Abstract This paper goes into great detail of describing the association of risks with insurance. We do not think that there could be risks associated with insurance but, there is. The next focus in the paper is to determine what types of ethical misconduct can be foreseen if the supply and demand of insurance was too much to handle. This paper gives opinion of whether or not a person’s income should be a consideration as to whether or not they should be insured.
Driving factors for the basis of a consumer seeking insurance and how it compares to the empirical measurements were discussed in detail as well as how to measure the demand for insurance. Lastly, the paper breaks down the lemons principle in terms of how it applies to health care and where we are today. Key words: insurance, health, supply, demand, insured What is insurance without risk? When we think of the term insurance the first though that comes to mind is something that we are given by our employers or others in the event that something should happen to us we are covered.
One can say that insurance for consumers is almost the same as the insurance we purchase for our cars. The insurance covers us for medical procedures that might have to be incurred at the time of an accident. The proper description of insurance is that of the providing by a company to the consumer in the return of a premium or co-pay (Folland, Goodman, Stano, 2013). Insurance now has become more important to have than ever with all of the recent changes to the health care laws and what they can and cannot provide the consumers.
Now, let’s look at the term risk and its meaning to us and how this all relates back to the thought of insurance. A risk to me is the taking of actions without knowing if there could be a possible adverse reaction to the action. Basically taking a risks means that you are open to the unknown possibilities that could occur that you don’t know will occur until after the action. The association with risks and insurance is the same as risk and a person’s life. The way I can best describe it is that insurance companies take great chances with each consumer that they choose to insure through their company.
There are some insurance agencies that do not require that the person have any medical exams before they are covered. There is no documentation that would state the said individual applying for the insurance should be approved as the result of a medical condition. There is also the main idea that the person they are insuring will go without injury or death before the end of such policy or however the terms have been discussed. Each and every day there are risks taken without knowing what can occur after action has been taken.
Now, taking risks can prove to be beneficial if the end result of taking the risks proves to be a positive one. Applying the Code of Ethics There is a code of ethics in every walk of life that we as people, consumers, and leaders are a part of. The most important field of work that this applies to is health care in which those that would like to practice health have to take an oath to not do any harm to the people but, care for them in the means in which they need to be cared for.
This code has been broken by others in the past for their own selfish reasons which has forced some changes in terms of how doctors can take care of their patients. The doctors rely on the consumers in order to be able to provide the services that they offer. We have just described the basics of supply and demand. The supply of a certain object or service depends on how many people require the service or product that is in question. The same formula applies to those that work in the health care field without sick patients there would be no need for the doctors.
We as consumers put our trust into the doctors that we actively seek health advice and service from. In the beginning ethics was not a concern until during the 1980’s and 1990’s a person broke their oath by trying to assist patients in something that was not discussed by their families or other doctors; which was to help patients to end their lives (Angela Stringfellow). The purpose of the doctor is to assist us the consumers in becoming more healthy when we are sick and offering any preventive measures that would assist us in maintaining our health.
The more demand for the health professionals and less supply could lead to some physicians cutting corners in terms of insurance. The insurance we receive will cover us in the incident that we are injured but, what if the patient dies and the office continues to file the claim of insurance? This has happened before in insurance agencies as well as charging patients more than what they came in for during their initial visit. For example, consumer goes to doctor for regular checkup but, they are processed for more on their paper work resulting in the doctor’s office receives more money than they should.
There are other ways the office can cut corners in order to bring in more revenue to them by lying and falsifying records or even selling products on the side. Does money matter? Those that are insured go through a process before they are covered by the insurer they are applying with. One, of the main questions that determines how you are covered is the value of your income. The amount of money the individual receives determines a lot of factors for the basis of becoming insured. For example, Medicaid is insurance that is provided for children, young adults, and the disabled.
The income of the person does play a factor in determining whether or not the consumer should be insured. Medicaid requires that you only make a minimum amount after deductions in order to qualify for their services. The income of the applicant should be taken into careful consideration that way there can be a determination made as to whether or not they can afford the service. A person who makes over five thousand a month with minimum bills should not be considered for Medicaid services if they already have enough income to provide their own insurance for them.
It might seem at times that the interviewers are asking too many personal questions about their living and earnings in order to be a potential candidate for insurance. If, there was not income consideration before giving the insurance then there could be some terrible consequences that come about. An individual might be put into the situation in which they are forced to pay for something that was already beyond their own means in the beginning. The co-pay or premium paid to the insurer is the result of knowing how much the consumer earns which will lead to how much the person can afford to pay for their services rendered.
Without the consideration of a person’s income then most of the consumers would be paying unaffordable costs out of pocket, there could even be an increase in the amount they are required to pay. The result would be devastating in which those that have little or no income would be considered financially stable as those that can afford to pay. Consumer Demand Consumer demand determines the supply of insurance that will be given as whole to the consumers. There are different reasons why we have to visit the doctor; some appointments are for mostly individuals while others are made for families.
