How Heath Cost Impact Our Society - Essay Example

How Heath Cost Impact Our Society Introduction The health costs related to the cost of access to the healthcare insurance products for covering the healthcare needs of the people. The cost incurred for access of the healthcare services is the payment of the insurance premium on an annual basis. The insurance premium is paid by the individuals for themselves as well as their families. The corporate houses and the employers have included the health costs for providing healthcare insurance to their employees and their families. In such cases, the employers include the cost of health insurance in the compensation structure of the employees. The various forms of health care insurance plans are included under the categories of private and public health insurance in US. The health cost for private insurance is more than that of the public insurance costs. However, the private insurance has provided the members of the society with greater access and affordability to receive medical treatment at the time of emergency. The rise in the health costs of the society have significant impacts on the economy that could be understood with the review of the health insurance sector. Discussion The healthcare cost of the individuals and the families have been on the rise in the economies all over the globe. The employers have started to include the cost of health insurance in the compensation structure of the employees. This has increased the access and affordability of the family members of the employed individuals in receiving health treatments as compared to the families which are uninsured. The health care costs provide the people with the financial freedom to access the healthcare services at the cost of paying an insurance premium. The employers protect the employees and their families by including the insurance amount in the cost to company and providing them with the flexibility of receiving healthcare benefits in the time of need (Kongstvedt, 2012). However, there is a substantial segment of people in the communities which include the employed as well as the unemployed who are not covered under any health insurance. In some cases, the employers have not included the healthcare benefit in the compensation and remaining are not insured due to the rising cost of the healthcare coverage. It has been found that the average insurance premium for each family in US was $11500 in 2006 which increased by 60% in 2012. The increase in the health costs have been transferred by the employers to their employees over the years. On an average, the workers in US pay 27% of the total premium for covering their health insurance. A large section of the workers cannot afford to pay the insurance premium for covering the health costs. Looking at the trend of increasing awareness of the market towards corporate responsibilities, the employers have started to push back the rise of wages in order to incorporate the health costs of the employees. This has led to the deprivation of families either in terms of health coverage or reduction in the income level. The exposure to the lack of health coverage for not being able to pay health premiums have deteriorated the process of development of the families and their children. The children and the families have been exposed to the risk of health disorder. This has reduced the pace of developmentof the economy as there has been a decrease in the number of healthy individuals who has the ability to carry out activities in the process of economic growth (Conrad andLeiter, 2003). This leads to the slowdown of the economy in the wake of rising health costs in the society. On the other hand, the slowdown of increase in wages as compared to the consumer price index in the economy has led to the reduction in the available liquidity in the hands of the people. The tightening liquidity has influenced the level of demand and inflation in the economy. The decrease in demand in the economy would also influence the level of production in the economy. Thus the gross domestic production of goods and services in the geographical boundaries of the country has decreased. The rising health costs in the society, therefore, impacts the GDP level and the economy of the country. The legislation in the area of healthcare has impacted the quality of the healthcare services provided to the recipients. The legislation has also impacted the health-costs and the insurance coverage for the healthcare services.The legislations that have witnessed undesired outcomes in the area of healthcare are the Social Security Amendment Act of 1989 and 1993, the Balanced Budget Act of 1997, etc. In the context of the quality of healthcare services, the legislations were framed in order to provide flexibility to the healthcare recipients for receiving timely and high quality healthcare services from the providers at an affordable cost (Musgrave, 2006). The legislation aimed to provide access of healthcare services to the people of the community through the widely spread network of hospitals and nursing homes. The number of private hospitals increased and more numbers of patients were admitted by the hospitals for the purpose of treatment. The quality of health care services declined under the rise of inpatients in the hospitals and relatively lesser number of trained medical staffs to attend them. The healthcare legislations also aimed to provide financial stability to the people for being able to undertake medical treatments at the cost of affordable health premiums.However, the healthcare providers have viewed the healthcare benefits as money to be paid by the third parties and not by the patients and their parties. This has reduced the level of attention paid to the patients by the healthcare providers and the patients were started to be treated in a mechanical fashion. Thus cost of healthcare coverage also increased over the period of time as the healthcare service providers charged amounts for medical treatment from the nominated third parties. Thus the cost of insurance coverage increased that has slowed down the development of the economy, at large. The three main types of health insurance in the United States are the private health insurance, health insurance under Medicaid and Medicare. Medicare and Medicaid are the two plans that fall under the public health insurance plan. The private health care plans could be compared by the people who are looking to cover their health cost. The Affordable care Act now enables the US citizen to claim for health coverage by paying insurance