Introduction
Insurance companies are under the management principle of self-responsibility, whereby their main creditors are policyholders. Insurance, in general, entails spreading the risks. Everyone has a risk or a chance of suffering from a major illness. In insurance, individual risks are spread among other people to make sure if they occur, the risk bearer will not be overwhelmed (Rotarius & Liberman, 2000). A surgery that would cost $50000 once can be paid in a few hundred dollars as a monthly premium, which is spreading the risks in insurance for a longer period.
Consideration when choosing an insurance company
Moreover, before a healthcare organization chooses an insurance company, there are several key factors and policies which it has to consider. It’s important to be acknowledged by the insurance company the amount of premium they would expect every month. An insurance company should have a complaint mechanism to process and resolve grievances as quickly as possible. There should also be prompt and effective management. Before the health plan starts some insurance companies ask for some amount which the healthcare organization should enquire for before entering into a contract (Boone, 2000). This would assist the organization to get fully prepared as the time for agreements with the insurance company comes. The amount of money to be charged on doctor’s visits and for prescriptions for some common illnesses which also be a factor to be considered before choosing the right insurance company. If there is any limit of money that the health plan may not exceed within one year the healthcare organization should seek to be informed in advance.
All the types of health services which may not be covered due to one reason or the other is a factor to be put into consideration before the organization makes the final decision. In some insurance companies, serious illnesses like diabetes always come with some complications, the coverage is provided after six months or more which should be enquired in advance (Haugh, 2000). If the organization has got some specific doctors, they should enquire whether they are included in the health plans provider network. The history of the health plans provider is also an important factor to be considered.
Workers compensation and liability insurance
Workers compensation insurance is a requirement by the state in case an employer has got w2 employees. This type of insurance covers the employee’s medical and disability expenses which are work-related illnesses. In some states, an employer must cover his/her 1099 contractors (JCAHCO, 2006). On the other hand liability insurance caters for the other party’s losses only, an individual and his properties are not protected but he is protected from responsibilities arising from the other party’s harm.
Claims made and occurrence policies
Claims made and occurrence are both liability policies but with few differences. An occurrence liability policy is whereby the insured is provided with liability insurance protection within the policy period despite when the claim is reported. As long as the incidence took place within the policy period it’s considered liable (Bailey, 2000). This policy is considered to create uncertainty for both policyholders and the insurance company. The claims made policies protect the insured against an incident only if it’s reported when the insurance policy is essential in force. This type of policy covers the insured for incidents that in case occur even before the stated date of this policy. Those incidences which occur before the effective date are covered through prior act coverage but it’s only offered to the insured with claims made policies.
Reference List
Bailey, T. C. (2000). Real-Time Notification of Medication Errors. Health Management Technology 21 (6), 24.
Boone, E. (2000). Challenges and Solutions in Medical Professional Liability. Rough Notes 143(2); pg. 36.
Haugh, R. (2000). To the rescue. Hospitals & Health Networks 74 (4), 44.
Rotarius, T. & Liberman, A. (2000). Professional liability insurance for health care organizations – several significant considerations. The Health Care Manager 19(1), 59.
Joint Commission on Accreditation of Health Care Organizations (JCAHCO). (2006).