The US Health Care System - Medicaid - Essay Example

The US Health Care System Wide variety of risks face different people and an organizations at the end of every year. However, only the insured risk can be compensated. Insurance policy only provides a system of compensation to the people and organizations who suffer a loss. Insurance companies are businesses and therefore they charge for their services. The contract between the insurance company and the insured is known as a policy. The purpose of any insurance policy is to indemnify the insured for the insured loss that have occurred (Forgione and Pamela 27). In order for insurance companies to be able to offer to indemnify the insured, there is need to pool the risks in order to be able to fund the loss. Moreover, it can be described as a method by which insurance companies control the risk of insuring against disastrous events through extending insurance to individuals and businesses and creating sizable claims. For the risk pool to be broad and balanced, various measures have to be taken. The insurance company can decide to create various risks pools, which will aim at bringing insured people together. For instance, the insurance company can decide to create health insurance policies and classify them in different categories, such as life insurance policy, general health policy that would aim at indemnifying insured people if they get medical treatment for a specified ailment (Guo 236). Moreover, the company can decide to create auto pool risks. This type of insurance would aim at indemnifying the insured person if the car they are driving records an accident or a traffic rule violation. However, in this form of insurance, the state department of insurance sets rate, which differ depending with the age, location and driving record of the individual. Moreover, the insurance company can create and insurance policy that can cover real estate owners if a catastrophe such as fire occurs. This various and different types of insurance policies would create a large pool of risk for the insurance companies and therefore find it easy to compensate for a loss if a disaster strikes. The individual mandate in type of insurance policies will ensure that the risk is spread and shared between them (Odier 279). While offering insurance policies, different individuals and organizations are open to insure themselves with these companies. However, insurance companies want the states to be passive purchasers of the insurance policies. This is because the states tend to dictate the amount of insurance premiums that they are willing to pay to the insurance companies, which may not be according to the will of the company. Such insurance premiums paid by the state are usually very little and may end up making a loss to the company. For instance, state insurance policies are highly purchased by different individuals as well as organizations since they charge a low amount of premium. One of the main policies by the states is health insurance policy (Parry 17). For instance, the South Dakota health insurance policy requires the individual to have a continuous credibility of at least 18 months. This insurance policy is a deep contrast with the insurance company’s requirements, which tend to create a rift between the company and the state. In another example of auto insurance policies, the government sets the rates, which should be implemented by the insurance companies. These insurance policies vary depending with the age, location, and the driving record of the individual where the insurance companies tend to pay more if the risk occurs. As an insurer, we are not happy since we would like to pay less and set our own requirements for the policies. Insurers really want to participate in health insurance exchange. This is a set of state governed and regulated health insurance schemes in the United States Government where individuals purchase health insurances, which are eligible for government subsidies. In this policy, all exchanges must be fully certified and operationalized by the government by the year 2014. The government or the quasi-government intended the policy to help insurers conform with consumer protection and to compete in cost-efficient ways. Moreover, this policy was to help expand the insurance coverage to include more people. This kind of insurance policy has attracted most of the insurers and they are very much happy with it. This is because the insurance policy will tend to put together the healthy and unhealthy people in one pool where they would draw their compensation funds. Moreover, the policy will tend to attract both the young and old people and put them together in one pool. The result of this to the insurers is that they will have a large source of funds where they would compensate their subscribers. The insurers will tend to benefit from this policy in that the healthy people will lean be more in number and their resources will be used to compensate the unhealthy people thus leading to increased profit for the company. In addition, a huge pool of funds will be created where the insurers can get funds to indemnify other parties who encounter an insured risk. Exchange also allows insurers to have flexibility in the way they conduct their businesses thus amounting to mere profit. In addition, exchange does not provide too much regulation for the insurers and provide flexibility around the provider’s network. Medicaid is a health care program by the United States, which is meant for certain group of people in the society. This program mostly targets the low-income earners who cannot afford a health care insurance with insurance companies. The program is means tested and jointly funded by the government of the federal United States as well as the state government. This program only offers its services to legal and permanent residents of the country. The program targets, low income earning adults, children and people with disabilities. Insurers should support the growth and development of Medicaid in the country. This is because this program will tend to eliminate a burden that the insurers would face (Pasdirtz 311). This would happen in that, as an insurer, the companies would be spending more funds in indemnifying the group targeted by the Medicaid program. For instance, the aged people have a poor health record that means that the companies would be compensating them regularly as compared to the health middle-aged group. Moreover, people with disability would also require regular compensation as that of the elderly. Works Cited Forgione, Dana A., and Pamela C. Smith. "Medical Tourism and its Impact on the US Health Care System." Journal of health care finance 34.1 (2007): 27-35. ABI/INFORM Complete. Web. 9 Nov. 2012. Guo, Kristina L. "Quality of Health Care in the US Managed Care System." International journal of health care quality assurance 21.3 (2008): 236-48. ABI/INFORM Complete. Web. 9 Nov. 2012. Odier, Nicolas. "The US Health-Care System: A Proposal for Reform." Journal of Medical Marketing 10.4 (2010): 279-304. ABI/INFORM Complete. Web. 9 Nov. 2012. Parry, Michael J. "US National Health Care System Cost Control Contest - the Winning Entry." Cost Engineering 36.11 (1994): 17-36. ABI/INFORM Complete. Web. 9 Nov. 2012. Pasdirtz, George. "Controlling the US Health Care System with Policy Wedges." Health care management science 10.4 (2007): 311-29. ABI/INFORM Complete. Web. 9 Nov. 2012. Read More