Economics Final Project - Assignment Example

ECONOMICS FINAL PROJECT ECONOMICS FINAL PROJECT Introduction There are a number of reasons for which people would want to have health insurance coverage. Most commonly however, health insurance is used as an affordable payment model that seeks to ensure that people do not pay so much upfront money once they are taken ill (Chang et al., 2006). From a larger perspective, health insurance has been noted to be a modality for ensuring the delivery of quality service by service providers, as the premiums paid ensures that there will be a pre-determined investment for facilitating the running of healthcare (Henderson, 2012).

These needs notwithstanding, health insurance coverage has not reached levels most expected by stakeholders. A number of reasons could account for this. As a way of addressing the situation, a number of health insurance policies exist to ensure that people can have options that best apply to their needs so that they would select these. One of the options is the high-deductible health plan (HDHP).Modalities and Merits of HDHP to the InsurerThe best way to argue on whether or not HDHP will lead to improved coverage is to look at the modalities involved in this type of health insurance plan.

There are two broad modalities that can be identified in this context. In the first place, users selecting this option are required to pay much lower premiums than what may be called traditional health insurance plans (Yoo and Chen, 2009). The premium refers to that money that is paid upfront to the health insurance company on a monthly basis. This means that people opting for this would not be paying so much every month as compared to those selecting other traditional plans. On the other hand, these people are required to pay higher deductibles than in traditional health insurance plans (Henderson, 2012).

These deductibles are the amounts that are paid for an insurer’s own medical care before the health insurance company come in to pay anything for the insurer.From the explanation given about the rationale based on which the HDHP works, it would be noted that people who visit the doctor less often and do not accrue much cost from their visits with the doctor would have the benefit of this plan. Meanwhile, Chang et al. (2006) argued that the healthcare population of the country is made up of more of such people than those with catastrophic health conditions.

Should the greater percentage get the right counsel therefore, chances that a good number of the populace would opt for HDHP and thus increase the coverage with the system is high. With this said, it is also important to look at the issue of economic benefits of HDHP in terms of the financial cost that the insurance holder bare. In a separate study, Yoo and Chen (2009) found that there were more citizens whose major concern with healthcare insurance billing was the monthly premiums that they had to pay.

Because this is mandatory, the higher it is, the less likely that a lot of people can afford. HDHP therefore comes to solve this problem for people like this, who may also double with the confidence that they would not have much demanding health needs.Conclusion From this discussion, it can be concluded that the HDHP is a very helpful health insurance plan for improving coverage, as its modality of operation and direct benefits come to favor a greater number of the populace. Due to the rising cost of living, there is no denying the fact that people will continue to be particularly concerned with what they will be getting out of their health insurance bill before deciding to opt into one form of insurance plan or the other.

Where they have an option such as the HDHP that can guarantee some form of reduced upfront monthly premium therefore, they would want to have this option so that there can be enough money to be saved to cater for other socio-economic needs.ReferencesChang J. T., et al. (2006). Patients Global Ratings of Their Health Care Are Not Associated with the Technical Quality of Their Care, Ann Intern Med. 2;144(9):665–72.Henderson J. W. (2012). Health Economics and Policy, 5th Edition. New York: Thompson-Southwestern.Yoo H. and Chen C. (2009). Estimated Income Characteristics of HSA Accountholders in 2008.

America’s Health Insurance Plans, 4(2): 45-67