Many studies have been conducted to find out the relationship between the demand for health care services and the variations in the insurance cover of the citizens of a nation. The studies vary in findings but the common feature of these studies is that the demand for medical care varies with the changes that take place in the insurance policy. There has been a widespread campaign for an increase in the insurance cover. The result has been a significant increase in the cost of medical care and this is one of the reasons for the budget deficit. Contrary to the common belief, an increase it insurance coverage ultimately increases hospitalization and the net cost of medical care (Huang, 2011).
The Distinction between Demand for Insurance and Demand for Medical Care
The rise of the medical care cost in the world is attributed to a higher demand of insurance coverage by the citizens (Devoe et al, 2007). As the world advances, more and more health risks emerge. People have begun to realize that the risks posed on their health are causing more demand for health care. Basically, the demand for healthcare simply means the number of visits a person makes to the health physician in demand for health services. It also translates to the number of services a physician is willing and able to offer patients based on their insurance cover. The demand of these services is closely related to the demand for insurance cover.
The realization of the risks involved has led to a higher demand for insurance cover among the vast population. The insurance cover is mainly used to minimize the out of pocket costs incurred by a person while seeking medical services. With the increase of the cost of medical care, the necessity of insurance cover has grown immensely.
The Influence of Insurance Cover on the Demand for Health Care
Studies have linked the demand for medical care to the level of insurance cover. Due to the minimized costs directly paid to the physician, the number of visits by patients to the medical physician increases almost on a double standard (Huang, 2011). This is actively given by the insurance cover that reduces the out of pocket costs such as ambulance fee as well as the cost of medicine. Those who have an insurance cover are more prone to demand for medical care. The demand does not just end at the increase of the personal visits made to the physician; the number of health services demanded also increase on a double standard.
There is another niche of the population that prefers to pay directly out of their pockets due to the uncertainty of health risks. This group of patients is observed to pay a less number of visits to the physician per year as compared to the insured people. The major reason for the significantly reduced demand for medical care of these people is the high cost of uninsured medical care. Insurance provided by the employer is one of the most common insurance cover. The introduction of Medicaid and Medicare to cater for the insurance cover of the poor has significantly increased the demand for health care among the poor (Helms et al, 2008). Insurance policies such as the Health Maintenance Organizations (HMOs), deductibles, co-payments and co-insurance gives patients a number of options and have resulted to a higher demand for medical care as well as a higher cost of medical care.
The history of insurance has advanced and so has the demand for medical care. The high demand of medical insurance cover is attributed to the increase in risks. The widespread of insurance cover has resulted to a high increase in the visits made by patients to the physicians.