The course textbook states that “healthcare is one of the most important factors impacting the economic security of individuals and families today” (p. 308). Despite healthcare’s impact on the economy, the healthcare system (including issues related to insurance) is often referred to as ‘broken,’ or ‘defective.’ This week’s assignment asks you to think critically about the relationship between healthcare policy and the economy.
To begin, complete the following exercise which you will use in your analysis:
- After reading about long-term care insurance (p. 323), figure out if you already have it (possibly through an employer) or if not, how you would get it in your state.
- What triggers make you eligible for benefits? What is covered and what is excluded?
- How easy is it for you to access this type of insurance?
- What are your costs? How is this protected from inflation?
After completing this exercise, write a paper discussing long-term care insurance. Use the Internet Resources provided by your textbook (p. 335) and other peer-reviewed sources to aid your research.
Begin with defining its origins and relationship to the economy. Explain the characteristics of long-term care insurance, including, but not limited to the types of long-term care policies, triggers to become eligible for benefits, exclusions, and protection against inflation. Address any burdens you think it is attempting to relieve and how it benefits society and individuals. Discuss the role and motivations of insurance companies, as well as the ease in which individuals can access this insurance. Conclude with how well you think long-term care insurance will meet the needs of society and the economy in the coming future, including any alternative or additional recommendations you think should be adopted.
Your paper should be a minimum of 2000 words, not including the title page or reference pages. Draw upon insights from your course textbook, industry-related websites, and peer-reviewed sources to include a minimum of 4 references.
Max, age 28, is insured under an individual medical expense policy that is part of a preferred provider organization (PPO) network. The policy has a calendar-year deductible of $1,000, 75/25 percent coinsurance, and an annual out-of-pocket limit of $2,000. Max recently had outpatient arthroscopic surgery on his knee, from a skiing accident. The surgery was performed in an outpatient surgical center. Max could not work for two weeks and lost $2,000 in earnings.
Max incurred the following medical expenses: (Assume that the charges shown are the charges approved by Max’s insurer and that all providers are in the PPO network.)
- Outpatient X-rays and diagnostic tests: $800
- Covered charges in the surgical center: $12,000
- Surgeon’s fee: $3,000
- Outpatient prescription drugs: $400
- Physical therapy expenses: $1,200
In your discussion, answer the following questions and briefly explain how you arrived at your calculations:
- How much of the expenses will be paid by the Insurance company?
- How much of the expenses will Max pay?
- If the surgeon was not in Max’s PPO network, would his policy cover this fee? Why or why not?
- After calculating these answers, imagine if a member of Max’s family wanted to understand the values but they have little understanding of medical insurance and its terminology. Describe Max’s costs as if you were explaining it to this member of Max’s family as clearly and simply as possible, including the out-of-network surgeon.
Expert Solution Preview
In this assignment, we will discuss the relationship between healthcare policy and the economy, with a specific focus on long-term care insurance. We will explore the origins of long-term care insurance and its impact on the economy. Additionally, we will examine the characteristics of long-term care insurance policies, eligibility triggers for benefits, coverage inclusions and exclusions, protection against inflation, and the role and motivations of insurance companies. We will also analyze the ease of accessing this insurance and evaluate its ability to meet the needs of society and the economy in the future. Finally, we will provide recommendations for alternative or additional measures that should be adopted.
Answer to Content:
Long-term care insurance is a form of insurance that provides coverage for individuals who require long-term care services. It is designed to protect policyholders from the high costs associated with long-term care, which can include nursing home care, assisted living facilities, and home healthcare services.
The origins of long-term care insurance can be traced back to the mid-20th century when the need for long-term care services began to increase. As the population aged and medical advancements improved life expectancy, the demand for long-term care services grew. Long-term care insurance emerged as a response to the financial burden imposed by these services on individuals and families.
Long-term care insurance policies vary in terms of coverage options and premiums. There are typically two types of policies available: facility-only policies and comprehensive policies. Facility-only policies provide coverage for care received in a nursing home or assisted living facility, while comprehensive policies cover both facility care and home healthcare services.
To be eligible for benefits under a long-term care insurance policy, certain triggers must be met. These triggers are typically associated with functional limitations or the inability to perform activities of daily living independently. Common triggers include the need for assistance with bathing, dressing, eating, transferring, continence, or cognitive impairment.
Exclusions in long-term care insurance policies can vary but may include pre-existing conditions, self-inflicted injuries, alcohol or drug-related incidents, or care received outside the policy’s defined scope. It is essential for policyholders to understand the specific exclusions outlined in their policies to ensure they have a clear understanding of what is covered and what is not.
Protection against inflation is an important consideration in long-term care insurance policies. As the costs of long-term care services continue to rise, policies may include provisions for inflation protection. This can be in the form of automatic compound inflation protection, where the benefit amount increases annually based on a specific percentage, or optional inflation protection, where policyholders can choose to increase their benefit amount periodically.
Long-term care insurance aims to relieve individuals and families of the financial burden associated with long-term care services. By providing coverage for these services, it helps individuals maintain their financial security and protect their assets. From a societal perspective, long-term care insurance plays a crucial role in ensuring that individuals have access to the care they need without depleting their savings or relying on public assistance programs.
Insurance companies play a vital role in the long-term care insurance market. Their motivations include providing financial protection to policyholders while maintaining profitability. Insurance companies assess risks associated with long-term care and use actuarial calculations to determine premiums. They also develop policies that align with regulatory requirements and market demands.
The ease of accessing long-term care insurance may vary depending on several factors such as age, health status, and financial resources. Younger and healthier individuals may find it easier to access and obtain coverage at a lower premium. However, as individuals age or develop health conditions, the availability and affordability of long-term care insurance may decrease. It is crucial for individuals to plan for long-term care insurance early in their lives to ensure they have sufficient coverage when needed.
In the coming future, the need for long-term care services is expected to increase significantly due to demographic shifts and advancements in medical technology. Long-term care insurance will play a crucial role in meeting the needs of society and the economy by providing financial protection and access to quality care. However, it is important to consider additional recommendations to strengthen the long-term care insurance system. These may include exploring innovative financing options, increasing public awareness about the importance of long-term care planning, and promoting policies that incentivize early planning and enrollment.
Overall, long-term care insurance is a significant component of the healthcare system and has profound implications for the economy. By understanding its origins, characteristics, benefits, and challenges, we can make informed decisions and recommendations to ensure the future stability of long-term care insurance and its impact on individuals and society.