Consider how compensation for healthcare services shape delivery of care, and reflects policy and policy changes and write a paper that addresses the bullets below. Be sure to completely address each bullet point. There should be four (4) sections in your paper; one for each bullet below. Separate each section in your paper with a clear brief heading that allows your professor to know which bullet you are addressing in that section of your paper. Include a Conclusion section that summarizes all topics. This assignment will be at least 1250 words.
This week you will reflect upon accountability in healthcare finance to address the following:
- Discuss the history of private health insurance and manage care and how it involved into a healthcare industry?
- Identify the key federal laws that protect individuals who are enrolled in private insurance.
- Briefly discuss consumer-driven healthcare and the empowerment of the healthcare consumer.
- Explore the opportunities which have emerged for nurses within the private insurance market.
Assignment Expectations Length: 1250-1500 words in length Structure: Include a title page and reference page in APA format. These do not count towards the minimal word amount for this assignment. Your essay must include an introduction and a conclusion. References: Use the appropriate APA style in-text citations and references for all resources utilized to answer the questions. A minimum of two (2) scholarly sources are required for this assignment.
Private Health Insurance
Healthcare is an essential service that ensures the quality of life and wellbeing of the general human population by preventing, controlling, and managing adverse health conditions. For years, healthcare has been transformed from a privilege to a basic need, with every person entitled to healthy living and healthcare. The cost of healthcare and scarcity of healthcare providers have been the key factors hindering access to safe and quality healthcare. With these key challenges, the government and the private sector came up with different strategies for enhancing access to quality healthcare. One of the strategies is introducing healthcare insurance cover, which pays for the individuals or family’s health cost while the premium members contribute average amounts periodically or the government caters for the premiums. The paper discusses the emergence of private health insurance companies, managed care organizations, consumer-driven plans, consumer protection laws, and private insurance policies and the nursing opportunities that arise with the emergence of private health insurance plans.
History of Private Health Insurance
Health insurance plans are believed to have gradually crept into the healthcare system since the 1800s. Most railroad companies established that most of their staff were being faced with numerous health issues and thus built their hospitals and employed physicians to care for the sick or injured employees. In financing the care, the companies later engaged organized hospital organizations such as Missouri Pacific (1876) and Northern Pacific (1881), among others, to deliver care to the employees. In financing the plan, the companies made fixed and periodic payments, deducted from the employees’ pay. By 1930, other companies, apart from the railroad companies, joined the health coverage plan, deducting some amount from the employees’ pay to cater for their health and wellness. In 1930, over 540,000 employees in the mining and lumbering companies were covered under a similar private medical plan (Berchick et al., 2019). A group of teachers in Dallas also agreed to pay an insurance premium to the Baylor University Hospital to cater to the future medical needs of the member teachers of the organization. Through such plans, such a private organization such as the National Association of Blue Shield Plans grew into a vast private insurance company in the country. Gradually, private companies were included in the national plan for healthcare coverage.
Managed healthcare is an organized healthcare system aimed at reducing the cost of care, reducing or eliminating ineffective or unnecessary services while maintaining the quality of care (Mullner, 2019). Individual healthcare providers or facilities form the organizations. In the United States, managed care was conceived in the late 19th Century when physicians from different cities decided to offer prepaid healthcare services to union workers and members. The members of the program paid annual fees to the particular physicians for unlimited healthcare services. In the early 1900s, different companies and organizations such as railroad, lumber, and mining companies contracted special medical groups to offer essential prepaid healthcare services to the workers and staff of the company (Mullner, 2019). In the 1970s, the government officiated the managed care organizations for their contribution to healthcare in enhancing access and cost-effectiveness of care.
Consumers are the key purchasers of goods or services. In the healthcare system, the patients are the key consumers of the services, and thus the insurance companies target them for health coverage. This shows that, like any other commodity or service, the delivery of the insurance cover to the clients should be governed by key rules and policies that enhance the performance of the delivering organizations and protect the consumers from being exploited or underserved by the cover providers. One of the laws protecting healthcare consumers through private insurance companies is the federal law on annual out-of-pocket spending. The law protects the consumers by requiring the private health insurance companies to comply with the provided annual out-of-pocket spending limits. According to the law, the patient should not exceed $7,900 for the self-only coverage, while on other services, out-of-pocket spending should not exceed $15,800, and thus any extra expenditure should be covered by the insurance health companies (CRS, 2018). This is important in ensuring that the insurance companies maintain services low for increased access and affordability of quality services.
The law also prohibits lifetime and annual limits on the consumer’s essential health benefits. Annual and lifetime limits place a limit on the amount of spending a person can spend on the covered health benefits in a consumer’s entire period of insurance coverage or a year. The Affordable Care Act removed the limitations, permitting the limits on the services that are not considered essential health benefits. This Act provided unlimited access to essential health benefits without extra payments and halted by the insurance coverage providers. The minimum medical loss ratio is another law that protects health insurance consumers. The goal of the medical loss ratio standards is limiting the profits and the administrative costs of the private companies and thus increasing the benefits entitled to the consumer. The ACA requires 80 percent of the consumer’s premiums for clinical care and patient quality improvement activities, while the 20 percent is used for profits and administrative costs. This law protects the consumers from contributing more towards the healthcare cover but receiving small benefits due to the high appetite for profits by the insurance companies. More laws are protecting the consumers.