There have been some recent changes in the way that people are viewing their health. There have been great discussions about certain diseases that have been plaguing lots of Americans; who have now begun to stand up against these diseases for the end result of living a better life. Some factors that make people require insurance is usually health and wellness, family issues, and preventive measures that help to assist those in taking care of themselves. Now, it has been noted that in times of climate change there are more visits to the doctor due to the fact of people have to let their body adjust to the changing temperatures outside.
The main factors besides health that determine the doctor that is visited are; price, location, and services provided by the stated physician. Different factors drive consumers to the doctor’s choose sometimes it is just how well the service was when they were in the facility. The empirical measurements of the demand for health care do not really do any justice at all to determine the actual demand. Yes, the price elasticity study could be used but, that is not the only reason why consumers choose the physicians that they do choose. If, determining the supply and demand for health care all aspects must be taken into consideration.
The facts have to line up with the numbers that are given to show how there is a relationship between this supply and demand. Those that are in management of health insurance facilities should analyze their own statistics; meaning try to determine their demand of insurance and what is supplied to the consumers that they take care of. How do you measure consumer demand? There are different factors that are included in determining the demand for health care; the main idea is to focus on how to actually have an accurate percentage of the analysis.
According to the National Bureau of Economic Research a model of managed competition was proposed in which the consumer choose the health plans that fit their budget. The only downside to this would be that each consumer would want high quality care at a low price. The thought of this would enforce providers to provide care based upon the critiques of the consumers and not the insurer themselves. The best way to measure the demand for insurance to me is to first start with your individual establishment. There should be a category breakdown of payment, location, gender etc.
things that people take into consideration before choosing a provider. Once, all of these have been taking into great consideration then the analysis can begin. The main point or big idea that is wanted to accomplish is to determine how many people require services and how many services are provided to people. As stated before there are a lot more variables that have to be taken into thought before coming out with the end result. There could be some sort of survey sent out to those that have recently acquired insurance in which a determination could be made based upon the responses of the people surveyed.
There are only a few reasons why people choose what they choose; it’s just like going to the grocery store. Each brand of product offers something different than the other, sometimes there might be a better monetary value given versus the one that is preferred. This rule can be applied to insurance consumers would prefer quality care at a low cost to them which is the basis for which some consumers choose their insurance. Determining the demand would take some thought and much detail to the little numbers that help add up to the total demands that which the insurer is seeking.
Lemons vs. Lemonade The term “lemon” has been detonated for the description of when a person purchases a car and the owner sells them something that they know is not in good standing. There goes the term buyers beware meaning that take heed to the seller because the product that is being purchased could prove to be the worst purchase of a lifetime. The same symbolism can be given to the situation of insurance and those that need to be insured. As stated by George Akerlof in his work this description would apply to health insurance.
His thoughts were that in the same way the person wants to purchase the car, but knows little about the car relates to the insured looking to the insurer for help with becoming insured through them The unknowing of the health of the insured could lead to the insurer charging them more money for coverage based on the idea that they know little of their health and could be ill. The way we look at health coverage now versus before contends us to be careful as to whom we choose to offer us our health care. A lot of the known procedures that have been covered by some of the insurance agencies have been taken away from the consumer.
When a person decides that he or she needs insurance for themselves or their family they look to the insurance agent to supply them to the best of their abilities. Even though there are new diseases and current ones have been making great impact on the health and well-being of Americans today. The lemon principle plays heavily with consumers choosing the health care provider they want today. The end result is that consumers do not want to be stuck with a health care provider that will not provide them with the services that they need.
There is great concern and debate over the way health care has become now, because a lot of Americans are now uninsured due to layoffs or not being able to afford such services. Final thoughts The health care age that we were once use to have disappeared to possibly open the door for better service. There are thousands of Americans that need to be insured right now, and they can’t due to certain circumstances on their end. The rate at which we are not the demand for health care has went up but, the supply has decreased due the restrictions that have been applied to the health care we were once use to.
The factoring of the income from the insured has determined whether or not some of the individuals that apply will be able to be covered by the insurance in which they are looking for. Overall the health care system that we have today is under great construction from which it once was. The leaders of our country and cities have to come together and determine the best possible way to determine how the consumers are in terms of needing insurance. The goal of the president is to make sure each man, woman, and child in the United States are covered by some sort of insurance.
The task that he has taken on is a great one based on the simple fact that a lot of those who want to be insured cannot because of high costing premiums and co-pays.
References Folland, S. , Goodman, A. , & Stano , M. (2013). The economics of health and health care (7th ed. ). Upper Saddle River, NJ: Prentice Hall. http://www. berkeley. edu/news/berkeleyan/2001/10/17_asyme. html http://www. ehow. com/about_4809691_ethics-health-care. html http://www. nber. org/reporter/summer06/buchmueller. html.