Impacts of the Long-term Care Insurance Policy - Essay Example

Health sciences and medicine Health sciences and medicine Long-term care insurance policy is an insurance product which is sold to help provide for the cost of long-term care, which goes beyond a pre-determined period. It is a type of personal care service which might need if one become unable to take good care of them or may be because of a disability, illness or a cognitive impairment this cover is not generally covered by Medicare, Medicaid or even health insurance. When one decides to purchase a long-term insurance cover there, are factors which one need to pay attention to before taking the road of buying a policy, to establish which the best deal is. Nevertheless, one may decide to purchase their own cover from an insurance agency only to find that they have no individual long-term care policy. Insurance company discourage individual purchasers since it is expensive to purchase and paying of premiums having in mind that main purchasers are old a retired and depends on security earnings (Hixon, 2012). Additionally, insurance company will not accept a purchase who uses more than 7% of their pay to make a purchase for the long-term medical care, since long term care is mean to protect personal assets against the high cost of extended long-term care. It is sensible if you possess those assets which need protection. An individual purchase still remains an inevitable idea especially when individuals have trouble stretching their income to pay for utilities, medicine and food. This in turn, makes insurance companies advocate for group and employer-offered long-term care insurance since the main aim of the plan is to spread the risk over many people. This ensures that savings are typically achieved when more people are buying coverage. Additionally there is cost sharing, which makes it even cheaper in buying the cover. Insurance companies will discriminate against individual purchasers and tend to favor group and employers based schemes. This is because in a group, there is an assurance of continuity payment of premiums while an individual the premiums may fail to be paid due to personal financial constraints. A Pharmacy Benefits Management Company (PBMC) can be said to be the third-party which is responsible in administration of prescription and drug programs. Its primary responsible is contracting with pharmacies; maintain formulary, discount negotiation, drug rebate with manufacturers and also making and processing prescription drug claims. The company works with self insured companies and the government programs aiming to reduce pharmacy expenditure while improving health care outcomes. However, the pharmacy benefit company is now becoming an administrator and negotiator which is an intermediary between the players and everyone who is in health- care system (Miller, 2000). Since the pharmacy benefits management company is responsible in making prescription of drug, it has led to completion in the medicine world; this has made the company the bane of community pharmacies existence. PBC have made contracts with community pharmacies where a number of PBCs are primary competitors through their mail-order pharmacies, this have made to rise of conflict of interests that allows PBCs ability alter the rules for their advantages (Gold, 2003). The act of making special favors on some drug brand names over others, which can be said to be side deals that with PBCs often collecting payments without sharing this information to the public and audit firms. The PBC have moved a notch higher where they have their own manufacturers and repackage generic drugs and control the product average price. The PBC want to enjoy a monopoly where they shall be the only determinants of the drug price. This has made the fate of patients in the hands of profit driven PBC rather that in the hands of professional’s doctors and pharmacists. Cost for drugs has been significantly added as the PBC is only interested in profit making it raise the drug cost at will (David, 2010). In the drug market, which can be said to be an oligopoly type of market, where few sellers and many buyers in a more competitive market the determinant and price fixers are the sellers and manufacturers. The PBCs dictates every aspect of drug delivery chain this includes what drugs are covered under the health plan, how much the pharmacies can charge the quantity patients can purchase and also where the drugs can be acquired. This makes it able to increase the drug price where notable is that the United States has the highest price for pharmaceuticals (Hixon, 2012). The government has formulated a variety of techniques aiming at reducing the cost of providing health benefits and also improved the quality of care. The intention is do away with unnecessary healthcare cost via a variety of mechanisms which include incentives for physicians and patients which allow them to have the right to select less costly forms of care, services, programs for reviewing the medical necessity of specific services, establishment of cost sharing incentives mainly for outpatient surgery, controls of inpatients admissions and lengths and also making selective contracting with health care providers. With these programs, the government shall be able to significantly reduce health costs (Hixon, 2012). The MCS also establishes and also carry out a maintenance network for physicians and other ancillary services this service is aimed to directly pay physicians directly and also conduct. The federal government has introduced financial incentives, which are aimed at providing accountability that will increase disclosure mandates that will make medics recognize consequential effect of their treatment recommendations and hence reduce the amount of care which is subjected to the insurance reimbursement (David, 2010). Other incentive include the managed care in indemnity plans, which are meant for providing precertification for non-emergency hospital admissions and also utilization of reviews. The use of independent practical association which is a legal entity with the mandate to make contracts with a group of physicians to provide a service to the HMO’s members where the physicians are paid on the basis of capitation, this contract is made in a way that it is exclusive allowing an individual doctor to sign contracts with multiple HMO’s (Gold, 2003). There are many reasons that try to explain why pharmaceuticals cost more in the United States than in other nation. The first reason is the spending on physicians which is about five times per capita as compared to other countries this makes any visit to a doctor to be paid so high, the high level of income per capita in the us also contributes to U.S health care spending which is 34% difference with other industrialized countries. There are many private owned health facilities s compared to government owned. Most of these facilities are profit making in nature hence very high cost of attending to them (Miller and Horowitz, 2000). Reference David, S. (2010), The Case for Smarter Medicine: How Evidence-Based Protocols Can Revolutionize Healthcare, Retrieved on 17th march 2014 from Read More