Healthcare Financing Essay 2022

Running Head: HEALTHCARE FINANCING
1
PRIVATE HEALTH INSURANCE
Name of the Student:
Name of the University:
Author Note:

HEALTHCARE FINANCING 2
Health care services are continuously emerging, and with accordance, the cost is also
increasing. The increased cost causes multiple issues for the consumer for accessing an
effective quality of care. Thus, health policy has played an immense role in increasing the
value of healthcare by fostering healthcare delivery. According to Who.int (2020), health
policy would allow or reflect the consumer or care seeker to decide, plan along with action
towards their healthcare goals. Policy summaries the priorities and build an effective plan for
the consumer to avail the healthcare services. This essay intends to examine the
compensation towards the healthcare services along with the necessary policy or policy
changes that would shape the delivery of care towards the consumers or care seekers.
The private health insurances evolved around 1930, where the school teachers of
Dallas provided a proposal to the hospital that if they could provide the qualitative care or
hospital care on a prepayment basis (ssa.gov, 2020). Thus, the hospital comes up with
effective planning that would provide hospital care to teachers with the necessary changes.
As this plan was successful, every hospital started to follow and implement their perspective
plan for providing hospital care. The plan of Dallas has one limitation is that it only provide
the hospital care. Many hospitals were working with multiple diversified quality care or
delivery of care. Therefore, the American Hospital Association adopted or practices the
principle of a single acceptable plan for group hospitalization. And thus, the blue cross and
blue shield plan were introduced for providing the hospital care that has involved the overall
healthcare industry (Fox, 2015). With the modernization of medicines and treatment, there
was a major issue of paying for medicine. It became essential for an effective insurance
policy, and thus United Healthcare was formulated for effective delivery of care in the year
1970s. Later, in the year 1990s, prudential healthcare by Aetna was created that became
popular. In the present day, the healthcare insurance policy has evolved dramatically and
continued in providing quality care involving the healthcare industry.

HEALTHCARE FINANCING 3
Individual enrolled in private health insurance would have efficient benefits along
with potential risks. Therefore, there is multiple federal law that would protect these
individuals or consumers for availing effective benefits from their enrolled insurance
schemes or programs. Multiple programs such as providing free preventive care, protecting
the preference of doctors, and assisting in understanding the coverage are included. Federal
law states that the individual under the coverage of insurance has full right to choose their
doctor. Among the primary care network, an individual can opt for any physician or any
paediatrician accordingly. Also, there is no referral needed by the primary care network for
availing or choosing obstetrical or gynaecologist (Lathrop & Hodnicki, 2014). The 80/20 rule
has a greater benefit for the insured individuals, and this rule is implemented on the policy
provider companies. Eighty per cent of the premium was taken from the individual needs to
be invested in the healthcare cost along with the improvement of qualitative activities by the
private health insurance provider or firms. The remaining 20 per cent can go for promotional
or marketing activities and administration. Another major benefit from the federal law is that
the insurance companies cannot cancel any individuals’ coverage. Earlier, there were
multiple issues of cancelling coverage or schemes of the individuals for vague reasons, and
therefore, now it is illegal for the insurance provider to cancel any schemes.
Consumer-driven health care is a new approach that would allow consumers or care
seekers to have control over their healthcare cost. The third parties or interconnected element
would not be necessary (Mandl & Kohane, 2016). The newer approach that would allow the
consumer or care seekers to avail the service according to their preferences and priorities as
well as making their effective use of money on that basis. The consumer can select particular
ranges of services such as dental or emergency services and can apply or obtain any
healthcare services through the policy or healthcare insurances. Consumers are becoming
more knowledgeable along with responsible regarding their health and sometimes, a