Economic Issues Simulation Paper
January 13, 2014
Economic Issues Simulation Paper
Castor Collins is a regional health maintenance organization (HMO) that provides insurance and health care services to enrollees through its network of doctors and hospitals. Castor Collins offers several different insurance plans that would be beneficial to the employees of Constructit. The insurance plans offered vary according to services provided, cost of annual premium to employees, and utilization of services. Castor Collins has the ability to tailor an insurance plan that meets the health needs of Constructit employees at an affordable price while still brining in revenue for ...view middle of the document...
Potential Utilization of Services
Health insurance coverage has a direct impact on medical services and their costs. Castor Collins has three different insurance plans that may benefit the employees at Constructit. Constructit employees are relatively young and in good health. Castor Standard is the first plan offered and has an annual premium of $3,428, which is lower than the $4,000 they are willing to pay. The plan offers emergency services, maternity care, hearing and vision services, prescription services, obesity care, and physician office visits. These services have a utilization percentage that is at or below 6% with the exception of maternity care at 10%. The average utilization percentage from the population in Pantome is about 6%. Although Castor Standard does not cover pre-existing conditions on this policy, the percentage is very small for this group of people.
The second plan that is being offered is Castor Enhanced and has an annual premium of $4,428. The annual increase is due to the higher risks and a higher premium must be charged. This is partially due to Castor Enhanced covering pre-existing condition. When a service such as diabetes care is covered, they are more than likely going to be utilized by patients increasing utilization percentages. The cost for care provided to those with pre-existing conditions could be offset by the 38% of employees with no major health risks. Castor Enhanced is a good plan for Constructit employees because it covers pre-existing conditions; however, the employees would have to agree to an increase in annual premiums.
The third plan to consider is Castor Enhanced Minor and has an annual premium that is dictated by the services offered. Castor Enhanced Minor is similar to Castor Enhanced with the services initially offered, annual premium, and allowing pre-existing conditions. The difference is that Castor Enhanced Minor can be tailored to strike a balance between high risks and premium charged.
When looking at the services that can be taken away, it is important to also look at their utilization percentages and the health risks associated with Constructit employees. For example, male/female sterilization has a relatively low cost to Constructit employees; however, it is not a highly utilized service among the 40% of employees age 26-30. Rather, services to look at removing are the ones with a higher utilization percentage such as obesity care. Obesity care is very costly to Constructit employees and has a higher percent of...