Health insurance plays a pivotal role, the world all over, in providing individuals who are ill with privileges like covering the cost of the said individual’s medical expenses. There are different types of health insurance in the world, and in the USA today, at least 90 percent of the Nation’s citizens have health insurance and those subscribed to it are associated with lower death rates, better health outcomes, among other benefits. Even at that, there is still a significant amount of persons who lack health insurance due to the rising costs in healthcare.
In this article, learn what health insurance is, types of health insurance plan, why its cost has been rising recently, among other details.
What Is Health Insurance?
Health insurance is a type of contract where the insurance company provides enough coverage or funds that can afford treatment for the condition of the insured.
The insured can afford these benefits by subscribing to whichever plan by the insurer that they would consider most suitable for themselves. Insurance plans vary from country to country. For example, in the US where there is no access to universal healthcare, health insurance is, a lot of the time, made available in employer benefit packages. Great health care plans are very integral to living the most productive and healthy life that one can possibly grasp.
Types of Health Insurance
Depending on the health insurance type, the insured can either cover the costs themselves, then the money will be replaced by the insurance company; or the insurance company will be the one making the payment.
These are some of the health insurance types:
- Managed Care Plan Insurance: In this type of plan, the insurer makes it their job to provide the best possible healthcare to their clients at the lowest cost. This is done by the insurer having contracts with a number of providers who will offer the services at low cost. In some managed care plans like that of Health Maintenance Organizations (HMOs), the insured are supposed to choose a primary doctor who will coordinate with the other specialists. This act will make room for streamlined relations and proper networking.
- Private Health Insurance: This type of insurance is available to those who do not have access to the kind of package that can be gotten through one’s employer. For individuals who are self-employed, they can purchase this type of plan directly from insurance companies. There are also upgraded aspects of the private plan that provide features that are available in the public health insurance plan. One difference between the private and public health insurance plan is that the former usually offers a vaster network of providers.
- Public Health Insurance: This is a plan that is sponsored by the government. Here, the government subsidizes healthcare so as to cover costs for the public. This way, more persons can have access to the best offers without having to pay the costly prices. In some countries, this insurance plan is mandatory, while some others take it up voluntary. Examples of this kind of healthcare in the US includes Medicare, the Veterans Health Administration, and the Indian Health Service.
- Indemnity, or Free-For-Service Insurance: This insurance plan covers the treatment by reimbursing the insured for usually 80% of the expenses accumulated. It also grants the insured the opportunity to choose their preferred place of treatment. One doesn’t need referrals to see specialists here, and as stated earlier, the insurer might not cover the entire costs, so the insured may need to do some of that themselves.
- Employer-Sponsored Health Insurance: Here, individuals receive coverage that their employers provide to them. The decision for what the health plan will be is usually taken up by the employer, with the costs often being split with the employees. Options like Exclusive Provider Organizations (EPOs), among a host of others are available.
Why Has The Cost Of Health Insurance Plans Been Rising In Recent Times
This is a question that concerned individuals in need of a health insurance plan, as well as those who already have one are wont to ask. There are multiple reasons for this happening, among which are, aging population, technological advances, and lack of autonomy.
- Aging Population : America, for instance, has 56 million persons who are currently aged 65 and above. A number that is likely to reach 94.7 million by 2060. These older individuals are more prone to ailments and conditions like diabetes, and heart disease. Therefore, this is one of the reasons why there’s been a major increase in health insurance costs. 60% of this demographic have at least two heart conditions, a factor that undoubtedly places a lot of strain on the healthcare system.
- Technological Advances : Technological advances bring to the table, better healthcare services. But this better service is most times the precedent for costlier procedures. Studies even show that technological advancement is responsible for about 38% to 62% of the increase in healthcare insurance costs.
- Lack Of Autonomy : In America, more than 153 million persons get their health insurance through the Employer-Sponsored Health Insurance Plan, and usually, employers do not contact their staff when making decisions about the group plan. Employers often make decisions based on budget, administrative burden, etc. The lack of control on the side of the employees is likely to leave them at the mercy of group insurance plans that accrue costs massively.
Choosing A Policy
When in the process of making a choice as to what plan will be most suitable, it is advisable to contact an insurance broker who can help you better understand your coverage needs and then purchase a plan that will be very suitable.
The following are factors one must consider when choosing a health insurance plan:
- Make sure the options in this plan are integral to the betterment of your health.
- Pay attention to the clause that specify the “waiting period.” In this period, the insurer does not accept claims that concern certain illnesses. So, it is best to pick plans that have lowest waiting period.
- Pay attention to the co-payment clause. Some policyholders make co-payment compulsory, others, not so much. This is why one must look through the clause properly before deciding on any plan.