I. Introduction a. Brief review of the concept of healthcare reform b. A thesis statement
II. Effects of healthcare reforms on an insurance industry a. Reduces company’s profit margins b. Reduces company’s administrative costs
III. Conclusion
IV. Works Cited
Healthcare reform affects patients, healthcare providers, government spending and biomedical researchers. A good healthcare reform should be cost effective in its implementations and affordability. In my view, any reform in the healthcare sector should be that, which widens the population that receives insurance coverage, diversifies and minimizes the cost of healthcare, protect the right patients and physicians as well as improves accessibility and quality in order to eliminate strikes of healthcare givers and suffering of patients. Although healthcare reforms should aim at fairness and sustainability, high costs of medical coverage and economic impacts on insurance companies are the major effects of healthcare reforms.
Healthcare reforms have affected the profit margins, administrative costs, membership growth and medical management and expenses of insurance companies. The attempt by the insurance companies to strive to remain relevant in the business by providing adequately medical coverage only results to a lot of risk and adverse selection. In this case, majority of the members covered under the insurance scheme are sick, making the companies to pay out medical expenses exorbitantly. Thus reduces the entire profit margin of the companies. In fact, according to Moffatt, the efforts to minimize the risks through provisional exclusion and lifetime benefits only compel the companies to incur more risks. Ideally, since majority of the insurance takers are sick people, adverse selection can easily kill an insurance company.
Since healthcare reforms require the