Jan Schakowsky said, “Without health insurance, getting sick or injured could mean going bankrupt, going without needed care, or even dying needlessly.” We often underestimate the importance of health insurance, considering that it protects our health as well as the health of our loved ones. Read on to learn more about the specifics of health insurance.

What is health insurance?

• Health insurance, essentially, is a protection against the expenditures related to medical as well as surgical expenses.

What are the various ways to purchase health insurance?

• Health insurance policies can be purchased as social insurance or social welfare funded programs by the government or can be privately purchased insurance.
• In social insurance, resources are pooled, and the financial risk associated with the expenditures of medical services are spread throughout the population to guarantee protection for every individual.
• Similar assistance is given by social welfare programs for people who are not in a position to bear the expenses of medical services.
• In many countries like the United States of America, health insurance is seen as an employment perk as it is included in the employer benefit packages.
• However, such people lose their health care benefits or health care insurance coverage when they are unemployed, or when they change their job.

Who pays for medical expenses under health insurance?

• Healthcare provider is a term that describes the doctor, health care practitioner, laboratory, pharmacy, clinic or hospital that provides treatment to an individual.
• The person who has purchased the health insurance is called the insured.
• Depending upon the health insurance, the insured may bear the medical expenses out of their pocket initially, and they may get a refund for this amount later. In some cases, the insurer pays the entire amount directly to the healthcare provider.

What are the different types of health insurance coverages?

• Depending on the type of health insurance that an individual has taken, the level of treatment received at the emergency department differs considerably. There are two main categories of healthcare insurance — private health insurance and government health insurance.
• Private health insurance: The Centers for Disease Control and Prevention states that the healthcare system of the country is highly dependent on private health insurance. The National Health Interview Survey asserts that around 65% of individuals in the country who are below the age of 65 have some form of private health insurance.
• Government or public health insurance: Medicare, Medicaid, and the Veterans Health Administration are some prominent examples of public health insurance. In this type of health care insurance, the government reduces or subsidizes the healthcare cost in exchange for a premium.

What are other healthcare insurance plans?

• Managed care plans: In this healthcare insurance plan, the insurer forms contracts with several healthcare providers to give the least expensive medical treatment to the insured. Out-of-network clinics and hospitals are subject to additional expenses and penalties. However, the insured patient will still receive treatment. Therefore, if the health insurance plan is more expensive, its flexibility also increases to be on par with the on-network hospital or clinic.
• Fee-for-service or indemnity plans: In this type of health insurance plan, all insured people are provided with equal healthcare treatments. The insured can also choose the place of treatment as per their preference. As a coinsurance, the insurer pays 80% of the total medical and surgical expenditure, while the remaining costs are borne by the insured.
• Health Maintenance Organizations (HMO): Among all other types of health insurance plans, this is the cheapest. Healthcare is provided directly to the insured under these organizations. All the required care is coordinated by the physician who is linked to the policy offered by such organizations. These organizations fund only those treatments that have been prescribed by this physician. Each medical service is associated with a fee to reduce unnecessary medical expenditure.
• Preferred provider organizations (PPO): This health insurance plan shares some similarity with the indemnity or fee-for-service health insurance plan. Under this health insurance plan, the insured can visit any doctor of their choice for treatment. The preferred provider organization provides negotiated costs with its network of selected healthcare providers. The insurer in this health insurance plan will pay a lesser amount for the treatment provided by out-of-network hospitals or clinics. Policyholders of the preferred plan organization can refer their case to the doctors themselves, without having to visit a primary care physician.
• Point-of-service (POS) plans: These plans are a combination of preferred provider organization and health maintenance organization. In this healthcare insurance plan, the insured has the opportunity to choose between all treatments coordinated by a single primary care physician, or the on-network insurance health providers, or any health providers outside the network.