Health Insurance: Risk Pooling & Financing Structure - Essay Sample

Introduction

Health insurance is defined as an insurance cover which covers a part or the whole risk of an individual who incurs medical expenses, thereby spreading the risk to a large number of persons. The insurer develops a routine finance structure by estimating the full risk of health system and health care expenses across the risk pool such as a monthly payroll or premium tax to offer the amount payable for the health care benefits according to the insurance agreement. A central organization that is mostly the government, a non-profit entity, or even a private business helps in administering the benefit. The Health Insurance Association of America defines health insurance as coverage which provides or enables the payments of benefits that results from either injury or sickness. This includes insurance for losses resulting from disability, accident, accidental death, medical expense as well as dismemberment. Health insurance is divided into inclusions, exclusions as well as restrictions. This paper will try to explain more of the health insurance restrictions and the effects of the limits in the modern world.

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Health insurance inclusions are those services or procedures which are covered by the health insurance policy that an individual chooses. This means that once the individual claims on these items, he/she receives the benefits as their policy states. The health fund pays in part or in full for these services depending on the level of cover that is provided by the policy, the insurer choice as well as the excess amount that an individual pays per claim.

Some of the standard insurance inclusions for a hospital cover may include theatre fees, in-hospital medical treatment, hospital accommodation, some pharmaceutical medicines as well as the emergency ambulance fees. Health insurance exclusions, on the other hand, means that an individual is not going to be covered for any medical or hospital expenditure that is related to the condition at hand. , therefore, the responsibility or duty of the patient to ensure that he/she is treated through the Medicare system once they discover that the treatment required is excluded from the insurance cover.

Once he/she is not treated through the Medicare system, the patient is then forced to cater to the medical expenses by using money from their own pockets. An excellent example of health insurance exclusion is when the policy that one has excludes cardiac services. Once this individual visits' a hospital to receive cardiac surgery as a private patient, the health fund of the individual does not cover any medical costs or any other hospital benefits to the individual (Buchmueller et al. 2016). Health services in which an individual is covered partially are known as restricted health insurance benefits meaning that the cover by the insurance is limited.

Restricted benefits are not usually enough to be able to cover a private hospital admission full costs meaning that the patient or the individual covered by the insurance benefit will need to pay the difference cost. One main disadvantage of restricted interests is that it does not fully cover private hospital admission costs. An example is that when an individual goes for a knee replacement in a private hospital, and this is the individuals restricted benefits. Here the individual's health fund will only pay a portion of the total costs of hospital accommodation and will not pay for the theatre fees, which may leave the individual with out-of-pocket, which are expensive.

Across the health funds, health insurance policies vary significantly in that some systems may have exclusions or restrictions while others could be having exclusions and restrictions on treatment services. Some of the services excluded or restricted may include knee and hip replacements, plastic surgery, birth-related and pregnancy issues, eye, and cataract surgery, cardiac related or even cardiac services which may consist of heart investigations or surgery as well as rehabilitation and psychiatric services.

Healthcare restrictions is a severe problem in the modern world since it denies some individuals the benefits of full medical expense cover, which might be too expensive and high for them. The leading cause of these health restrictions are the strict state regulations on health insurance. Some states usually require insurance plans to provide specific health benefits types and to be able to cover certain types of healthcare providers. There are those state regulations which affects the insurance plans' ability to exclude individuals from coverage or affects the rating rules for insurance.

Other regulations limit insurance companies' ability to have a selection of healthcare providers. The main aim of such rules is to control the increasing costs of health care or even expanding the health coverage availability specifically for high-risk individuals. Generally, health care costs are usually prohibitive and the states which are made as a representation of all people in a country, in playing their role, they have to ensure that every citizen in the country benefits from all the services in the system hence they make laws and rules which may restrict some of the health benefits of some individuals which are much expensive and risky in order to cover for others who are much in need of health cover at lower costs but for many individuals (Camenzind et al. 2015). To achieve such goals invariably there is a need for trade-offs which policymakers rarely considers to make such trade-off explicit.

