The Affordable Care Act, Auto Insurance and Workers’ Compensation Insurance

  Question 1 

The Affordable Care Act requires that insurance companies do not deny insurance to anyone. They are expected to offer coverage to everyone if they are to benefit from the industry. This requirement is proper and necessary to help people with pre-existing conditions get treatment at an affordable cost. Due to this requirement, people with chronic illnesses would receive the care they need at a much lower charges than if they were to pay for it directly from their pockets. Before the introduction of the Affordable Care Act, most insurance companies had preferred to ensure people who were healthy and denied insurance to people who were already sick or have any pre-existing conditions such as heart diseases, diabetes, cancer, and other chronic illnesses ( Gruber, 2011 ). The primary reason why the health insurance companies denied them insurance was because their health costs were too expensive compared to the healthy people and they assumed that this could make the companies run at a loss or even reduce their profits. However, if they were insured, they either had to pay a higher premium or have the pre-existing conditions be exempted from the cover. As a result, millions of Americans failed to get covered making them undergo high costs of treatments. 

Nevertheless, the Affordable Care Act has made it mandatory for insurance companies to ensure everyone irrespective of them having any pre-existing condition. This has made it easy for people suffering from chronic illnesses to get access to treatment at a manageable cost. Initially, without the ACA, they would not afford treatment. The requirement of the Affordable Care Act thus helped improve the health outcome of millions of people who could not receive treatment before. At the same time, insurance companies have not been negatively affected by their profitability by being forced to insure people with pre-existing conditions. This is because, despite such patients having higher costs, ACA has mandated that all insurance companies must offer insurance to everyone. This mandatory coverage sends more healthy people to buy the coverage, and in most cases, such customers do not submit claims. The insurance companies can then recover the high costs of treating patients with pre-existing conditions from the premiums paid by healthy customers whose health costs are low. Therefore, this requirement by the ACA is necessary because while it allows people with chronic illnesses to access treatment at an affordable price, it does not affect the financial health of the insurance companies in any negative way. 

Question 2. 

The requirements by the states for the automobile owners to provide auto insurance are a proper mandate. This is because the purpose of the automobile insurance is to provide coverage to the damages that automobile could cause not only to the individual owner but also to the third parties, including bodily injury and destruction of property ( Weiss, Tennyson & Regan, 2010 ). The limit within which the liability of such insurance is issued is usually stated. The minimum automobile insurance policy protects the insured when he/she is driving the automobile. The coverage can also be expended to cover third parties and their properties in case there is an accident. The insurance usually covers the medical costs for the injuries cost to the owner of the automobile and the third parties. This ensures that in case of an accident, the occupants of the automobile will not have difficulty paying for the treatment costs because the insurance company will incur such charge. Also, any damage to the property will also be covered to some extent as agreed in the contract. Therefore, this policy is useful because it removes the liability from the owner of the automobile to the insurance company. 

The owner of the automobile can also expand the coverage to the third party drivers who drive the automobile from the permission of the owner. This may, however, attract additional premiums. In the automobile coverage, the owner may obtain insurance that will cover for the cost of medical services to himself as well as to another driver or any other third party. This ensures that whenever there is an accident, the covered people get relieved of the liability to pay medical bills as the insurance company takes this. Individuals injured in an automobile usually expect the insurer to recover their injury and loss. It is essential that people who operate automobiles either for private use or for carrying passengers to get insured so that when an accident occurs, the insurance company will cater for the injuries and damages to property caused by the automobile. This will relieve the owner of the automobile from having to incur costs to compensate for the injured third parties. 

Question 3. 

The purchase of the Workers’ Compensation Insurance by the employers is a good policy. This is because sometimes employees can get injured in the course of their work and it should be the responsibility of the employer to cover for their medical costs as well as compensate them. All states have enacted laws that require the employers to purchase workers’ compensation insurance so that when there is an injury to an employee, he/she can be compensated from such insurance cover. Under this system, an injured employee is required to submit a claim to the right channel for the determination of the injury and payment of the loss ( Rejda, 2011 ). While the employees cannot sue the employer for remedy because of the exclusive nature of this policy, they can always give a claim for the compensation. This is a good policy because it covers the employees from injuries that arise when they are on the course of their work. This relieves them of the costs of seeking medical attention because this coverage pays for their treatment costs. It is rightful and just for the employer to compensate the employee who gets injured in the course of duty because, at such a time, the employer is entirely responsible for the welfare and safety of the employees. 

Employers are entirely responsible for the safety of the employees, and appropriate safety mechanisms must be put in place to minimize the risks of an accident. If an accident occurs and the employee is injured, the employer must take full responsibility for the compensation to the employee. This policy promotes fairness to the employees at the workplace while also ensuring that the employer takes proper measures to ensure that the working environment is safe and free from injuries. The insurance covers the employee’s liability when there is injury or death to the employee when on duty. The employer is not allowed by law to make any deductions from the employee’s income to cover up the liability but must be compensated from the funds under insurance. This policy does not violate the rights of the employers, but instead it protects the employees from being mistreated by the employer while also avoiding the dangers that occur when an employee gets an injury while at work. However, the employer is expected to put up safety mechanism which employees are required to adhere to see that the incidences of injuries are minimized. This will ensure that insurance companies do not incur a lot of costs in compensating the injured employees. This policy is consistent with the core values of respect and protection of the community from any harm or injury that may arise. 

Question 4 

The requirement that the licensed professionals have a professional malpractice insurance cover is an important policy because it can benefit them in many ways. In the current society, people can be so quick to file lawsuits whenever they feel something is wrong. Whether there was something wrong or not, the professionals will have to incur legal costs to prove wrong in such a lawsuit. This can lead to financial devastation for these professionals. The malpractice insurance protects these professionals by covering the legal fees as well as protection of personal properties. Professionals such as doctors can be sued for negligence, errors, poor services, and misrepresentation ( Baker & Swedloff, 2012 ). The insurance will offer protection whether one is in fault or not and this can relieve the professionals of the substantial legal costs that can render them bankrupt. The malpractice insurance is, therefore, necessary to help such professionals from financial devastation that may arise from legal suits. 

Also, it is the nature of human to make mistakes. Professionals can unknowingly make errors that could have adverse effects on their career or even be harmful to their clients. Under this situation, the malpractice insurance policy will protect them from losing their jobs by helping them eliminate costs issues that may pose a threat to their career progress. At the same time, there is always insufficient cover by the employers, and the malpractice can act as an additional cover for the professionals in the event of such a need. Hence, the government does not abuse the malpractice insurance policy but instead it is a vital provision that should be implemented by all states to help protect the career of the professionals. It ensures that whenever there is a lawsuit against any professional, they are protected by given lawyers to represent them in courts. 

References 

Baker, T., &Swedloff, R. (2012). Regulation by Liability Insurance: From Auto to Lawyers Professional Liability.    UCLA L. Rev. ,  60 , 1412. 

Gruber, J. (2011).  The impacts of the Affordable Care Act: how reasonable are the projections?  (No. w17168). National Bureau of Economic Research. 

Rejda, G. E. (2011).  Principles of Risk Management and Insurance . Pearson Education India. 

Weiss, M. A., Tennyson, S., & Regan, L. (2010). The Effects of Regulated Premium Subsidies on Insurance Costs: An Empirical Analysis of Automobile Insurance .  Journal of Risk and Insurance ,  77 (3), 597-624.