Economic Issues Simulation free essay sample

Economic Issues Simulation Economic Issues Simulation: Constructit Constructit is a company which does not presently have any employees with health insurance benefits. The company employs 1000 people and are willing to fund annual premiums as long as they can pay $4,000 per person. The employees comprise of 550 men and 450 women, ranging in ages 26 to 45. Furthermore, the workers 57% of the workers range from high activity to moderate activity while the 43% that remain are in predominantly sedentary positions. The employer must calculate what kind of risks the employee will face when considering what type of insurance to offer the employees. In this scenario, 38% of the employees are not at any major risk whatsoever. Although, nearly 18% of the employees are smokers and 13. 5 % of the group suffer from a respiratory illness or disease. Another significant risk factor is obesity. Obesity is a disease that affects 39% of the workers and these employees are also at risk for illness and diseases linked to obesity. The related diseases include heart disease, hypertension, hyperlipidemia and diabetes. The use of health care services increase as well through prescription medications, diagnostic imaging/services, and outpatient office visits. Castor Collins offers various different insurance plans which can be used to meet the needs of Constructit. The first plan is referred to as the Castor Standard plan. The Castor standard plan does not provide coverage for individuals with pre-existing medical conditions. Consequently, Constructit has a low margin of pre-existing medical conditions so the plan would work out in their favor. The estimated premium for this plan would be $3,428, which is slightly lower than the amount they offered to pay. The second option for the company is the Castor Enhanced plan. This plan is almost identical to the standard plan, with the exception that it covers pre-existing conditions. This plan would also be beneficial to Constuctit because it maximizes their earnings while limiting the risks. In particular, the plan would apply to all of the employees regardless of respiratory conditions or obesity related diseases. There is an additional cost for employees with pre-existing medical conditions; however the individuals with a clean bill of health would have a slightly less premium to pay. The good and the bad offset resulting in a premium lightly higher than the estimated budget at $4,428. The company can potentially make this work if they have the individuals with pre-existing medical conditions pay a pay a slightly higher premium than those with a clean bill of health. The third option is Castor Enhanced Minor. This plan is similar to Castor Enhanced because it allows individuals with pre-existing medical conditions to apply. However, it has the benefit of removing services inside the plan in order to reduce costs. This plan would be beneficial to Constructit because the plans can be adjusted so they are less than the $4,000 promised. Although the plans are adjusted, they still cover all the required services such as male/female sterilization , custodial care, and vision/hearing screenings. I personally feel that the best option for Constructit and Castor Collins is to invest in the Castor Enhanced Minor plan. This plan provides all the services necessary and is applicable to everyone regardless of pre-existing medical conditions. In addition, the plan is less of a risk compared to the Castor Enhanced plan because it can be altered to benefit each individual. For example, the plan would be beneficial to Castor Collins because it allows him to remove the obesity treatment services from the plan. The 39% of his employees that have issues with obesity can simply keep the obesity treatment service in their premium. The end result for Castor Collins is saving money because the people who do not suffer from obesity will need a lesser premium in cost. In addition, I would also include the substance abuse treatment in the plan. The history of the group states that the utilization of this service would be relatively low because there is only 18% of the employees which smoke or drink excessively. I would also suggest to include vision screening, hearing screening, and the male/female sterilization services. The cost for these services is relatively low and they are standard services which should be include in any insurance plan. Eliminating these standard services would deter employees from getting involved with the insurance plan as a whole so the company would suffer. Custodial coverage should be another service included with the plan. This additional service is not high cost and the amount of utilization is relatively low. Deciding on this plan while including vision and hearing screenings, male/female sterilization, and custodial care; and removing obesity treatment services, would result in the premium costing approximately $3,943. The total number is just slightly under the budget of $4,000. The use of this plan will make Castor Hall up to $3. 94 million from Constructit. This would be a very profitable choice for Castor Hall. I personally would not select Castor Standard insurance because it limits the employees that are applicable for that coverage. This particular plan does not include individuals with pre-existing conditions and other employees with issues with obesity. Furthermore, the fact that 39% of the group has obesity issues, there is a real possibility that there are pre-existing medical conditions inside that group. The Castor Enhanced plan is not beneficial because each premium cannot be altered to match the needs of the individual. Considering all the services included in the plan, the amount Constructit is willing to pay for a premium is not profitable for Castor Hall. The high utilization of these services would overwhelm the money made from annual premiums. In conclusion, economic decisions made in the healthcare market are very complex and subjective. The options offer endless uncertainties which influence the process. Considering supply and demand, the concept is difficult to decipher because a patient cannot determine when he/she will need medical attention. To make matters worse, a patient cannot determine how much treatment or medicine is needed to make them healthy. A company like Castor Hall must acknowledge the needs of the entire group and decide what plans are the most appropriate for the individual as well as the company.