Posted by Health insurance is a type of insurance that helps to cover the cost of medical expenses, including doctor visits, hospital stays, and prescription medications. In the United States, health insurance is often provided through employers or purchased individually. The importance of having health insurance cannot be overstated, as it can protect individuals and families from financial ruin in the face of unexpected medical expenses. In this article, we will explore the basics of health insurance, the different types of plans available, and the reasons why it is essential to have health insurance.
What is it?
Health insurance is a contract between an individual and an insurance company. The individual pays a monthly premium, and in exchange, the insurance company agrees to pay for a portion of their medical expenses. The specifics of each plan can vary widely, but most health insurance plans cover doctor visits, hospital stays, emergency room visits, and prescription medications. Some plans may also cover other medical expenses, such as dental or vision care.
Health insurance can be purchased through an employer or purchased individually. Employer-sponsored health insurance plans are typically cheaper than individual plans, as the employer will often cover a portion of the premium. However, if an individual is self-employed or does not have access to employer-sponsored health insurance, they can purchase individual health insurance plans through the Health Insurance Marketplace.
Why purchase it?
There are several reasons why having health insurance is important. The most obvious reason is that it helps to cover the cost of medical expenses. Without health insurance, the cost of medical care can be prohibitively expensive, leading to financial hardship and even bankruptcy for some individuals and families.
Without health insurance, individuals face significant financial risks in the event of a medical emergency. In 2019, the average cost of a three-day hospital stay was approximately $30,000, according to the Healthcare Financial Management Association. Additionally, an ambulance ride can cost anywhere from $500 to $1,000 or more, depending on the distance traveled and the level of care required.
The financial consequences of a medical emergency can be devastating, with studies showing that medical bills are a leading cause of bankruptcy in the United States. In fact, a 2019 study by the American Journal of Public Health found that approximately 530,000 families each year file for bankruptcy due to medical debt.
Furthermore, not having health insurance can also have negative effects on one’s overall health. Without access to preventative care, individuals may miss out on routine check-ups, screenings, and immunizations, which can lead to undiagnosed or untreated conditions. This can result in more serious and costly health problems down the road.
In addition to covering the cost of medical expenses, health insurance can also provide peace of mind. Knowing that you are covered in case of a medical emergency can help to alleviate stress and anxiety.
Types of Plans
There are several types of health insurance plans available, each with its own set of benefits and drawbacks. The most common types of health insurance plans include:
- Health Maintenance Organization (HMO) Plans: HMO plans require that you choose a primary care physician (PCP) who will be responsible for coordinating your care. If you need to see a specialist, you will need a referral from your PCP. HMO plans typically have lower out-of-pocket costs than other types of plans, but they also have more restrictions on which doctors and hospitals you can see.
- Preferred Provider Organization (PPO) Plans: PPO plans allow you to see any doctor or specialist you choose, without needing a referral. However, if you see a doctor or hospital that is not in the plan’s network, you may be responsible for a larger portion of the cost.
- Point of Service (POS) Plans: POS plans are a combination of HMO and PPO plans. Like HMO plans, you will need to choose a PCP who will coordinate your care. However, like PPO plans, you can also see doctors and specialists outside of the network, although you may have to pay more for this.
- High-Deductible Health Plans (HDHPs): HDHPs have lower monthly premiums than other types of plans, but they also have higher deductibles. This means that you will be responsible for paying a larger portion of your medical expenses out of pocket before the insurance company starts to pay. HDHPs are often paired with a Health Savings Account (HSA), which allows you to save money tax-free to use towards medical expenses.
The Affordable Care Act
The Affordable Care Act (ACA), also known as Obamacare, was signed into law in 2010, making health insurance more accessible to Americans. The ACA includes provisions such as the requirement for all Americans to have health insurance, subsidies to help low-income individuals afford coverage, and protections for those with pre-existing conditions. While the ACA has been a controversial topic, it has undoubtedly increased the number of Americans with health insurance coverage.
Medicare
Another type of health insurance is Medicare, which is a federal program that provides health insurance to Americans who are 65 or older, as well as certain younger individuals with disabilities. According to the Kaiser Family Foundation, in 2020, there were approximately 63 million people enrolled in Medicare, making it one of the largest health insurance programs in the country.
Healthcare in the United States
The cost of healthcare in the United States is notoriously high, with Americans spending more per capita on healthcare than any other developed country. Without health insurance, the cost of healthcare can be a significant burden on individuals and families. According to a report from the Kaiser Family Foundation, the average cost of a hospital stay in 2018 was $13,767. Additionally, the average cost of an emergency room visit was $1,389, and the average cost of a doctor’s office visit was $267.
In conclusion, health insurance is a crucial part of ensuring that individuals and families have access to affordable healthcare. There are several different types of health insurance, including employer-sponsored plans, individual plans, Medicaid, and Medicare. The Affordable Care Act has increased access to health insurance for many Americans, while Medicare provides coverage for older Americans and those with certain disabilities. Without health insurance, individuals may face significant financial burdens and negative health outcomes. Therefore, it is important to consider the different options for health insurance and choose the most appropriate plan.
References:
Blewett, L. A., Johnson, P. J., Mach, A. L., & Fordyce, M. A. (2020). The Affordable Care Act and Health Insurance Coverage in the United States for 2019. National Center for Health Statistics.
Healthcare Financial Management Association. (2019). Hospital Cost Estimator.
Himmelstein, D. U., Lawless, R. M., & Thorne, D. (2019). Medical Bankruptcy: Still Common Despite the Affordable Care Act. American Journal of Public Health, 109(3), 431-433.
Kaiser Family Foundation. (2021). Key Facts About the Uninsured Population.
National Association of Insurance Commissioners. (2021). Understanding Health Insurance.
Sommers, B. D., & Gawande, A. A. (2017). Health Insurance Coverage and Health—What the Recent Evidence Tells Us. New England Journal of Medicine, 377(6), 586-593.
Zambrano, M., & Vargas-Bustamante, A. (2019). Health Insurance Coverage and Utilization of Health Services among US Adults Aged 18-64: National Health Interview Survey, 2017. National Center for Health Statistics.