Health Insurance Importance

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Table of Contents

Introduction
Conclusion
References

Introduction

The insurance industry is one of the most vibrant sectors of the US economy. Health is one of the largest insurance sectors. The importance of health insurance to the health status of Americans necessitated the formulation of various laws to control the industry.

Health Insurance Portability and Accountability Act (HIPAA) and the Patient Protection and Affordable Care Act (PPACA) are some of the laws that regulate the industry.

The laws have improved the transparency of the industry and increased the affordability of insurance. The laws help in determining the legality of various actions of insurance companies.

Can an insurance company require insurance recipients to pay a different premium for the same coverage? Is this legal? If yes, what law or statues take precedence? If no, which law or statue takes precedence?

Insurance companies should not charge insurance recipients different premiums for the same coverage. Patient Protection and Affordable Care Act (PPACA) prohibits insurance companies from charging different premiums to insurance recipients due to a pre-existing condition or gender.

PPACA strives to reduce the number of Americans who do not have insurance. Charging uniform rates makes it easy for people to access insurance. This is because in most instances the exorbitant charges of most insurance companies are the major factor that prohibits people from seeking health insurance (Atlas, 2010).

However, insurance companies may still charge different premiums depending on the risk factors of the insured. These include age and occupation.

Can the insurance company require the insurance recipient to undergo required tests? What if the insurance recipient refuses to comply with the testing requirement?

Insurance companies use various actuarial techniques to calculate the premiums that the insured should pay. The calculations take into consideration the risks that the insured faces. Therefore, it is vital for insurance companies to obtain all the necessary data in order to calculate the risks that the insured faces.

Failure to provide the correct data would make the insured pay the wrong premiums. The insurance principle of utmost good faith necessitates the insured to provide correct information that is relevant to the insurance cover.

Failure to provide the correct information would make the insurance company fail to pay the insured if the event that the insured is covered against occurs. In some instances, the insurance company may require the insured to undergo various tests to determine the health status of the insured.

People who have ill health usually pay higher premiums than healthy people. The lifestyle of the individual also determines the premium that the individual would pay. Smokers usually pay higher premiums than non-smokers (Hammaker & Tomlinson, 2010).

The insured is at liberty to refuse to undergo the tests. However, should this occur, the insurance company would require the insured individual to pay higher premiums. Therefore, it is vital for the insured individual to undergo the tests. This may help the insured individual pay premiums that are much lower.

Is the insurance company discriminating again the insurance recipients who have heredity or predisposing health risk factors. Why or why not? If so, is this practice ethical?

Insurance companies require people to undergo various medical tests. Some of the tests include blood pressure check, cholesterol check, and blood glucose check. The tests provide an indication of the likelihood of the individual having health problems.

This helps the insurance company to calculate the right premium that the individual should pay. Failure to calculate the right amount of premium would make the insurance company lose vast sums of money. The insurance company may require people who have various health conditions to pay higher premiums.

This is because people who have various health conditions have a high likelihood of claiming payments from the insurance company. It is vital for insurance to maintain their profitability. If many people claim payments from the insurance company, the company may have huge losses (Garman & Forgue, 2011).

Therefore, it is not unethical for insurance companies to charge people who have hereditary or predisposing health risk factors higher premiums. However, PPACA prohibits companies from discriminating insurance recipients due to hereditary or predisposing health conditions.

Is the health insurance company legally and/or ethically required to offer assistance for insurance recipients who need to lower their rating? Support your opinion.

The health status of an individual determines the premium that the individual should pay. The insurance company should offer assistance to people who need to lower their ratings. Failure to provide assistance would make the insurance recipients continue paying higher premiums.

This would make the insurance company charge the insurance recipients higher premiums. This would mean that the insurance company would be fleecing unsuspecting insurance recipients (Scorsone, Levine & Justice, 2012).

Therefore, it is unethical for insurance companies to fail to provide insurance recipients with information on how they can reduce their ratings.

Conclusion

Insurance companies are primarily business ventures. Therefore, it is vital for companies to maintain their profitability. However, in so doing, they should not fleece unsuspecting clients. They should ensure that they charge attractive premiums to attract and maintain their clients.

Various federal legislations ensure that insurance companies engage in ethical practices. In addition, states have laws that regulate the activities of insurance companies.

References

Atlas, S.W. (2010). Reforming America’s Health Care System: The Flawed Vision of ObamaCare. Stanford, CA: Hoover Press.

Garman, E.T. & Forgue, R.E. (2011). Personal finance. Belmont, CA: Cengage Learning.

Hammaker, D.K. & Tomlinson, S.J. (2010). Health care management and the law: Principles and applications. Belmont, CA: Cengage Learning.

Scorsone, E.A., Levine, H. & Justice, J.B. (2012). Handbook of local government fiscal health. Sudbury, MA: Jones & Bartlett Publishers.

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