premiums at affordable costs. The solvency of the private health insurance plans is quite high as it allows the health care recipients to access the medical services without paying huge medical bills at one time. The public healthcare service under Medicaid provides healthcare services to the low income group of people and the people with disabilities. The network of doctors, hospital and trained nurses cater to the health needs under this public healthcare scheme. The third healthcare plan under Medicare is provided to the people above 65 years of age. The network of healthcare services cater to the healthcare needs of these people. The solvency of the second and third plan under the public health insurance category are limited in comparison to the private health care plans as they are aimed at welfare of the state with no commercial motive. The private healthcare insurance plans have started to gain popularity among the US people as it covers a wide network of the private hospitals and the nursing homes that have come up in various parts of the country (Savage, 2009). The number of private health care providers are large in numbers as compared to the public organizations. Over a period of thirty years, the US economy is looking to expand on a large scale with higher volume of liquidity and increasing access of the private healthcare service to the families in US. The public healthcare services are likely to have a higher quality of healthcare services. However, the large network of private health care services are likely to have more longevity in providing healthcare treatment to the people of US at affordable health costs. The standard principle of insurance is aimed at covering the healthcare needs of the people of the country at the cost of payment of insurance premium on a periodic basis. This premium is fixed according to the limits set by the regulation in order to serve for the welfare of the state. The insurance industry has been privatized in order to spread the insurance services to the people in the economy with the added benefits of privatization that includes less amount of time for claim processing, lesser barriers for non-cash insurance claims, etc. However, the private insurance plans are not only aimed at the welfare of the people but also corresponds to commercial motives side by side. The private health insurance, therefore, charges a higher premium for the healthcare coverage as compared to the public health insurance plans with the added features and provisions of non-cash insurance claims, quick processing of claims, etc. Barring the corporate insurance plans that pay for the employees and the families, there are a large section of people who are not able to afford payment of the insurance premiums for coverage of health (Institute of Medicine, 2001). This is due to the higher cost of the private health insurance plans which is rising year after year. From this point of view, the private health insurance plans violate the standard principles of insurance as it is not directed solely to the welfare of the people. However, the large network coverage of the private healthcare providers have provided a far greater access for medical treatments to the people in the economy. The policies of the US government for promotion of health coverage and the prevention of diseases has immense impact on the health insurance sector in the US. The programs for promotion of healthcare and prevention of diseases have been carried out in the schools of US. This has raised the awareness of the people in understanding the importance of health care coverage in the case of prevention of diseases. The decline of the economic performance in the US has led to the rising demand of health insurance in order to cover the exposure against the health risks and deepening liquidity crunch. The health care promotions for prevention of diseases have changed the dominant thinking among the people of US and they have started to explore the various health insurance plans for their families. The employers have also included the health insurance costs in the compensation structure. The privatization of the health care insurance system in US has provided greater access and flexibility in receiving healthcare services. Due to the increase in demand of the health insurance products, the health costs of the society has increased. The legislative framework for the healthcare insurance sector is designed to maintain a balance between the health care cost of the society and the impacts on the economy which are inversely related (Elmendorf, 2009). Conclusion The health insurance services and the health costs are inversely related to the impacts on the economy of the country. For example, in the case of US after the economic downturn, the government has promoted the health care insurance services at a time when the society was undergoing a liquidity crunch and the need for covering the financial risk and health risk was inevitable. The growing awareness of the members of the society has impacted the growth of the health insurance sector in US. The sale of health insurance plans increased due to the increasing demand of health care coverage. The increase in the supply of private health insurance increased the cost of healthcare with added benefits of time effectiveness and higher efficiency of claim processing. The increase in the health costs impacts the societies in an inverse fashion. The rise in the health costs add to the financial burden on the society. The increment in the wages in case of corporate health insurance are delayed. Thus the society experiences lesser growth of liquidity as compared to the rise in consumer prices in the market. This leads to fall of economic demand for which the production of goods and services or the GDP of the country lowers. References Conrad, P. andLeiter, V. (2003). Health and Health Care as Social Problems. Maryland: Rowman & Littlefield. Musgrave, F. W. (2006). The Economics of U.S. Health Care Policy: The Role of Market Forces. New York: M.E. Sharpe. Savage, S. A. (2009). Instability Among Middle Class Families and the Impact of Health Insurance. New Hampshire: ProQuest. Institute of Medicine. (2001). Coverage Matters: Insurance and Health Care. Washington D.C.: National Academies Press. Elmendorf, D. W. (2009). Expanding Health Insurance Coverage and Controlling Costs for Health Care: Testimony Before the Committee on the Budget, U. S. Senate. Washington D.C.: DIANE Publishing. Kongstvedt, P. (2012). Essentials of Managed Health Care. Massachusetts: Jones & Bartlett Publishers. Read More