Understanding Health Insurance


Basic elements of health insurance are (1) Employer requirements (2)New industry taxes and fees (3) Cost-shifting (4) and Employee healthand accountability. Employer requirements are those requirements, forexample, benefit mandates, coverage mandates, automatic enrollmentand other additional responsibilities (Orin, 2001). On the otherhand, new industry taxes and fees is a basic element that adds coststo the insurance industry, for example, medical device tax andtransitional reinsurance fee. Thirdly, cost-shifting is an elementthat forces employers to manage their costs and also those shiftedfrom providers and hospitals. Finally, employee health andaccountability makes the employers to feel the impact of unhealthyemployees.

Employment-based health insurance coverage had its advantages. It ischeaper the employer who represents many workers has more cloutgenerally in negotiating prices with the insurers. In addition,insuring many employees are less costly than cost per person. It alsomeans spreading the financial risk of the insurer by insuring a groupof employees (Green &amp Rowell, 2006). For example, in 2008, 176.2million people were insured by employment-based benefits. On theother hand, the disadvantages include the inability of all workers toaccess the coverage since some employers are not required to offerinsurance. It could also result in losing the coverage when anemployee decides to quit the job to start his or her own business.

According to Beik (2011), building on the current system couldenable those who are uninsured to be enrolled in the programme ofpublic forums and employer-based insurance coverage. Secondly, thosewho are poor would benefit from creation of a new national purchaseof pools. These would offer a range of options in health plan, whichcould be bought for the poor and uninsured (Orin, 2001).


Beik, J. I. (2011). Health insurance today: A practical approach.St. Louis, MO: Elsevier/Saunders.

Green, M. A., &amp Rowell, J. A. C. (2006). Understanding healthinsurance: A guide to billing and reimbursement. Clifton Park,NY: Thomson Delmar Learning.

Orin, R. D. (2001). Making them pay: How to get the most fromhealth insurance and managed care. New York: St. Martin`sGriffin.

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