What Is Private Insurance?

Private insurance is coverage available through insurance carriers and is not controlled by the federal government. This differs from government insurance programs such as Medicaid and Medicare.

Types

• Virtually any type of insurance obtained through employment is a form of private insurance. Any insurance you purchase on your own, such as a life insurance policy from a neighborhood agent, is also private insurance.

Benefits

• Because private insurance is sold on the open market, that allows for competition. In theory, this can provide the consumer with more choices and help keep the costs down. Insurance through an employer might be obtainable even if the employee has a pre-existing medical condition.

Regulation

• Private health insurance is typically regulated by state governments. A state insurance commissioner oversees insurance companies and helps create appropriate legislation.

History

• Forms of private insurance has been around for more than a century. Private health insurance can trace its roots back to the Civil War era, when insurance for steamboat and rail accidents became available.

Drawbacks

• The costs of private insurance can be prohibitive. As of 2009, U.S. policy-makers are considering legislation that would implement more government control over the health insurance industry to keep costs down.