Understanding Health Insurance in USA

In the United States individuals and families can purchase private health insurance or receive coverage through government programs. Health insurance helps policyholders pay for doctor visits, hospital care, laboratory services, specialist care, prescription drugs, home health care and emergency services. Costs and benefits of health insurance can vary, depending on the type of coverage and health condition of the policyholder.

Obtaining Health Insurance

• Employers often offer health insurance for their employees through group plans. Employer-sponsored insurance typically provides coverage for the qualified spouses and dependent children of participants. People who do not have access to group plans can often purchase coverage independently from an insurance company. Low-income individuals and senior citizens can often qualify for free or low-cost insurance provided by state, local, and federal governments.

Private Health Insurance

• Typical private health insurance programs include flexible spending plans, health maintenance organizations (HMO), and preferred provider organizations (PPO). Flexible spending plans allow participants to choose their benefits, doctors, and hospitals and pay a percentage for medical services. HMO plans require participants to select a primary physician from a list of participating doctors, who serves as the coordinator for all health care services. PPOs have a network of participating hospitals and doctors that agree to provide services for discounted fees.

Government Programs

• State and federal governments fund Medicaid and each state administers its own program. Medicaid provides primary health care coverage for low-income and disabled citizens and bases eligibility on income limits. The federal government sponsors the State Children's Health Insurance Program (SCHIP) and each state administers its own plan. SCHIP provides health care benefits for children of parents ineligible for Medicaid. The federal government offers Medicare health insurance coverage for disabled citizens, the blind, and people 65 years of age and older.

Costs

• Health care coverage often include deductibles, the amount a policyholder must pay before a policy covers costs. HMO, PPO, and government health care plans can require participants to make copayments, set amounts the patient must pay for specific services. When receiving certain services, private and government health plans can require policyholders to make coinsurance payments. Coinsurance is a percentage of the cost of a service. The majority of health insurance policies require participants to make premium payments, with the exception of certain government coverage for low-income patients. Premium payments represent the cost of a policy and policyholders must pay premiums to maintain coverage. Copayments, deductibles, coinsurance, and premiums vary, depending on the type of policy and health condition of the policyholder.

Health Care Reform

• In September 2010 provisions of the federal Affordable Care Act started to take effect throughout the health care system. New provisions prohibit insurance companies from denying health insurance for children with preexisting health conditions. The law will prohibit denial of coverage to adults with preexisting conditions starting in 2014. Insurance companies can no longer set lifetime spending limits on health insurance coverage and starting in 2014 companies cannot place annual spending limits on coverage. In 2014 insurance companies can no longer discontinue coverage for patients who participate in clinical trials as part of their treatment.