Health Insurance Essay

894 Words4 Pages
1. What’s meant by financing? What are its desirable and undesirable effects? Financing refers to any mechanism that gives people the ability to pay for health care services. For most people, financing is necessary to access health care. The complexity of financing is one of the primary characteristics of medical care delivery in the United States. The desirable and undesirable effects are; 1) Financing of private and public health insurance enables access to health care. 2) Payment to providers. 3) Moral hazard. 4) Provider-induced demand 5) Technology and services with liberal reimbursement proliferate 6) Total health care expenditures are greater than if the same services were to be paid by the patients. 2. Briefly explain how insurance functions in relation to risk for individuals and groups. 1) Risk is unpredictable for the individual insured. 2) Risk can be predicted with a reasonable degree of accuracy for a group or a population. 3) Insurance provides a mechanism for transferring or shifting risk from the individual to the group through the pooling of resources. 4) Actual losses are shared on some equitable basis by all members of the insured group. 3. Discuss how cost sharing applies to health insurance The purpose of cost sharing is to reduce the misuse of insurance benefits. The main types of cost sharing are utilized in private health insurance: 1) Premium cost sharing in employer-sponsored health insurance, the employee is generally required to share in the total cost of the premium. 2) Deductible which is the amount the insured must first pay before any benefits by the plan are payable. 3) Copayment the amount that the insured has to pay out of pocket each time health services are received after the deductible amount has been paid. 4. Why are managed care plans regarded as health insurance? How do managed care plans differ

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