Insurance case study: Health Savings Account

Insurance Case Study Analysis
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Insurance Case Study Analysis
Question 1:
The Health Savings Account (HSA) mentioned in the case study is based on a health insurance plan with a tax-advantaged account to help reduce medical expenses for patients who are supported by the high-deductible health plans (HDHPS). Accordingly, an individual who utilizes the HSA services can make contributions themselves or through their employer-based on an annual fixed maximum amount. The contributions are then invested over time and can be used to pay for qualified medical services like dental care and vision treatment, or purchase of over the counter medicine. It follows that an individual only pays a portion of the claim they are responsible for. The insurance company covers the remaining portion, which is typically 80%-90% based on specifications in the contract.
As already mentioned, an individual with HDHPS may qualify for the HSA. The individual who qualifies for HDHPS is paired with an HSA; then, its services are offered by a health insurance provider. Numerous financial institutions can also open an HSA. Other items in the eligibility criteria are set out by the Internal Revenue Service (IRS). They include an individual having no additional health coverage, not listed as a dependent on another person’s tax returns, and not being enrolled in Medicare. An individual’s contributions to an HSA are only through cash. Moreover, an employee’s HSA can be funded by both the employee and their employer. Family members can also contribute to the HSA belonging to an eligible person. Similarly, self-employed or unemployed individuals, too, can contribute towards an HSA as long as they meet the eligibility criteria for having an HSA.
Question 2:
Market forces are envisioned as critical drivers to efficient and affordable healthcare systems. However, market participants are increasingly pessimistic about the potential for private market forces to improve the outcomes and efficiency of healthcare systems (Nichols et al., 2004). Certain factors are responsible for the waning confidence in the ability of market forces to improve healthcare. To begin with, the market power of providers tends to arise from an environment with few adequate substitutes, thus leading to higher service prices and lesser pressure to offer quality care (Nichols et al., 2004). Further, employers are unable to push their systems towards quality and efficient healthcare practices (Nichols et al., 2004). It follows that most employers do not provide choice plans, while very few contribute fixed-dollar amounts to their workers’ health insurance.
Furthermore, there is insufficient health plan competition since the managed care model does not provide opportunities for the competition based on the quality and price of service delivery (Nichols et al., 2004). Finally, there is a lack of potentially efficient provider systems; thus, most provider markets are fragmented with practices only organized in single-specialty and often small groups that cannot cover for capitation risks beyond the services they offer (Nichols et al., 2004). In the foregoing, there is a growing need to develop integr...