Economics Simulation Paper
In today’s work world it is makeup of diverse individuals which strives towards a successful outcome. However, working for a small or large company, individuals are looking forward to meeting the needs of the organization. In order to meet the needs of the organization, employees are to be in rivalry with hourly and salary wages. In additions to the hourly and salary wages, individuals are often attracted by organization benefits which usually consist of employee searching for discounts in 401k retirement plans and cheaper life insurance.
The attractions to employees are health care insurance benefits, which usually includes comprehensive medical, dental and vision plans for individuals and their family members. Therefore, health care is considered a goods and service which has a high demand in the economics refer to consumers making rational choices to maximize utility, the intentions of this paper is to clarify the beneficial health care plans offered to Castor Collins Health as a group resulting from the Simulation review. In this selections which are chosen will clarify the Maximized profits and minimized risks from the reasons for choosing certain planning.
Organizations are requiring health care benefits which are important to employees. It is beneficial to both employers and employees if any accidents, injury, burglary, or fire. It maintains the employee status for the organization. Economics play an immense role in selecting the correct health care plans which the organization ensure the plans offered accommodate their needs, meeting the standard which is requirements, and are cost-efficient. Corporate owners recognize the importance of developing a plan with the health care insurance provider which can maximize profits and minimize risks for the organization.
The HMO’s is known as Health Maintenance Organizations, which preferred as a health plan used by different organizations. Castor Collins Health has chosen a representative for the company, to address the status which was selection against the other. In, 1999 Castor Collins was founded as a health plan as a regional HMO in the state of Pantome. The health insurance and health care services which are provided to over 100, 000 enrollees through its statewide network which consists of physicians and hospitals, which utilizes a capitation model to pay its network of health care providers.
The company is not satisfied with the current number of enrollees and is looking to increase its numbers significantly. The Vice President and Strategy and Financial Planner at Castor Collins, goals are to come up with some type of beneficial health insurance plan to meet the growing needs of the organization. The organization was approached by two groups of individuals which providing health insurance. However, between the groups there are a difference in employees by 600 people and a maximum premium willing to pay by five hundred dollars. Both groups do not have employer insurance; however, they both must pay for their own insurance.
“The group ConstructIt consists of 550 men and 450 women between the ages of 26 through 42 years. About 60 percent of the group is married” (University of Phoenix, 2013); therefore, the spouse and children of the employees must be considered when making a decision. “Thirty two percent of the individuals at ConstructIt have a work profile which consist of great physical activity, twenty five percent consist of moderate physical activity, and the remaining forty three percent is highly involved in sedentary activities” (University of Phoenix, 2013).
Because the health care market is complex due to uncertainty on the supply and demand side, moral hazard, and adverse selection, the process of decision making for selecting proper health plans are more complex. The plans offered to Castor Collins Health are significant; however, only one can be chosen. Option one, Castor Standard does not cover pre-existing and option two, Castor Enhanced does cover pre-existing medical conditions. Castor Enhanced Minor is a third option which is customized. Therefore, about 38% of the employees are not a major risk for the organization.
However, 18% of the employees smoke cigarettes and 13% suffer from respiratory illness. Although, obesity is a risk factor for the organization which about 39% of the employees suffer from obesity and are considered a risk for other illnesses which is connection to obesity. The simulation shows ConstructIt to have less medical issues with their employees than E-Editor as a low rationale for pre-existing conditions; however, the Castor Standard plan appears to be beneficial since it does not cover pre-existing medical conditions for the organizations.
Order to charges the premium the Annual Earnings is $3428 for ConstructIt, which is much less than E-Editors. This risk is lower for providing this plan and unfortunately the returns are as well. It seemed to be a better option for the employees. Therefore, no plans were selected for the other group because the rates would have been immerses higher because the employees had more issues and conditions. The premiums would have been immerses higher and they would be more reluctant to pay them.
Therefore, in the health care industry it is very demanding; however, it is often difficult to meet the needs of each individual when providing benefits in the workplace. Healthy employees bring success to the workplace. If employees can maintain their health on the job, it would be sufficient to provide beneficial insurance packages to each individual and their family members. This simulation helped to enhance the decision making process for a enormous company by determining which insurance plans were appropriate based on the needs of the organization and its employees.