Economic Issues Simulation Paper

1354 Words Apr 7th, 2012 6 Pages
Economic Issues Simulation Paper
Christi L. Baker
HCS 440
March 5, 2012
Steven Miracle

Castor Collins Health Plans, a regional health maintenance organization (HMO), in the state of Pantome provides HMO health insurance and health care services to enrollees through its statewide network of physicians and hospitals. E-Editors, a company with 1600 employees has asked Castor Collins to find an employee health insurance plan that accepts preexisting conditions at a maximum premium of $4,500 per person. Caster has two plans, which may fit the client’s demands. This paper converses the selection method including risk factors as compared to premiums that the company is willing to pay. In addition, the paper also considers the
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If the goal were to minimize risks, one may consider not providing insurance to this group, which would mean a reduction in earnings (University of Phoenix, 2011). By including substance abuse treatment in Castor Enhanced Minor for E-Editors, the costs of providing this service are not too high and a comparison of the expected utilization of this service with average utilization shows that the risk of covering this service is low (University of Phoenix, 2011).
Castor Collins has two plans suitable for this company – Castor Standard, which does not cover preexisting conditions, and Castor Enhanced, which covers preexisting conditions (University of Phoenix, 2011). In addition, Castor Collins can mitigate its risk by customizing Castor Enhanced to remove a few services that may have high utilization (University of Phoenix, 2011). Castor Collins might not insure any of these plans if the risks outweigh the profits (University of Phoenix, 2011).
E-Editors will pay $4,500 as a maximum annual premium with preexisting conditions covered. Because Castor Standard does not cover preexisting conditions, the choices 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 choice is not the optimum choice. Moreover, the Caster Enhanced Minor priced at $4,556 is also over the $4,500, but there is the

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