Medical Insurance

Medical Insurance

Medical costs or Medicare are rising day by day; inflation experienced in medical cost is higher than in clothing and foods. This is where medical insurance comes in. Medical insurance is an insurance coverage that covers surgical and medical expenses of an insured individual.

Why Medical Insurance?

When it comes to health insurance, a doctor, laboratory, hospital, or medical practitioner who treats individuals is termed as the “provider”. The owner of the insurance coverage is known as the “insured”. Health coverage pays a care provider for the services offered directly or reimburses an insured for the incurred costs.

According to a recent case study conducted by the Kaiser Family Foundation, the number of uninsured U.S citizens has decreased from 44 million to less than 28 million. In the United States, universal health coverage is not practiced, and in most cases, the health coverage comes as employer’s benefits package.

The Commonwealth Fund 2011 report also implies that one-fourth of U.S citizens lost health insurance covers after changing job descriptions or becoming unemployed. Arranging for funds to clear your medical bills in the eleventh hour can be a bit tricky. This is why medical coverage is always important.

Types of Medical Insurance

Government or public health insurance

Different health coverage provides different levels of healthcare and protection; the scope of coverage also varies. The United States government has been moving towards providing citizens with affordable and reliable health care. The state has been subsidizing health care for citizens to access services in real time.

Medicare, a program that spreads the financial risks associated with major medical expenses, the Veteran’s Health Administration, Medicaid, and the Indian Health Service are perfect examples of government intervention in the healthcare industry.

Private health insurance

According to the CDC (Centers for Disease Control and Prevention), the United States healthcare model heavily relies on private health insurance. The National Health Interview Survey indicates that more than 65 percent of U.S. citizens under the age of 65 years own private health coverage.

Importance of an Insurance Plan

The type of insurance plan you subscribe to determines the amount of money to be paid by the insurance coverage and the treatments to be offered.

In 2003, the Health Savings Account (HSA) option was introduced by the Congress. The savings account is the ultimate combination of the indemnity plan, HMO, tax benefits, and PPO. However, the option ought to be paired with a functioning health plan with a deductible of over $2,200 for families and $1,100 for individuals.

Legislation

Currently, under the Affordable Care Act (ACA) 2010, a United States citizen without medical insurance coverage has to pay an imposed fine. However, as of 2019, the insurance plan will no longer be a set requirement due to the enacted changes in the legislation. A person can be on their parent’s insurance until a set age (26), even if they are:

  • Financially dependent
  • Married
  • Living in their own house
  • Fit to be included under employer’s healthcare cover

The health insurance legislation changes regularly depending on the state you are in. In the United States, health insurance is regulated and managed at a state level. Visit the National Association of Insurance Commissioners (NAIC) for legislation updates.

The Bottom Line

Medical insurance covers part of the whole risk of individual incurring medical expenses by spreading the ultimate risk to a large number of clients. Insurance offers considerable flexibility in terms of disease coverage. The state legislation can successfully affect the underlying price of a policy. However, decisions on reimbursements and individual cover rest with the insurance companies.

Featured Image: depositphotos/ valphoto

Posted on June 19, 2018

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