Self-pay insurance cover refers to a payment plan that enables people to pay directly for medical services and stop relying on third parties for sponsorship. The scheme is popular among people who are self-employed and think that they deserve better medical services (Topol, 2010). Self-pay health insurance cover is the most expensive scheme because individuals meet all the costs of their medical bills. Government health insurance is a plan created by the Affordable Care Act that enables patients to seek medical attention and benefits even if they have preexisting or chronic illnesses that are very expensive to insure.
Influence on the Cost of Health Care
Health insurance covers are essential in the United States and other countries because the wellbeing of citizens is of paramount importance. A sick nation cannot be productive, and this means that it will rely on assistance from other countries. The cost of health care insurance covers has never been static due to the following reasons. First, it is expensive to maintain a healthy nation, and thus America has to invest heavily in ensuring that medical supplies are adequate and affordable (Reid, 2010). Secondly, human life is not static and this means that the changes reflected in lifestyles demand an improvement of the existing medical facilities. Lastly, people are becoming health-conscious, and they require efficient services. The high demand for better health care services requires improved medical services and trained physicians.
Self-pay health insurance cover has had a significant impact on the economy of the United States. The scheme requires individuals to sponsor themselves and pay for their medical needs without the government’s assistance (Topol, 2010). The cost of health care in the United States in the 1950s was about $134 annually. It included the payments made by the government, organizations and individuals. During this time, the average earnings of a person was $1.98, and this means that the person had to work for almost 120 hours to cover this expense (Japsen, 2014). However, the total per capita health spending in this country in 2012 was $8.953, and this means that it had plummeted significantly. However, the average worker had to spend more than 58 days working to raise this money for the insurance cover. The statistics show that the time price for health care had increased significantly, and this means that people have to pay more than what they earn to get quality medical services. The worker-time-cost in the private sector is more lucrative than in the public, and this explains why most people opt to register for self-pay health care insurance covers.
Today, government health care insurance covers more people than it did in the 1980s. The Affordable Care Act of 2010 has increased the number of insured people by almost 40%. The inclusion of people suffering from pre-existing health conditions and chronic illnesses in the scheme has attracted an enormous population that had been ignored by the previous health insurance plans (Japsen, 2014). Today, Americans spend a lot of money on medical insurance covers than any other need. The government spends a lot of money in refurbishing and equipping health care facilities because of a reduction of expenses in other sectors. Americans fund the Government Health Care Insurance by 11 cents in every dollar used directly out-of-pocket to buy goods or services. It is easy to ignore this amount and think that it is insignificant. The reality becomes apparent after considering a report published by the Institute of Medicine that revealed that America lost about $765 billion in healthcare in 2009 due to unaccountable expenses, wasted resources and other scandals (Topol, 2010).
Health Maintenance Organization (HMO) was a scheme established for organizations to charge subscriber fees and allow members to get medical services from physicians (Reid, 2010). The federal government marketed and funded these organizations to manage the rising health care costs. Therefore, the organizations play important roles in financing and delivering health care for members. Most self-pay beneficiaries prefer seeking medical services from these organizations because they believe that they have qualified physicians (Japsen, 2014). These organizations helped the United States to reduce its expenses on health care.
Preferred Provider Organizations (PPO) was established for individuals that wanted their health insurance covers to meet the costs of their treatment when they fall sick. The beneficiaries paid the first amount in full until an agreed allowance is exhausted. In addition, the subsequent costs are shared between the patient and insurance company at a 20% and 80% rate (Reid, 2010). The extra charges accrued after these payments were written off as discounts. This scheme increased the per capita income for individuals because they had to work hard to meet the first cost of their medical bills. On the other hand, it reduced government expenses in health care because patients and insurance firms covered most of it.
The Point of Service plan (POS) combines the features of PPO and HMO. Beneficiaries of this plan cannot choose which system to use until they get to a point where the service is offered. The patient spends a lot of money in meeting medical bills if the health problem is far from the prescribed classification (Topol, 2010). Sometimes, the patient may pay more if the only option is an out of network physician. The use of referrals in this plan helps in reducing the cost of medical services. Therefore, the state may spend more or less money in this plan depending on the option taken by a patient.
Japsen, B. (2014). Inside Obamacare: The Fix for America’s Ailing Health Care System. New York: Forbes Media.
Reid, T.R. (2010). The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care. London: Penguin Books.
Topol, E. (2010). Landmark: The Inside Story of America’s New Health-Care Law-The Affordable Care Act-and What It Means for Us All. New York: Public Affairs.