Cost Sharing Essay

The cost of health insurance has changed drastically over the years as it has become more expensive. Depending on personal characteristic, the cost of health insurance may vary. For instance, as individuals grow older the more expensive it becomes. In this case, health insurance is more costly because “older individuals require more health care” therefore “the cost of providing health care is rising” (Madura &Atlantic, 2012). Not only does this affect the high cost of health insurance, but the number of individuals uninsured. As stated by Madura and Atlantic (2012), “about one in every five workers is uninsured” and has increased since then because health insurance has become unaffordable. As a result, individuals tend to seek health care elsewhere as they can no longer

Rising health insurance premiums have made healthcare unaffordable in the United States. Health insurance premiums in this country have undergone a steady rise over the past few years while incomes have remained the same. More than 50% of individuals with low incomes holding private insurance in the United States are unable to afford their healthcare costs (Collins, Gunja, Doty & Buetel, 2015). In addition, costs related to healthcare are equally unaffordable to 25% of working-age individuals who hold private health insurance policies (Collins et al., 2015). According to the Kaiser Family Foundation/Health Research and Educational Trust (Kaiser/HRET) survey on employer health benefits, employer-sponsored health insurance plans have also had moderate rises in premiums in 2013 for both individuals and family coverage (Claxton et al., 2013). While

Another type of managed care program that was introduced is the Preferred Provider Organization (PPO). A PPO is comprised of a group of physicians, hospitals and other medical service providers who contract with employers, insurance companies or other plan sponsors. The PPO offers discounted pricing to these contracted organizations due to the high volume of business received. PPO’s typically have up-front cost sharing in the form of deductibles and/or co-insurance, which vary depending upon the actual plan chosen.

In 1954, Congress passed legislation allowing employers to provide health insurance benefits to employees on a tax-free basis (Sih and Singh 99). This legal provision marked the beginning of the rapidly expanding health care costs still apparent today due to the major incentives provided by the government to obtain employer-based health coverage. The overwhelming popularity of employer-based health insurance has led to a serious market inefficiency resulting from the system of third-party payment. As individuals rely on their insurance companies to pay for their medical expenses, this provides

Employers are continuing to face rising health benefit costs and are constantly looking for alternatives to control these escalating costs. Health benefit premiums continue to increase at a double digit pace for employers and employees (Poor, Ross & Tollen, 2004). This escalation is putting environmental pressures on all impacted stakeholders. Companies and insurance providers are squeezing this industry to get a handle on cost while still providing an appropriate level of care. This cycle puts the patient front and center as the ultimate stakeholder who incurs changes in health benefits. This mandate of cost control, efficient operations and market share has facilitated a constant analysis of the dynamic health

Co-pay up to 10% for people 70 years or older and low income (if qualified).

Another downside to High Deductible Health Plan (HDHP) is the apprehensiveness to use the insurance, even the benefits that are free or at a low cost. “Enrollees in high-deductible health plans are likely to reduce the preventive care use and are largely; because they are unaware of the fact that preventive care benefits are free or at a low cost (Dolan February 2016).” Recent analysis showed that low-income workers were more likely than higher earners to avoid certain kinds of care when they were enrolled in high-deductible plans coupled with savings accounts. The analysis from the Employee Benefit Research Institute, found that low-income people even skipped free preventive services like flu shots and cut back on doctors’ visits. Primary and preventive

For those Americans not covered or find their work coverage too expensive, there is a new way for them to buy insurance on their own called Health Insurance Marketplaces. Some states have named these marketplaces something else. The Health Insurance Marketplace is like a virtual insurance megamall where private insurers compete for American’s business. Americans can pick out how much coverage they want, how much they want to pay for it, from cheaper high deductible plans to more expensive plans. Regardless what plan is chosen, all plans will cover a complete set of services like hospital visits, doctor visits,

Most working class Americans get healthcare insurance through their employer and or purchase their coverage through a private insurance. What most of us don’t know is how the premiums we pay for our coverage are calculated. Cost of premiums area a direct reflection of the costs associated with our consumption of medical services. Cost of medical services includes doctor visits, hospital stays, and medical devices as our consumption of these services increase premiums also increase. (“America’s Health Insurance Plans - Premiums 101 – How Are Health Insurance Premiums Determined?,” n.d.)

The World War 2 era of wage freezes eventually allowed tax-free fringe benefits such as health insurance. Thus, companies were encouraged through tax benefits to provide their employees with health insurance, resulting in many workers today receiving health insurance from their employers. However, economists believe this policy benefits the rich and drives up healthcare costs. By examining the healthcare system and its costs, economists observed that healthcare took up a larger chunk of the US economy than that of other developed nations. Consequently, the implementation of the Cadillac tax on overly generous health plans was meant to keep healthcare costs under control by discouraging nonessential care and encourage preventative care.

Insurance with HMO patient may pay a copayment of $15.00 compared to a patient who has PPO may pay $25 copayment for the same services.

Even though the excise tax does not take effect for another four years, according to Appleby (2009) the Cadillac tax “Could hit up to 19 percent of medical packages offered by employers in 2013” (p. 1). In fact, many employers have already begun taking action and started to scale back their health care coverage offerings and while other companies are increasing workers’ deductibles and copays to both prepare for and avoid paying the Cadillac tax (MDeverywhere, 2015). Additionally, for those consumers who suffer from

Many employees must designate a health plan through their employer. These days, as HMOs (health maintenance organizations) and managed care plans continue to proliferate, that means a choice between bad and worse. As employees line up in the lunch-room for a process called open enrollment, they may be surprised to learn that managed care rates have gone up — again. The mirage that managed care is cheaper care is finally fading. And, for the first time in years, employees may also have the promise of free choice in medicine in the form of a new method of financing health care. Consumers are already aware of horror stories involving HMOs, but cheap rates persuaded many that managed care is less expensive. Recent

There is no denying the fact that the cost of health care in the United States has been on a constant rise than the wage of the employees that pay to have access to better healthcare. There is the general fear among these employees that if the rising cost of the health care is not brought under control, there will come a time, and some analyst think, the time is already here, when those employees will not be able to afford health care for themselves and their families. This fear of the unknown is particularly evident among those closer to retirement. Employers of labor have for quite sometimes now, been shifting the burden of the high cost of affordable health care to their employees, and that has significantly reduced employee standard of

According to the Kaiser Family Foundation, in 2016, half of all insurance policy-holders also faced a deductible of $1000 (the out of pocket amount people must pay before their insurance kicks in). And for those people enrolled in Affordable Care Act (ACA) Marketplaces the figure is even higher. a