Who Pays for Health Care Insurance?

Health care insurance in the U.S. comes at a high cost. The policyholder, employers, the government or a combination of the three pays the premium -- the cost of the actual insurance policy. The individual insured is responsible for payment of any insurance co-pays, co-insurance or deductibles, regardless of the type of coverage.

Individuals

• Private health insurance plans cover individuals and their dependents. This type of insurance is available from hundreds of insurers, and individuals can apply and obtain coverage directly from the insurance carrier. The individual, who obtains a private insurance policy, is the payer responsible for the entire insurance premium. Individual policies range from comprehensive, which covers preventive and routine procedures and hospitalization, to catastrophic, which only covers care for serious illnesses and injuries. Policies may offer a level of both, but for all private insurance, the insured is the payer.

Employers

• Many employers offer their staff the option of coverage through a group health insurance plan. Often, the employer provides several options at different costs and various coverage levels. Employers usually share the cost of the insurance premium with the employee, but many pay the bulk of the cost. The employee pays a percentage of the premium, deducted through her paycheck. The employee is also responsible for out-of-pocket costs such as co-pays, co-insurance and deductibles. Some employers may choose to cover the entire health insurance premium.

Government

• The federal and state governments offer several health plans to individuals based on financial or medical need. Medicare, a federally sponsored health plan, is available to citizens age 65 and older and those with certain disabilities. Though individuals pay the Medicare premiums, several programs exist to help with the costs. Medicaid, a state-sponsored program, offers health insurance to the financially needy. It is possible to have both Medicare and Medicaid coverage, with Medicaid helping to pay for Medicare costs.

COBRA

• Although COBRA health care insurance is available through an employer-sponsored group plan, individuals pay the premiums. COBRA, available as a continuation plan when an employee loses her job, is available for at least 18 months after the employment end date. The individual pays the entire premium, both the employee and employer contribution amount. The premium is at a group rate, which may be less than paying for an individual policy. In addition, the federal government may elect to enact a subsidy to help individuals cover their COBRA insurance premium, although as of January 2011, this subsidy is not in place.