What is health insurance?
Health Insurance is a type of insurance coverage that pays for medical and surgical expenses of the insured. It is typically included in the employer benefit packages to attract qualified professionals. The cost of health insurance depends on the health plan or the policy. In health insurance terminology, the “provider” is the clinic, hospital, doctor, laboratory, health care practitioner, or pharmacy, while the “insured” is the owner of the health insurance policy; the person with the health insurance coverage.
Generally speaking, there are two main types of health insurance:
- Private Health Insurance
- Public Health Insurance
Private Health Insurance
According to CDC (Centers for Disease Control and Prevention) US health care system is heavily relying on private health insurance. In fact about 58% of Americans have some private health insurance coverage.
Private health insurance is usually offered or provided by either employers or organizations. Some employers may only offer one type of health insurance plan, while others can allow you to choose from more than one options. Buying health insurance on your own may cost more than getting a plan through an employer because you pay for your health plan rather than sharing the cost with the employer.
Public Health Insurance
Public health insurance is usually paid, collected or supported entirely by the government funds. There are several different public health insurance options available in each state however with strict eligibility requirements.
Examples of public health insurance options in the USA are:
- Medicare – federal public health insurance for people aged 65+ years including disabled people,
- Medicaid – funded jointly by the federal government and individual states (and run by individual states) specifically for low-income individuals and families,
- Children’s Health Insurance Program (CHIP) is a low-cost public health coverage for children and families who earn too much money to qualify for Medicaid but are unable to afford private health insurance.
Other public health insurance programs in the USA include TRICARE, the Veterans Health Administration, and the Indian Health Service.