No one expects to get sick or hurt, but health insurance can help cover the expenses if this does happen. It also guarantees you access to specialists when they’re necessary.
Reforming how we pay for health care is essential to spur innovation, lower costs and improved quality. But in order for this to take place, consumers must have the ability to make informed decisions about coverage and care.
Costs
Health care and insurance costs can vary significantly, depending on a number of factors. Being informed about the major types of costs helps you make informed decisions and find a plan that fits within your budget.
Costs include the premium you pay each month and out-of-pocket expenses like copayments and deductibles. Deductibles help reduce your total monthly expense by capping how much you must spend on covered health services and medicines.
Your health insurance costs are determined by a variety of factors, such as your age and where you live. In addition, the size of your family also plays a role.
Health care spending is largely driven by the price of medical services, which make up 90% of total expenditures. An aging population, chronic diseases and rising costs for drugs, procedures and technologies are all major contributors to this growth in spending.
Coverage
Healthcare is an expansive field that involves many efforts to maintain or restore patient health and wellbeing by licensed medical professionals. These may include doctors, nurses, dentists, therapists, hospitals, as well as pharmaceutical companies.
Insurance plays a significant role in the healthcare industry, paying or reimburseing for medically necessary services. This coverage can be provided by private insurers, group health plans offered through employment or government programs like Medicare or Medicaid. Insurance is heavily regulated at both the state and federal level. Ultimately, having insurance grants you legal access to certain forms of medical care without fearing financial ruin. Coverage is especially critical for those at greatest risk of missing out on needed services and those unable to afford it. Low income Americans and minorities are particularly vulnerable, as are those from racial or ethnic backgrounds.
Choice
Consumers have many choices when selecting their doctor and insurance plan; these decisions can have far-reaching effects on their healthcare experience.
American healthcare policy is driven by a consumerist philosophy, which suggests that choice leads to improved health outcomes and lower costs. Unfortunately, studies suggest consumers do not always make the best choices.
Consumers often make poor financial decisions when presented with complex health insurance options (Bhargava et al. 2017). Studies have even demonstrated that people often select plans which would cost them more money than what they actually spend on medical care (Muskady et al. 2017).
Even when given a limited choice set, consumers still fail to select plans that best meet their requirements – this is known as “choice overload.”
Transparency
Transparency in healthcare and insurance has long been a contentious issue. While some have argued that transparency will lead to price increases, others argue that it can be an effective tool in driving down healthcare expenses.
Transparent pricing can help consumers make informed decisions when selecting medical treatments, procedures and insurance plans. They may also use price information to negotiate for services and find the best value for their needs.
Studies have revealed that consumers can save money with price transparency tools. For instance, one study of New Hampshire’s online price transparency database revealed healthcare spending decreased by 3% over five years, benefiting both insurers and consumers (particularly those with deductibles).
In addition to price transparency, consumers also desire access to quality and safety data when it comes to their health care. Therefore, the federal government has taken steps to make this information more readily accessible to patients and families – an initiative known as healthcare consumerism. This represents a major shift in how we perceive and engage with the healthcare industry.
