Health insurance

Definition

Health insurance is a type of insurance coverage that pays for medical and surgical expenses incurred by the insured. It is designed to provide financial protection against high healthcare costs, allowing individuals and families to access necessary medical services without facing overwhelming financial burdens. Health insurance can come in various forms, such as employer-sponsored plans, government programs, or private policies, and typically covers a range of services, including preventive care, hospital stays, and prescription medications.

5 Must Know Facts For Your Next Test

1. Health insurance helps cover a variety of medical expenses, reducing the financial burden on individuals when they need care.
2. Most health insurance plans include essential health benefits mandated by law, such as emergency services, maternity care, and mental health treatment.
3. Employer-sponsored health insurance is one of the most common ways people obtain coverage, with many employers offering plans as part of their employee benefits.
4. Government programs like Medicare and Medicaid provide health insurance for specific populations, including the elderly and low-income individuals.
5. The Affordable Care Act expanded access to health insurance by providing subsidies for low- to moderate-income individuals to purchase coverage through state or federal exchanges.

Review Questions

• How does health insurance reduce financial risk for individuals and families?
  • Health insurance significantly reduces financial risk by covering a large portion of medical expenses that can otherwise be overwhelming. When an individual has a medical emergency or needs ongoing treatment, having health insurance ensures that they are not solely responsible for high costs. It allows families to access necessary healthcare services without the fear of incurring debt, which can lead to financial instability.
• What role do premiums, deductibles, and copayments play in a health insurance plan?
  • Premiums, deductibles, and copayments are crucial components of health insurance plans that determine the overall cost of coverage for individuals. Premiums are the regular payments made to maintain coverage, while deductibles are the out-of-pocket amounts that must be met before the insurer begins to pay. Copayments are fixed fees paid for specific services at the time of care. Together, these elements shape how much an insured individual will spend on healthcare throughout the year.
• Evaluate how government initiatives like the Affordable Care Act have impacted access to health insurance in the United States.
  • The Affordable Care Act has significantly impacted access to health insurance by expanding coverage options and increasing affordability for many Americans. By introducing measures such as subsidies for purchasing plans and prohibiting denial of coverage due to pre-existing conditions, it has allowed millions more to obtain insurance. This shift has led to a decrease in the uninsured rate and improved overall public health outcomes by making healthcare more accessible, particularly for vulnerable populations who previously faced barriers.

Related terms

premium: The amount paid regularly (monthly or annually) by the insured to maintain their health insurance coverage.

deductible: The amount an insured person must pay out-of-pocket for healthcare services before their health insurance begins to pay.

copayment: A fixed amount paid by the insured for a specific healthcare service or prescription medication at the time of receiving care.