0To prepare for this Discussion: Review the materials on critical reading strategies and on the MEAL plan for paragraphs.Read the provided article in the Learning Resources, taking note of where the a
Employer Obligations
The reason for health insurance is multi-faceted, but intended to continue care for individuals in both treatment and prevention that actually continues to lower healthcare costs. As an employer, the obligation runs deeper in wanting to maintain the health of those without healthcare issues but also to ensure those with them are given the opportunity to be treated so that the workforce does not diminish. With a large percentage of employees in the organization having health care issues, it is important to create a system that is both cost effective and comprehensive to ensure it is utilized and also valuable without impact on the organization (Sommers, Musco, Finegold, Gunja, Burke, & McDowell, 2014). In this sense, health care is not only a moral obligation but also a business model to sustain the workforce.
Moral Hazard vs. Adverse Selection of Insurance
Ethically, employers should introduce benefits that have individualized choices because higher out-of-pocket costs tend to reflect in reduction of use in various healthcare settings (Baiker & Levy, 2015). When families are required to pay more, healthcare becomes a burden and something that is often just had but not used. One example is my current position, working for state government. While one of the selling points are the benefits, insurance costs and premiums create a decision for my family of four as I am a single mother and the money I earn needs to be more towards our daily living costs. Thankfully, myself and my children are healthy and use healthcare only in prevention with check-ups and annual visits, however, if that were to change, my current plan would not be enough to cover a large amount of care. Recently I was unexpectedly hospitalized for pneumonia. Staying in a hospital for over a week is costly enough but the coverage I have creates a great amount of stress for the bill when it arrives.
Adverse selection of healthcare is when there is an imbalance between healthy vs. unhealthy policyholders (Getzen, 2015). With this scenario, 40% of people in need of healthcare will tend to sway the decision making of the workforce insurance policy. This population will require more coverage so the purchase of insurance will be greater for the employer while the remaining 60% of “healthy” workers may not purchase a policy at all. This can create a financial risk for the organization with higher costs and premiums that could in the end cost the company more in terms of preventative care (Getzen, 2015).
The Patient Protection and Affordable Care Act (ACA) attempted to address these challenges by making healthcare not only mandated but also eliminating things like pre-existing conditions that reduced the acceptance of insurance to the individual (Duggan, Goda, & Jackson, 2019). With the recent effort by current administration to repeal the ACA, eliminating the individual mandate of people required to have insurance or be fined, the cost continues to fall on the employer, making selection of the right insurance policy/policies to be important to maintain the business. While the number of uninsured/underinsured did fall with the implementation of the ACA, increasing 6.5% in Medicaid expansion states and 2.6% in states that did not, giving opportunity to many and taking some of the financial burden off employers even with mandates in place (Dugga, Goda, & Jackson, 2019).
Recommendations for Health Insurance Policy
Because of the 60% of younger workforce with minimal health care issues identified, a health care maintenance organization (HMO) should be one of the choices. In a recent study done in Massachusetts between 2010-2012, the use of HMOs used physician cost control incentives, a better saving then Preferred Provider Organizations (PPO) that did not (Ho, Pakes, & Shepard, 2018). With a younger and healthier workforce, the attention to use health care prevention should also include incentives to the policy holder as well as the employer. In my current position, engagement in certain preventative methods like stopping smoking, attending annual health checks, health fairs, etc. provide incentives that make engagement not only good for the policy holder but also for the organization. Giving policy holders tiered options is also important so that lower deductibles, lower costs, or matching health risk to healthcare can ensure it will be utilized. For a small organization like this, with a large percentage in need of preventative care in pre-existing conditions, using an HMO can help to build a system that is not only ethically appropriate but also cost effective.
Reference
Baiker, K. & Levy, H. (2015). Cost sharing as a tool to driver higher-value care. JAMA Internal Medicine, 175(2), 399-400.
Duggan, M., Goda, G. S., & Jackson, E. (2019). The Effects of the Affordable Care Act on Health Insurance Coverage and Labor Market Outcomes. National Tax Journal, 72(2), 261–322. https://doi-org.ezp.waldenulibrary.org/10.17310/ntj.2019.2.01
Getzen, T. (2015). Health economics for the healthcare administrator (Laureate custom edition). New York: Wiley.
Ho, K., Pakes, A., & Shepard, M. (2018). The Evolution of Health Insurer Costs in Massachusetts, 2010-2012. Review of Industrial Organization, 53(1), 117–137. https://doi-org.ezp.waldenulibrary.org/10.1007/s11151-018-9623-2
