In a certain country, insurance companies pay only a fixed p

[jonvindjohnsen]

In a certain country, insurance companies pay only a fixed percentage - set by law and uniform across all insurance companies - of the fees actually billed by healthcare providers; the remaining balance is waived. Patients without insurance coverage, however, are legally responsible for the full amount of those fees. If the fixed percentage set for insurance companies is changed, healthcare providers will adjust their fees so that the insurance companies pay the same dollar amount that they would have paid before the change.

The information given most strongly supports which of the following general claims about the country described?


a) If the percentage prescribed by law for insurance companies is decreased, private patients without insurance coverage will pay more for healthcare services.

b) The dollar amount paid by insurance companies to healthcare providers will not change unless the legally specified percentage is changed.

c) If the number of patients without insurance coverage grows beyond the number of patients covered by insurance, healthcare providers will adjust their billing practices according to the needs of those patients.

d) If an economic recession causes the healthcare industry to suffer, the legally prescribed percentage paid by insurance companies will be increased.

e) Acquiring insurance coverage, if possible, would be a sound economic decision for any patient.

[jonvindjohnsen]

So, I can't understand why a) is correct.

If the healthcare bill was, say, $1000 and the insurance company pay $200 leaving $800 for the healthcare providers.

If the new percentage prescribed by law was 10%, then the insurance company pay $100. And the healthcare providers had to increase their billings to $900..

And the total sum would still be $1000 in both cases..

Hence, the patient with NO insurance would be paying the whole bill of $1000 in both cases as the dollar amount billed is the same.

How come the private patients have to pay more?

There is something I'm clearly missing so please help me with some insight.

[RonPurewal]

Hi,
It appears you're ignoring the statement about what the healthcare providers will do:

healthcare providers will adjust their fees so that the insurance companies pay the same dollar amount that they would have paid before the change

You've given numbers that are irrelevant, because they don't follow this mandate: you have the insurance companies paying 200$ the first time, but only 100$ the second time.
For your "plug-ins" to yield any insight into what's going on here, they actually have to follow the rules!

Let's adjust your numbers so that they actually follow the rules:
Take your first example: the bill is 1000$; the insurance company pays 20% = 200$.

Your second example (with 10% paid by insurance) must thus be adjusted so that the insurance company is still paying 200$. That means that the healthcare bill is now 2000$.

In the first case, patients who are paying out of pocket will owe 1000$; in the second, twice as much.

[PankajD885]

It seems that I am missing some implied information here. Why only private, non insured people have to give more. For instance, 'A' has an insurance while B do not. The insurance company pay 20% of the bill, So A's 200$ ll be paid by the insurance company and 800$ by me. And If B also have incurred the same charges and he is not insured, He is liable to pay full amount i.e. 1000$. Now the percentage is decreased to 10%, So now for A, the insurance company will pay 100 of the 1000$ amount, but since the health provider want to keep the bill for the insurance company same, it will increase the bill for A to 2000$ making the 10 percent to 200 without affecting the bill for B. Can you please explain how the argument is tackling this scenario as soon as possible? I have my exam in another 4 days :(

[tim]

Your main "question" appears to be "Why only private, non insured people have to give more." [sic] What you need to keep in mind is that this is actually stated in the argument. Your job in this question is to take the statements in the argument as a given and figure out which conclusion is inevitable.

[RonPurewal]

The insurance company pay 20% of the bill, So A's 200$ ll be paid by the insurance company and 800$ by me.

according to the passage, no one is responsible for the extra $800, since "the remaining balance is waived". if the insurance company is paying, the providers are stuck with $200.