An example is that the rating rules which allows sicker, high-risk or even older employees to get low-cost health insurance without any restrictions and exclusions for medical conditions can lead health insurance to become affordable for such employees - on the other hand, making healthier and younger employees to pay high higher insurance costs than those available in the market. These may lead to younger individuals not participating in the health insurance market, which may lead to increased pressure on the insurance costs for those who remain in the market. This indicates an increase in the problems in the market, and hence, restrictions in health insurance may create other issues in the process.

The impact of such restrictions vary depending on the specific regulations by different states since in some countries you may find that the laws do not allow individuals to buy the low-cost plans which would offer only catastrophic coverage while in others the insurance rules and the benefit mandates may raise premiums which may reach to the point that makes the insurance prohibitively expensive for most individuals. There has been of late little analytic attention on the state-level health insurance regulations from both the broader health policy and the academic community.

The health care insurance restrictions may also include increased cost of the insurance premiums by the insurance companies. By expanding these insurance costs, these companies restrict most individuals in any state making them not enroll for such services which by the end makes the life of such individuals much difficult since when they get sick later on and do not have enough savings to cater for the medical expenses they end up suffering and even dying. By this, the states fail their citizens since no citizen is supposed to suffer due to the inability to afford for the services offered at any given nation.

These restrictions mostly affect low-income earners mainly because they may not be able to afford the medical expenses once they are not insured and also may not be able to pay high insurance costs. Health care insurance covers that pay all the medical fees for such individuals may be too expensive, and hence, they may tend to go for those premiums that they can afford to pay periodically. The fact that they have other options to go for cheap premiums is a right approach by the insurance companies in an aim to consider even the low-income earners but the problem is that when these individuals require expensive and high risk treatments such as heart surgery, the insurance does not cover any of these expenses which may be a heavy burden for a low-income earner.

In this context, the state, as well as the insurance companies, will then require to come into negotiations on how they would either remove these restrictions or create a strategy whereby the restrictions are reduced. Health care insurance coverage is one of the best strategies that most states and governments consider for the improvement of the health state of the citizens in a given nation which has resulted from the medical revolution since the olden days. As the technological advancements occur in the health sector, the costs of health also increase and therefore it's essential that the states and governments should come up with policies that would favor every individual in any given nation (Glied & Jackson, 2017). There should be policies which allow health insurance coverage for all citizens who pay tax.

By charging a specific minimum amount based on the incomes of individuals, they should be able to receive medical cover in both the public and private hospitals in the country or residence. Hence every government should encourage all its citizens to ensure that they have paid a specific amount to the insurance companies to receive the full medical cover and these means that even the private insurance companies will need to collaborate with the government in the whole process of making the policies. For those requiring services such as plastic surgery and other surgical operations, the insurance companies should ensure that they cover for a fixed set amount of medical expenses leaving the clients or insured with a fair amount payable for the services.

References

Buchmueller, T. C., Levinson, Z. M., Levy, H. G., & Wolfe, B. L. (2016). Effect of the Affordable Care Act on racial and ethnic disparities in health insurance coverage. American journal of public health, 106(8), 1416-1421. Retrieved from https://ajph.aphapublications.org/doi/abs/10.2105/AJPH.2016.303155

De, C. P., Camenzind, P., Sturny, I., Crivelli, L., Edwards-Garavoglia, S., Spranger, A., ... & Quentin, W. (2015). Switzerland: health system review. Health systems in transition, 17(4), 1-288. Retrieved from https://europepmc.org/abstract/med/26766626

Glied, S., & Jackson, A. (2017). The future of the Affordable Care Act and insurance coverage. American journal of public health, 107(4), 538-540. Retrieved from https://ajph.aphapublications.org/doi/full/10.2105/AJPH.2017.303665