxes paid by the average US worker. According to research, financing a universal right to healthcare in the United States would cause payroll taxes to double. In addition, a right to healthcare could increase the US debt and deficit. Spending on Medicare, Medicaid, and the Children's Health Insurance Program, all government programs that provide a right to healthcare for certain segments of the population, totaled less than 10% of the federal budget in 1985, but by 2012 these programs took up 21% of the federal budget. Studies have concluded that the expansion of insurance coverage under universal right to healthcare will increase the federal deficit by $340-$700 billion in the first 10 years, and......

Words: 695 - Pages: 3

Insurance

...The Indian insurance industry has undergone transformational changes since 2000 when the industry was liberalised. With a one-player market to 24 in 13 years, the industry has witnessed phases of rapid growth along with extent of growth moderation and intensifying competition. There have also been a number of product and operational innovations necessitated by consumer need and increased competition among the players. Changes in the regulatory environment also had a path-breaking impact on the development of the industry. While the insurance industry still struggles to move out of the shadows cast by the challenges posed by economic uncertainties of the last few years, the strong fundamentals of the industry augur well for a roadmap to be drawn for sustainable long-term growth. The decade 2001-10 was characterised by a period of high growth (compound annual growth rate of 31 percent in new business premium) and a flat growth (CAGR of around two percent in new business premium between 2010-12), according to KPMG. There was exponential growth in the first decade of insurance industry liberalization. Backed by innovative products and aggressive expansion of distribution, the life insurance industry grew at jet speed. However, this frenzied growth also brought in its wake issues related to product design, market conduct, complaints of management and the necessity to make course correction for the long term health of the industry. Regulatory changes were introduced during the past...

Words: 5590 - Pages: 23

Insurance

...1st Prize Winner – Shri Devaraj Belke Mahadeva, NIA, Pune Taken from IRDA INCREASING INSURANCE PENETRATION IN INDIA Insurance as an industry has secured a vital position in the development of the nation’s economy. An efficient insurance market is essential to achieve integration into the global economy and sustainable strong economic growth. In conjunction with the forces of global consolidation, current advances in information technology and the potential of e-business mark the beginning of a veritable efficiency revolution in the insurance industry. One of insurance's key roles is safeguarding the financial health of small and medium-sized enterprises. In addition to the protection provided by social security systems, insurance cover is crucial for people to insure themselves against inability to work, set aside money for retirement or protect themselves against the loss of their assets. Insurance reduces the investment risk faced by companies and the state. Many companies find it far more expensive, if not impossible, to take out a loan without purchasing the requisite insurance protection. Insured, thereby reduces the costs of raising the capital they need. By reducing investment risk, insurance can also encourage companies to think more long term and increase their risk tolerance. A lot of investments in new production facilities and newly founded companies would never happen if every company was required to have the necessary financial means to make......

Words: 2536 - Pages: 11

Insurance

...1st Prize Winner – Shri Devaraj Belke Mahadeva, NIA, Pune INCREASING INSURANCE PENETRATION IN INDIA Insurance as an industry has secured a vital position in the development of the nation’s economy. An efficient insurance market is essential to achieve integration into the global economy and sustainable strong economic growth. In conjunction with the forces of global consolidation, current advances in information technology and the potential of e-business mark the beginning of a veritable efficiency revolution in the insurance industry. One of insurance's key roles is safeguarding the financial health of small and medium-sized enterprises. In addition to the protection provided by social security systems, insurance cover is crucial for people to insure themselves against inability to work, set aside money for retirement or protect themselves against the loss of their assets. Insurance reduces the investment risk faced by companies and the state. Many companies find it far more expensive, if not impossible, to take out a loan without purchasing the requisite insurance protection. Insured, thereby reduces the costs of raising the capital they need. By reducing investment risk, insurance can also encourage companies to think more long term and increase their risk tolerance. A lot of investments in new production facilities and newly founded companies would never happen if every company was required to have the necessary financial means to make good every conceivable loss. While......

Words: 2533 - Pages: 11