Page 312 - Ebook health insurance IC27
P. 312
The Insurance Times
The payment of fraudulent claims results in higher premiums to all insured persons.
Theses extra costs fall directly on society.
Inflated Claims
Many claims are inflated because of insurance. The loss may not be intentionally caused
by the insured, but the claim may be inflated. In other words, it may exceed the actual
financial loss experienced by the insured.
A number of examples can be given. A surgeon may charge above-average fees for
surgical procedures covered by a patient's medical insurance policy. Others might
prescribe unnecessary procedures for the sake of revenue maximization.
These inflated claims must be recognized as an important social cost of insurance.
Premiums must be increased to cover the losses, and disposable income that could be
used for the consumption of other goods or services is thereby reduced.
In summary, the social and economic benefits of insurance appear to outweigh the
social costs. Insurance reduces worry and fear, the indemnification function contributes
greatly to social and economic stability, economic security of individuals and corporate
is preserved and from the insurers prospective, objective risk in the economy is
reduced.
The social costs of insurance can be viewed as the sacrifice that society must make to
obtain the benefits of insurance.
316 Guide for Health Insurance
