Healthcare insurance is a cover protecting a policy holder against the risk of acquiring any medical expenses. The health insurance is supposed to safeguard a policyholder against an event that is related to medicine. Such expenses are at the top costs for most people in many countries because medical costs are hard to foresee, and diseases and medical conditions vary from one case to another (Jacobs 36). As other sectors of the economy are experiencing deflation, the health sector, and especially the health insurance, has seen an increase in costs of diagnosis and treatment. In order to check on the rising cost of medical insurance, the insurance companies have been forced to raise the premiums to their customers in order to stay in business through the Co-payment program. The paper elaborates on the ways in which inflation has affected the Health sector especially the Medicine. Due to that, it talks about the introduction of Co-payment program that assist the hospitals to keep records and maintain their finances.
The Co-payment program is where the insurance company pays the hefty part of the patient’s costs while the customer pays the rest. According to Daniel Altman’s Economic View; Inflation Is Alive in One Area of Medicine appearing in the New York Times, the policy is intended to discourage policy holders from misuse of the service. Jacob and John (236) note that there are various forms of copayment and that it is not always unpopular with the individual consumer. However, the co-payment has increasingly become unpopular with the regulations that govern the health insurance sector (Altman 38).
Recently, the insurance companies raised their co-payment fee to reflect the current medical insurance costs (Kongstvedt, 18). The increase in co-payment cost has been long overdue. The impact of the cost sharing on the compliance which is on adherence to the refilling prescriptions for the preventive care drugs after examination of the impacts on the rising cost in sharing and the differing impact of the coinsurance systems and the co-payment (Zeber, 33). According to studies, the greater cost sharing results to the reduction of consumer spending and prescription drugs lower employer costs (Maynard, 83). The others argue that, the trend never undermines the overall health, for the patients face the rising cost that reduces the consumption of the nonessential medications unlike consumption of the vital and chronic care drugs. Nevertheless, the negative impacts of the cost sharing on non-compliance are larger in coinsurance regime, unlike co-payment system. The authors will hypothesize the impact and attribute to the greater uncertainty regarding out of pocket consumer costs for the consumers under coinsurance regime.
The insurance companies have been reluctant to increase the co-payment fee because it involves incurring extra costs: changing of fee plan, web materials among other costs (Altman 54). In The Truth about Rising Health Insurance Premiums, in The Foundry, Kathryn Nix concurs that insurance companies are not always enthusiastic to raise their premium. Some of the factors that affect the increase in health insurance fee are mostly out of the companies’ control (Nix 24). Legislations are some factors that contribute to inflation in the medical health. According to Nix (37), the requirement demanding an increment in the minimal coverage one person can purchase, led to a large group of people to give up health insurance. This group happens to be the youngsters and healthy citizens leaving the sick and the elderly as the majority of the insured. This large concentration of sick and elderly among its client forces an insurance company to increase premium to stay afloat (Nix 37).
Another reason the insurance companies may have delayed their premium increment is because of the “focal point” (Altman 46). The focal point is the setting of the price of a premium at a point of round figured number, which means that a price has lost unequal units. For example, it is easier for a customer for all parties to work with a figure of say, $20 rather than $14.65. The round figure is also beneficial to the doctors, the patience and the insurance company. Large insurance companies can especially find those loose units cumbersome and error-prone (Altman 26).
The health insurance has become expensive for many, increasing their risk of incurring large medical bills in case they get sick. Most people blame the insurance companies for rise without knowing the real drivers to this inflation. Insurance companies are as much affected by an increment in premium as are the policy holders. All factors should be considered before making legislation regarding the health insurance because it may end up affecting the entire cost-system.
According to the analysis, the increase is taking a heavy toll on the workers. In every 10% health insurance increase, the cost reduces and employment chances by 1.6 percent. Furthermore, it reduces more hours that is worked by one percent employers who responds to the rising costs in health care and converting the full-time jobs to part time ones and the same jobs do not include health benefits. For the workers who enjoy getting the health insurance and more often, the premium prices increased from their salary or wages.
To conclude, the co-system programs have assisted the poor since it was introduced. It serves the health facilities and the program has no human errors. Efficiency is also seen it the health facilities and eases and reduces delays in the hospitals. Distribution of drugs and reduced drug prices and reduction of medical care prices, this will enable the poor to get the required medical care in spite of their financial status.