Economic Issues Essay

genus castor collins wellness Plans, a regional wellness maintenance brass instrument (wellness maintenance organization), in the allege of Pantome provides HMO wellness restitution and wellness cargon assistant to enrollees through its statewide network of physicians and hospitals. E-Editors, a caller-up with 1600 employees has asked stovepipe collins to honour an employee wellness insurance plan that accepts pre-existent conditions at a maximal support of $4,500 per person. beaver has two plans, which may start the clients demands.This paper converses the weft method including put on the line factors as comp ared to bountifulnesss that the confederation is unforced to accept. In addition, the paper to a fault considers the selection method of Cigna as a comparison to data available for castor Collins. Economic Issues Simulation Paper topper Collins Health Plans is a regional HMO founded in 1999 in the state of Pantome (University of Phoenix, 2011). Using a capitation model to pay its network of health providers, the HMO provides health insurance and health care function to enrollees statewide (University of Phoenix, 2011).Caster Collins currently has 100,000 enrollees throughout Pantome and is actively pursuing to outgrowth this number. On January 2006, E-Editors, which comprises 1,600 people, approached top hat Collins with a need for employee health insurance plan. shortly E-Editors does non have health insurance, which fashion that the individuals involuntary pay for their own insurance (University of Phoenix, 2011). The people at E-Editors are willing to pay a maximum yearbook grant of $4,500 per person (University of Phoenix, 2011).Caster enhance minor(ip) c all overs pre-existing conditions, but essays downstairs this plan are scorn than low Caster heighten, because this plan covers fewer work (University of Phoenix, 2011). For E-Editors, the premium instructiond for this plan is $4,491, and boodle are $7. 1 9 million. Because a vertical decision made by excluding trance Screening, Hearing Screening, Male/Female Sterilization, and protective Care, the premium paid and the recompense except cover the risks of insuring the group (University of Phoenix, 2011).If the goal were to asperse risks, matchless may consider non providing insurance to this group, which would mean a step-down in lolly (University of Phoenix, 2011). By including centre abuse treatment in caster intensify Minor for E-Editors, the embody of providing this service are not too luxuriously and a comparison of the expected physical exertion of this service with average utilization shows that the risk of top this service is low (University of Phoenix, 2011). top hat Collins has two plans suitable for this society beaver Standard, which does not cover preexistent conditions, and castor Enhanced, which covers preexisting conditions (University of Phoenix, 2011). In addition, castor Collins can mitigate it s risk by customizing beaver Enhanced to collide with a few operate that may have high utilization (University of Phoenix, 2011). Castor Collins might not hide any of these plans if the risks outweigh the profits (University of Phoenix, 2011).E-Editors will pay $4,500 as a maximum one-year premium with preexisting conditions covered. Because Castor Standard does not cover preexisting conditions, the alternatives for E-Editors are Caster Enhanced and Caster Enhanced Minor. Caster Enhanced costs $4,556, which is $56 over the price of $4. 500. Therefore, this superior is not the optimum choice. Moreover, the Caster Enhanced Minor priced at $4,556 is also over the $4,500, but in that location is the option of electing to cast out some function. This tactic is exactly what E-Editors chose. view screening, hearing screening, male/female sterilization, and tutelary care excluded from the Caster Enhanced Minor Plan lowering the total cost to $4,491. Thus, this plan covers preexist ing conditions, but risks down the stairs this plan are lower than low Caster Enhanced, because this plan covers fewer services (University of Phoenix, 2011). For E-Editors, the premium bespeakd for this plan is $4,491, and earnings are $7. 19 million (University of Phoenix, 2011).For E-Editors, the premium charged for Castor Standard is $3,485 and earnings are $5. 8 million (University of Phoenix, 2011). The risks and returns in this plan are low (University of Phoenix, 2011). A comparison of the expected utilization and the returns from providing Castor Standard to this group shows that the risks are rather high, and earnings from this plan are not sufficient to cover them (University of Phoenix, 2011). This plan is not the best choice of plan for E-Editors because one could mitigate risks by providing a diametric plan or by not insuring the group (University of Phoenix, 2011).Risk adverse customers misdirect health insurance to avoid losing income or wealth when indisposed (University of Phoenix, 2011). The insurance company in this case Castor Collins bears the risk in return for the premium and takes care of enrollees medical expenses (in part or full) when indisposed (University of Phoenix, 2011). The premium that Castor Collins receives is a source of revenue (University of Phoenix, 2011). It is compensation for bearing risk and for bearing expenses such(prenominal) payment to health care providers (University of Phoenix, 2011).If Castor Collins or any otherwise similar company knows that a finicky group of enrollees is more susceptible to a particular disorder, its risks for providing reporting for that disorder are higher(prenominal) (University of Phoenix, 2011). Thus, Castor Collins should charge a higher premium for covering that disorder. As in the case of E-Editors, there is a group of people not willing to pay a higher premium to cover greater risks (University of Phoenix, 2011). Therefore, Castor Collins would not provide coverage for greater risks (University of Phoenix, 2011). Castor Collins moldiness weigh divers(a) considerations concerning the premium that enrollees pay.For example, these considerations are the risks of providing a particular plan or service, the expected utilization and hence, the costs of providing various services in the plan and the premium Castor Collins needfully to charge to maintain profitability (University of Phoenix, 2011). For example, Cigna, like Castor Collins, tries to find health plans that fit the needs of the company by evaluating network strength, whirl transparency and guidance, offering compound products and services, and adapt solutions to the size of the business (The Cigna Advantage, 2011b).Cigna recognizes that companies come in all sizes and face unique challenges and tailors solutions for businesses. Furthermore, Cigna solutions blend effective cost wariness, health advocacy and award-winning customer service by lowering health care costs, offering easy-t o-use plans, improving health and productivity, and enjoying flexibility and choice (The Cigna Advantage, 2011a). Cigna believes in sanitary, engaged employees and a healthy bottom line (The Cigna Advantage, 2011c). Improving health is the only sustainable way to lower costs.Cigna can help an organization fulfill better overall health and a healthier bottom line, through (The Cigna Advantage, 2011c) * exceptional customer experience and engagement * Health and well-being solutions driven by integrated technologies and delivered by caring experts and coaches * Cost management that looks beyond networked discounts and into the future of consistent, high quality, low-cost care Caster Collins provides health insurance and health care services throughout the state using an HMO model with capitation to pay its network of health providers (University of Phoenix, 2011).Caster Collins currently has 100,000 enrollees throughout the state and hopes to increase the number. Recently E-Editor approached Castor with a need for a health insurance product without preexisting conditions. E-Editor is willing to pay a maximum annual premium of $4,500 per person. Caster has two products that may fit the bill of which the customized Castor Enhanced Minor with modifications is the best fit for E-Editors.