Good Things About Health Insurance Companies

Health insurance companies are often demonized in the popular press as money-grubbing operations. Although in a free market, individual companies can price their policies high and increase profits, there are some basic reasons why health insurance companies were created in the first place. Insurance in general is a concept grounded in alleviating risk. People choose to pay an insurance company on an ongoing basis so that if disaster strikes they aren't forced to worry about where funds will come from for care.

Law of Large Numbers

• Health insurance companies spread the risk of extended or expensive medical care among large numbers of people, so that one individual won't have to assume all that risk.

Negotiated Rates

• Health insurance companies are able to negotiate lower rates for medical care because they are able to force medical professionals to compete for the health insurance plan's dollars.

Better Access to Care

• People are able to routinely visit their doctor for less point-of-service cost than paying out of pocket. The National Survey of American's Families performed in 1997 showed that persons with private health care had one-third of the unmet need for medical coverage than those who were uninsured. Health insurance allows individuals the freedom to visit their doctors more often in an effort to maintain their health and stop illness earlier than if they waited until a serious illness arrived.

Managed Care

• Health insurance experts are able to wade through the layers of confusing medical procedures and terminology to help a patient manage his care effectively. Although health insurance companies may limit choices and coverage options, they streamline the medical process for the patient.

Pharmaceutical Coverage

• Many health insurance companies have also been able to work with pharmacists and pharmaceutical companies to extend coverage beyond the doctor's office to the cost of medications.

Community Action

• Some health insurance companies extend their influence into the community, sponsoring health festivals, road races for joggers and walkers and charitable events. This is good for their marketing exposure, but also helps the community understand the importance of good health.

Claims Investigation

• Health care companies deny claims made by people who abuse the health care system, and refuse service to those who may add large risks to the pool. Although laws exist to eliminate discriminatory practices, health insurance companies help keep prices lower for insured persons by avoiding those who are expected to use large portions of the premiums supplied by others.

Employer Focus

• Because health insurance companies are large enough to work directly through employers, much of the time spent researching, negotiating, and creating a health insurance package is taken out of an employed individual's hands, allowing her to focus directly on her work.