Health Care Coverage and Insurance

Introduction

The issues of health care coverage and insurance are significant ones to be discussed from the point of the modern tendencies in the development of the health care industry. Nowadays, health care organizations which can be defined as health maintenance organizations (HMO) should be discussed as large businesses for which the cost-benefit analysis is the part of daily operations to conclude about selecting this or that client (Feldstein, 2011, p. 112; Getzen & Moore, 2007). The Castor Collins Health Plans is an HMO that was founded in 1999. The company proposes three plans to provide the necessary health care coverage for potential clients which are Castor Standard, Castor Enhanced, and Castor Enhanced Minor. Two companies, ConstructIt and E-Editors, are oriented to becoming the clients of the Castor Company, but focusing on the potential revenues and risks, it is possible to select ConstructIt as the company’s client because the provision of services for ConstructIt contributes to such conditions as the maximization of revenues and minimization of risks.

The Profile of ConstructIt

Even though ConstructIt and E-Editors are the companies where the employer’s insurance is not provided, thus, the conditions are similar, it is reasonable to select ConstructIt for working with because of the aspects of the company’s profile and analysis of the potential risks and benefits. ConstructIt is a company which has 1,000 employees where 550 persons are male employees and 450 are female ones. The employees belong to the age group of 26-42. It is also important to note that 60% of the employees are married. 32% of the employees are focused on great physical activities, 25% of the employees are characterized with references to the moderate physical activity, and 43% follow the sedentary lifestyle and positions. 38% of the employees have no major health risks, but 18% of the employees are smokers (Simulation Activity, 2013).

39% of the employees suffer from obesity which is why the risk of obesity-related diseases increases. Thus, 19.6% of the group is affected by high cholesterol, and 19.3% of the group is affected by high blood pressure (Simulation Activity, 2013). These numbers should be discussed while analyzing the potential areas of high utilization related to the risks of diabetes or cardiovascular diseases. It is also important to note that ConstructIt is willing to pay $4,000 per person while focusing on individual insurance patterns (Simulation Activity, 2013).

Analysis of Potential Utilization: Reasons Why Plans Can Be Selected

To provide the rational decision about the selection of this or that plan for ConstructIt, it is necessary to present the reasons for focusing on Castor Standard, Castor Enhanced, and Castor Enhanced Minor. It is important to note that Castor Standard guarantees the optimal revenues for the services provided because of the balance between premiums provided and payments received. Furthermore, this plan is a standard, and the provided coverage can fit many clients as the traditional ones, and the risks associated with the pre-existing conditions are minimized because of not providing these services. Castor Enhanced is good because guaranteeing the highest revenues and covering pre-existing conditions important for many companies. Castor Enhanced Minor is good because of modifying Castor Enhanced to become more interesting for customers as it is possible to cover the pre-existing conditions but limit the whole number of services. The comparably high revenues are preserved (Simulation Activity, 2013).

Reasons for Selecting Castor Enhanced Minor for ConstructIt

To respond to the employees’ demands, to minimize risks, and to guarantee the high revenues, it is appropriate to select the Castor Enhanced Minor plan for ConstructIt employees because following the data on this group of persons’ current health status, it is possible to predict the ways to decrease the utilization costs. Even though this plan is oriented to providing coverage for pre-existing conditions, and employees can pay only $4,000 annually in comparison with $4,500 offered by E-Editors, there are many reasons to support the idea of the Castor Enhanced Minor plan’s relevance.

Thus, the current relatively high health status of the company’s employees can support the idea that the potential utilization risks are minimal. From this point, it is possible to minimize any associated risks and receive the revenues associated with the whole premium that the employees are willing to pay. On the contrary, a lot of risks associated with the health of the employees in E-Editors cannot guarantee the revenues associated with the high premiums. In this case, the maximization of the profits can be achieved with the help of limiting the services provided for the company’s employees. Minimal risks of alcohol dependence (in comparison with E-Editors group) support the idea that it is possible to exclude inpatient/outpatient detoxification from the list of services. Furthermore, it is possible to exclude inpatient mental health care because the risk of depression is not stated. As a result, the employees can receive the necessary insurance, fitting their needs, and the Castor Company can receive the guaranteed revenues with minimal risks.

Reasons Why Not to Select the Other Plans Offered

It is possible to select the traditional Castor Standard for ConstructIt, but the Castor Company becomes deprived of the opportunity to maximize the revenues because of focusing on minimizing risks. Castor Enhanced is also not appropriate for covering the needs of the employees in ConstructIt because of focusing on covering the pre-existing needs and proposing high prices for services. As a result, many of the proposed services are not necessary for ConstructIt’s employees, and these employees are limited in the premiums provided. Thus, the employees can find it irrational to pay for services that are not necessary for them because of their health status. However, the situation related to Castor Enhanced Minor is different because the employees receive the opportunity to have the high-quality services which are necessary for them, and they can be discussed as ready to pay for the services determined according to their demands individually.

Conclusion

Although the decision to select Castor Enhanced Minor for covering the health care of the ConstructIt’s employees can seem to be irrational because of the plan’s development for covering pre-existing conditions, this decision is based on the proper comparison of all three variants. From this point, Castor Standard is good to minimize any risks for the company, but it cannot provide the necessary conditions for maximizing profits. On the contrary, Castor Enhanced is not correlated with the employees’ needs, and this group of people is not ready to pay high costs. As a result, Castor Enhanced Minor can be discussed as a plan which conditions can contribute to minimizing risks and maximizing profits for the employees and the Castor Company.

References

Feldstein, P. (2011). Health care economics. USA: Cengage Learning.

Getzen, T., & Moore, J. (2007). Health care economics: Principles and tools for the health care industry. USA: John Wiley & Sons, Inc.

Simulation Activity: Understanding economic issues for HMOs. (2013). Web.

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