Question

1. How can a patient benefit if the premiums paid are more than the cost of the medical care received? How can an insurance company benefit if the medical care it provides costs more than the premiums paid in?

2. What are four main ways HMOs act to reduce the cost of care?

3. Which organization provides the largest amount of payment to physicians in the United States (FYI: it is a Government organization)? How does this organization choose to make these payments? Has the form of payment changed over time? Why?

4. How are the values determined in setting up a relative value scale?

Answer 1

First question:The patient can benefit from the insurance package when they get the full insurance coverage which puts them in an advantageous situation. Thus even if premiums are more than the cost of the medical care, the patient would take that insurance contract knowing that their insurance package would cover it up all.

Second question: When the insurance company has a greater cost than the premiums paid in by the customer, then giving partial insurance coverage would lead them to giving them an incentive to give them an insurance contract and at the same time be at a no profit no loss situation.