UNDERSTANDING HEALTH INSURANCE
Health insurance is a good way to help an individual manage his/her health care costs.
He/she pays healthcare companies premiums – a set amount of money each month – and gets benefits to pay for his/her eligible health care expenses.
This can include regular doctor checkups or injuries to treatment for long-term illnesses.
The individual can purchase individual health insurance through the Health Insurance Marketplace. Even though it’s called individual health insurance, he/she can also find plans to cover his/her family.
Because health care can be expensive, it’s a smart idea to have health insurance so the individual prepared for when he/she or his/her family have medical needs.
Understanding Health Insurance
Health insurance is insurance that covers the whole or a part of the risk of a person incurring medical expenses, spreading the risk over a large number of persons.
By estimating the overall risk of health care and health system expenses over the risk pool, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to provide the money to pay for the healthcare benefits specified in the insurance agreement.
The benefit is administered by a central organization such as a government agency, private business, or not-for-profit entity.
According to the Health Insurance Association of America, health insurance is defined as “coverage that provides for the payments of benefits as a result of sickness or injury.
It includes insurance for losses from accident, medical expense, disability, or accidental death and dismemberment
In health insurance terminology, the “provider” is a clinic, hospital, doctor, laboratory, health care practitioner, or pharmacy.
The “insured” is the owner of the health insurance policy; the person with the health insurance coverage.
In countries without universal health care coverage, such as the USA, health insurance is commonly included in employer benefit packages and seen as an employment perk.
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Is health insurance coverage a human right or another product one can buy?
In some countries, such as the United Kingdom or Canada, health care coverage is provided by the state and is seen as every citizen’s right – it is classed along with public education, the police, firefighters, street lighting, and public road networks, as a part of a public service for the nation.
In other countries, such as the USA, health insurance coverage is seen somewhat differently – with the exception of some groups, such as elderly and/or disabled people, veterans and some others, it is the individual’s responsibility to be insured.
More recently, the Obama Administration has introduced laws making it mandatory for everybody to have health insurance, and there are penalties for those who fail to have a policy of some kind.
Everybody at some time in their life, and often on many occasions, will need some kind of medical attention and treatment.
When medical care is required, ideally the patient should be able to concentrate on getting better, rather than wondering whether he/she has got the resources to pay for all the bills.
This view is becoming more commonly held in nearly all the developed nations.
Health insurance is very complicated, and many people are overwhelmed and annoyed with the process. Here’s an explanation of health insurance, and how it got to be the dominant delivery vehicle for health care in America.
ALSO READ: Affordable/Cheap Health Insurance in America
The Real Purpose of Health Insurance
Since health insurance is the primary delivery vehicle for U.S. health care, people have lost sight of its underlying purpose.
It’s just like insurance for one’s car, home or apartment.
It’s supposed to protect one’s life savings from the devastating costs of a major accident, medical emergency or a chronic disease.
But, unlike other insurance, health insurance makes it possible for one to get that health care when he/she need it.
If the individual doesn’t have car insurance, he/she can take the bus until he/she can afford to get his/her car fixed.
If he/she break his/her leg, he/she can’t splint it until he/she saves up enough to go to the doctor.
Therefore, health insurance has two goals:
1) protect one’s assets
and 2) make sure he/she can get health care when he/she needs it.
That’s why most discussions about health care reform in the United States are really about making health care insurance available to more people.
Choosing Health Insurance Is Very Complicated
Health insurance companies provide lots of choices. But before one selects a plan, he/she has to wade through the various combinations of deductibles, copayments, coinsurance, and premiums.
Insurance companies charge deductibles, copays, and coinsurance to keep one from running to the doctor for every sniffle.
They were worried that, if health care were 100 percent free, their costs would skyrocket.
The Affordable Care Act mandated that one’s costs (deductible, copay, and coinsurance) can’t exceed an out-of-pocket maximum of $6,600 for individuals, or $13,200 for a family.
After that, the insurance company pays 100 percent.
All these choices make picking healthcare insurance very complicated. One has to be an odds-maker on his/her own health.
For example, he/she might be willing to pay a higher monthly premium for a lower coinsurance percent and/or deductible.
That would make sense if he/she has a chronic disease, like diabetes, and know he/she will be in to see the doctor frequently.
On the other hand, people who are usually healthy might want the lowest premium possible and a higher deductible. They are willing to take the chance of paying more for health care because they believe that chance is small.
Usually, the lower the deductible, the higher the premium, co-pay or co-insurance. As health care costs have grown, more people have opted for higher-deductible plans just to keep their monthly premiums affordable.
Health insurance is a type of insurance coverage that covers the cost of an insured individual’s medical and surgical expenses.
Depending on the type of health insurance coverage, either the insured pays costs out-of-pocket and is then reimbursed, or the insurer makes payments directly to the provider.