Purchase Solution

Healthcare Plans

Not what you're looking for?

Ask Custom Question

A large manufacturing company has for years offered generous health insurance to its employees. Over time, the cost of the health plan has increased considerably with the average cost being roughly $6000 per year. The firm has hired a management consulting company to make recommendations about how to reduce costs. The consulting company has recommended two steps to help the company save cost. First, they recommend that the company offer a lower-cost insurance package with much higher deductibles, copayments and coinsurance rates. This new package is estimated to initially cost less than $4000 per year. Second, the consultants recommend that the employer charge employees $100 a month if they opt for the more generous health insurance plan. Discuss in detail and provide evidence for what the likely short and long run implications are for the two health insurance plans if he firm adopts the consulting firm's suggestions.

Purchase this Solution
Solution Summary

The solution discusses healthcare plans.

Solution Preview

I believe you want to focus on what Economists call "Adverse Selection". In offering the new (cheaper) insurance plan, people who are healthy (i.e. exercise regularly) are going to opt for the cheaper plan with higher deductibles. If they have a major health event, they are covered, but they do not anticipate needing to heavily use the plan. As such, the healthier individuals ...

Purchase this Solution
Free BrainMass Quizzes
Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

View More Free Quizzes
Related BrainMass Solutions

  • Triple Aim and Healthcare Products Demand

    Why does offering HMO plans affect incentives?

  • Strategies for Healthcare

    46404 Strategies for Healthcare I need some insight/help with these problems: 1. Define a management performance plan, linking action plans to issues of motivation, empowerment, training, and coproduction with patients and families. 2.

  • Healthcare marketing and segmenting

    In fact, the company states on its website that "Everyone is different, so we design plans as varied as your individual needs." http://www.uhc.com/ Consider the example of Medical Plans: It offers plans like Copay, High-Deductible, Health Savings Account

  • Health Care Governance Paper

    The questions to him should be related to his vision for his company, his future expansion plans, the new states that he wishes to cover, the new plans that he has in mind for the low-income groups and the financial plans for the company.

  • Healthcare Management Competitive Forces

    Public costs within public healthcare HMOs plans tend to be slightly higher in the public sector with fewer plans offered to its employees.

  • Managed Care & Contractual Services Market Situation

    In addition, these plans are usually utilized by many employers, which makes them highly efficient for employees who are seeking to provide for the healthcare needs of their family.

  • healthcare as a right

    In today's healthcare world, it is almost imperative that doctors are participating in various medical insurance plans, including managed care, for their businesses to survive. The advantages of managed care plans include: 1.

  • Barriers for Strategies

    What's the coinciding role of a healthcare administrator? How the action plans for a division are similar to action plans at the functional level? How are they different?

  • Propose a Healthcare Firm

    Distinguish is the driving force The difference between strategic plans and business plans are that strategic plans groom the CEO for the job that will be necessary while business plans identify the goals and objectives that must be met for the CEO

  • Dessler: Healthcare, Sarbanes-Oxley, & Benefits

    Flexible benefits can include flexible spending accounts that allow employees to spend tax-free dollars on child care or non-deductible healthcare expenses, medical debit cards, and core plus option plans.

View More Related Solutions