Third-Party Payment Distortion of the Healthcare Market Discussion comment

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  • Answer this discussion with opinions/ideas creatively and clearly. Supports post using several outside, peer-reviewed sources.
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To Comment:

Third-Party Payment Distortion of the Healthcare Market

The healthcare market is distorted by third-party payments due to the increase in demand, causing an increase in health care costs (Buff & Terrell, 2014).  With more people being covered under some sort of health insurance plan as a result of the Affordable Care Act (ACA), more are seeking medical services, and inadvertently causing medical costs to rise in response to the greater demand.  It only makes sense that someone who couldn’t afford health insurance before the ACA, would now want to utilize what they are required to have now.  For example, someone who did not have health insurance before may not have gone to see a doctor for a cold because of the high cost that they would have been responsible to pay for on their own, may now go to a doctor simply because they would only have to pay a portion of the overall cost.  Plus, many insurance policies cover preventative care services completely, which also adds to the rise in demand.

Wealthy Countries Third-Party Intermediaries

Although there are many differences in the health insurance policies between the United States and other industrialized, wealthy countries, the use of third-party insurance intermediaries are generally not one of them. Third-party insurance intermediaries help to control medical costs that limit the eligible amount of provided health care expenses for reimbursement by what is known as global budget payments (Ridic, Gleason, & Ridic, 2012).  Global budgeting seems to be successful in the majority of wealthy countries because of how their health care and insurance policies are set up and reinforced.  In most of these countries, the government is the major entity responsible for paying the hospitals and those medical professionals providing medical services (Wolfe & Moran, 1993).  This system helps to contain the rise of medical costs.

Elder Citizens Payment Program

The United States’ population of the elderly are covered by Medicare, an insurance program set for those the age of 65 years old and older.  This program is protected by AARP and offers hospital and physician insurance coverage, and exists because the elderly cannot be covered by commercial programs offered through employers, since the elderly are generally no longer employed at this age (Engel, 2016).  The elderly tend to be a population that need more medical care than those of a younger, working age; therefore need to be covered by some sort of insurance plan.  In part, this group has worked and paid into an insurance plan for the majority of their adult life.  Once they reach retirement age, they no longer are covered by their former insurance coverage through their employer, but need insurance coverage more than ever before.  And since they are not working, they no longer have the income to support private insurance premiums.  Medicare ensures that the elderly are able to get the medical services they need to thrive in their golden years.


Buff, M.J., & Terrell, T.D. (2014, Summer). The role of third-party payers in medical cost             increases. Journal of American Physicians and Surgeons, 19(2), 75-79.

Engel, J. (2016). Healthcare costs: Follow the money. In D.M. Nickitas, D.J. Middaugh, & N.      Aries. D. (Eds.), Policy and politics for nurses and other health professionals (2nd ed.),         pp. 257-258. Burlington, MA: Jones and Bartlett Learning.

Ridic, G., Gleason, S., & Ridic, O. (2012, April 15). Comparisons of health care systems in           the United States, Germany, and Canada. Materia Socio-Medica, 24(2), 112-120. doi:             10.5455/msm.2012.24.112-120

Wolfe, P.R., & Moran, D.W. (1993, Spring). Global budgeting in the OECD countries. Health     Care Financing Review, 14(3), 55-76.





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