One of the fundamental services that consumers need is health care the consumers demand. It is the economics that teach us that rational consumers make choices that aim at maximizing utility. This means that if one chooses to consume more chocolate despite that it is harmful to one’s teeth, it means the person perceives more utility in the joy of eating chocolate than in having healthy teeth (Chernew, 2009). Health care firms supply health insurance, and health care to the enrollee in such companies. They incur costs in doing that, but they earn revenue from their services of providing health insurance. It is from the information provided by the companies that make people choose or reject their services (Cheng & Ives, 2009).
E-editors comprise of 760 men and 840 women. All of them fall in the age of 35 and 54 years. Between the age of 35 and 39 years, there are 150 men and 170 women. Between the ages of 40 to 44, there are 174 men and 130 women. Between the ages of 45 to 49, there are 267 men and 245 women. Between the ages of 50 to 54, there are 169 men and 295 women. Total number of people in E-editors is 1600. Additionally, all of the members are married. They usually work for long hours. During this period, most of the time is spent sitting in front of the computer, and it is primarily sedentary. Out of one hundred people, ninety five of them have worked in other companies, and they have been doing the same work that they do in the current company that they join. The remaining five percent had jobs that did not require a lot of activities before their enrollment at E-editors (The Financing of Health Care, 2012).
There are health care factors that people experience in the company. Ninety five percent of people have more risk of stress related injuries (SRI), and vision problems. Twenty two percent of the whole group, that is, 170 men and 182 women have been diagnosed with no serious health risks. Twenty- six percent of men, which is similar to 198 men and thirty two percent of women, equivalent to 269, are heavy smokers. None of them suffer from respiratory problems despite their smoking habits (The-Financing-of-Health Care, 2012).
As a result of their sedentary lifestyles, their eating habits, and lack of adequate exercise, there have been several reported instances of obesity. Forty percent of the group, that is, 720 people, has suffered obesity. When the data is considered in terms of gender, 46 percent of men (350) and 44 percent of women (370) are obese. This is an indication of high risks of diseases such as diabetes, hypertension, high cholesterol, and cardiovascular diseases (The-Financing-of-Health Care, 2012).
The number of men suffering from high cholesterol is 304, and 294 women. The number of people with high blood pressure is 130 men, and 110 women. Arthritis has affected 68 men, and 76 women. The number of people suffering from diabetes amounts to 55, both men and women. Depression has affected 12 men, and 20 women. Finally, there are 7 men and 4 women affected by alcohol dependency. In that connection, E-editors, with its 1600 people is willing to pay a maximum annual premium of $4500, contrary to the ConstructiIt, which is paying $4000 (The Financing of Health Care, 2012).
The Castor Collins health plan was founded in the state of Pantome, as a regional HMO in the year 1999. It aims at providing health insurance, and care services that are related to health of those who enroll in it. Its services reach a wider network of physicians and hospitals. It uses a capitation model to pay its network of health providers. The company has so far enrolled approximately 100,000 people, and they are in the process of increasing the number (Chernew, 2009).
There is the Castor standard, Castor Enhanced, and Castor Enhanced Minor. Castor standard does not cover preexisting medical conditions, but Castor Enhanced does. In both plans, assessment of risks and expected costs and profitability is calculated differently. The calculation of the insurance premium is to be charged, and the profitability, depends on the risk that the company will occur in the process of providing insurance to a group. The cost of services offered, and their expected utilization by a group determines the risk estimates (The Financing of Health Care, 2012).
Both plans, however, can be adopted. Castor Standard and Castor Standard Minor can apply to the Constructit and E-editors respectively. Castor Enhanced or the Castor Enhanced minor is suitable for E-editors. This is because both plans include the preexisting conditions. Specifically, coverage for obesity for the E-editors should be provided because, the profile of their health suggests that they need the service. On the other hand, Castor Standard is appropriate for the Constructit. This is because the group does not have too many preexisting conditions or diseases (The Financing of Health Care, 2012).
Providing Castor Enhanced or Castor Enhanced minor is more risky than providing the Castor Standard plan. However, it could be more profitable. Though the risks of providing the Castor Standard are high, the relative low risk of providing Castor Enhanced Minor to those of the Constructit would cover the risk. As a Castor representative, I would provide one of these plans to the Constructit. Though the earning is greater for the E-editors because they are the larger group that is willing to pay the higher premiums than the Constructit, the risks occurring are also greater than in the case of the Constructit. This is to say, providing a system that will cover the preexisting conditions to E-editors, may not be sufficient at the premium, they are paying in return (The Financing of Health Care, 2012).