Economic Issues

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Economic Issues Simulation

Understanding Economic Issues for HMO’s
Castor Collins Health Plan is a regional Health Maintenance Organization that has been contracted to provide health care coverage for Constructit and E-Editors. Castor Collins has to expand the coverage for another employee group by the name of Dearden. It is Castor Collins Health Plan’s goal to provide the necessary coverage, and still make a profit. At the time of renewal, Dearden’s policy will need to be reviewed and modified to add coverage and update if indicated to be profitable. The management team responsible for this review and implementation of coverage consists of the CFO, the Chief Medical Officer, and the Executive Vice President of planning and development, and the Vice President of strategy and financial planning. Constructit

The management team reviewed Constructit and its need for coverage. This company needs coverage for 1,000 employees and is willing to pay $4,000 in premium. The age group is 26-45 with 43% in a sedentary work style. The other 57% is active, either moderately or severe, in the workforce. The workforce under the age of 30 is 40%. The biggest obstacle for this group as there is a 39% obesity rate among the employees. The team reviewed both standard and enhanced policies for this group and decided that the customized policy best fits the need of Constructit. Under the Castor Enhanced minor policy, the basic needs of medical services under inpatient and hospital services are included except obesity care and sterilization. To be able to keep the premiums under the $4000.00 range the following services had to be excluded. These were outpatient services that included vision, hearing, and custodial care. These exclusions keep the premium under the $4,000 range that the company was willing to pay. The review team chose these exclusions based on the demographics of the company. The policy that includes obesity coverage would not be profitable for and...
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