What is health insurance?

January 29, 2018 Posted by

Health insurance, health care coverage, health coverage… so many words for the same thing but what exactly do they refer to? Is it really necessary to have? Although it’s difficult to capture the many details surrounding health insurance in the United States into a short, summarized article, we’ll do our best to make it easy to understand.

Health insurance basics

The field of health insurance is incredibly broad and extends to so many spheres of the topic. In its most basic form, health insurance is a type of insurance intended to help cover the costs of any medically-related services. This could be in the form of private insurance purchased by the individual or a government-funded social welfare program, employer-sponsored insurance programs or even disability cover offered by several parties. These health insurance options vary greatly in the coverage they offer, and naturally, differ substantially in price.

Health insurance regulations will differ between states and might not be the same for the area where you are living. In general, several aspects of health insurance remain similar throughout the United States. In the private insurance sector, individuals – or their employers – pay a monthly contribution fee towards a medical aid which then allows them coverage when a trip to the hospital or clinic is needed or if medication needs to be purchased.

Health insurance limitations

This coverage comes with certain terms and conditions, as all health insurance options do, and will differ in the extent to which assistance is granted for medical services and medication. Insurance providers will usually limit the network of services that are covered, meaning, that patients will only be partially covered or not covered at all if they decide to go to a doctor or clinic not in agreement with the health care provider’s chosen affiliates. Government plans work in a similar manner and will also contain the network of service providers and amount of medication available, according to the chosen health care option.

Do I need health insurance?

Absolutely.  It is amazing how quickly people put more thought into insuring their vehicle than insuring themselves.  You need health insurance because you cannot predict what your medical bills will be. In some years, your costs may be low. In other years, you may have very high medical expenses. If you have health insurance, you will have peace of mind in knowing that you are protected from most of these costs. You should not wait until you or a family member becomes seriously ill to try to purchase health insurance. We also know that there is a link between having health insurance and getting better health care. Research shows that people with health insurance are more likely to have a regular doctor and to get care when they need it.

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