Healthcare Memo

Healthcare Memo

To: Secretary

From: (Your Name)

Date:

Subject: Examining a Proposed Change

The purpose of writing this memo is to examine a proposed change of permitting Medicare recipients to purchase high deductible insurance plans and use the premium savings to start a medical account, and paying higher deductibles results in lower premiums (HealthCare.gov, 2019). Therefore, the policy should allow all Medicare recipients to buy high deductible health plans so that they can keep their premium payments low.

High deductibles are becoming integral in helping individuals to access quality healthcare services without incurring any financial constraints. Nearly all employed people have a coverage deductible of at least $1000. The exchanges of this silver plan are almost $4000. Previously, the assumption was that only care professionals could make or manage such decisions (Henderson, 2017). There is a need to educate Medicare recipients on the reason a high deductible provides extra benefits. Imagine a scenario whereby person A chose a $1000 deductible instead of $100. The reduction in premium is at least $900. Therefore, if one can risk an extra $900, it means that they can save all the incentives in a bank to counter the risk (Lo Sasso et al., 2010). The savings are worthwhile, and as days go by, and the client will realize that they made a wise decision.

High deductibles health plans mean that Medicare recipients will spend more out of pocket money when they need to see a medical practitioner or filling a prescription. Therefore, this practice will lead a careful and selective use of the healthcare benefits which avoid any wasteful or unnecessary drugs or procedures (Hudson et al., 2017). For instance, one can opt to fork more dollars out of the pocket when treating minor ailments, including sore throat, to allow the health insurance benefits to cover severe other illnesses.

Focusing on the economic incentive, if the medical services are free at the delivery point, and patients have an opportunity to use it until it becomes almost unworthy to them. Undoubtedly, there could exist a significant deal of unnecessary care (Lowsky et al., 2018). Take a case whereby a middle-aged woman pays for a mammogram fee of $250. Higher chances are that the results of the test will turn out negative, and the client will clear any doubts she may have concerning the state of health. However, if she values an assurance at only $50, she can still pay for the incentive to get another free test. This scenario implies that the $200 is equivalent to socially wasteful spending. Alternatively, if the health insurance company lets her manage the money, the possible inference is that when she spends the dollars, the care she will have access to will be equivalent to the worth of the cash (Peter et al., 2015). Hence, anyone with expertise in economics can attest that this argument is valid and appealing. Setting a medical account using the premium savings will play a pivotal role in accessing quality healthcare by helping people to save part of their money to cater to complications that may arise in the future.

Therefore, it is evident that the proposed policy change is worthy and will provide more benefits to all Medicare recipients by encouraging them to pay lower premiums and save the extra amount in a medical account. I hope the measure will contribute significantly to increasing access to quality healthcare. In case you have any questions, kindly let me know.

Best Regards

(Your Name)

References

HealthCare.gov. (2019). High Deductible Health Plan (HDHP). https://www.healthcare.gov/glossary/high-deductible-health-plan/

Henderson, J. W. (2017). Health Economics and Policy. Cengage Learning. https://books.google.co.ke/books?

Hudson, S., Perigo, D., & Oeding, J. (2017). An assessment of high deductible health plans and affiliated savings accounts in the current market. International Journal of Healthcare Management, 12(2), 131-136. https://doi.org/10.1080/20479700.2017.1336873

Lo Sasso, A. T., Shah, M., & Frogner, B. K. (2010). Health Savings Accounts and Health Care Spending. Health Services Research, 45(4), 1041-1060. https://doi.org/10.1111/j.1475-6773.2010.01124.x

Lowsky, D. J., Lee, D. K., & Zenios, S. A. (2018). Health Savings Accounts: Consumer Contribution Strategies and Policy Implications. MDM Policy & Practice, 3(2), 238146831880937. https://doi.org/10.1177/2381468318809373

Peter, R., Soika, S., & Steinorth, P. (2015). Health Insurance, Health Savings Accounts, and Healthcare Utilization. Health Economics, 25(3), 357-371. https://onlinelibrary.wiley.com/doi/abs/10.1002/hec.3142