Risk Management In The Health Insurance And Medical Industries

By: Roberta Broyles

Health care insurance is the insurance that helps us get money for all of our medical expenses. When we go out and get a medical insurance policy we are offered cover by the company in lieu of a monthly or annual payment of some money by us to the insurance company. Health Cover means providing us money for all the expenses that we accrue due to our health condition.
Health care insurance is provided by the government at times or also by private insurance companies. The companies in question take money from all these individuals and this money is paid back to the individual after a time if he is afflicted by some medical condition.
If the insured falls ill during this time period, then the health care insurance company is liable to pay insurance money to the insured. Premium is the money that the insured has to pay in regular intervals to continue with the existing health policy.
Usually some or the other medical conditions are excluded from the list of ensured medical conditions. And finally there is the coverage limit. The coverage limit is the maximum amount of money a company is ready to pay when the insurer files the claim.
Now that we know what insurance is all about we can easily make a guess as to what will happen if too many people who are ill take insurance, pay the deductible and stake claims to the insurance company. If this happens then the company might just go bust.
This is risk that the company takes and in order to avoid the risk as far as possible it conducts health checkups of all those who are getting insured. The insurance company also charges a higher premium from people who are not in the best of their health or those who are old.
The premium that the insurer needs to pay every month or every year depends on these checks. An older person for example might have to pay a higher insurance premium as compared to a younger person as the older person has a greater chance of getting ill and hence applying for medical cover.
Risk management is the survival mantra for all health care insurance companies. A medical insurance company having the best risk management strategies in place is the one that flourishes best.

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