What Is Health Insurance?
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.
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, health insurance is commonly included in employer benefit packages and seen as an employment perk.
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, fire fighters, street lighting, and public road networks, as a part of a public service for the nation.
In other countries, such as the 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.
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
Two broad types of health insurance or health coverage
Broadly speaking there are two types of health insurance:
§ Private health insurance - the CDC (Centers for Disease Control and Prevention) says that the health care system is heavily reliant on private health insurance. 58% of people have some kind of private health insurance coverage.
§ Public (government) health insurance - for this type to be called insurance, premiums need to be collected, even though the coverage is provided by the state.
Therefore, the National Health Service (NHS) in the United Kingdom is not a type of health insurance - even though it provides free medical services for its citizens, it does not collect premiums - it is a type of universal health coverage.
Examples of public health insurance is Medicare, which is a national federal social insurance program for people aged 65+ years as well as disabled people, and Medicaid which is funded jointly by the federal government and individual states (and run by individual states), SCHIP which is aimed at children and families who cannot afford private insurance, but to not qualify for Medicaid.