Deductibles, co-payments and co-insurance components of health insurance reduce the moral hazard by increasing the amount of out-o-pocket spending of the insured. This cost implication on the insured reduces the incentive to consume the insurance and make a claim. 5. Protect businesses financially from risks that might otherwise have caused their collapse. These businesses are part and parcel of the society as they are source of livelihood for many. It acts as a stress relieve to those insured. Worries about incurring losses, health care cost and education cost are reduced through getting the relevant insurance covers.
Economic stimulation- insurance facilitates businesses continuity and at the same time it contributes to economic growth through its investments. Cost descriptions Purchase of health care insurance package comes with some cost implication. Premiums are the most dominant. Different health care polices attract different amount of premiums. Age, state of health and the family history affect the premium rating. Other pertinent cost is the deductibles, co-insurance and co-payments. Deductible is the initial amount of payment that will be paid by the insured before the insurer can come in. Co- insurance is an arrangement where the insurer covers some part of the risk. Co-payment is the amount paid directly to health service provider.
- Winter '17