Healthcare is an expensive service in America. It ensures that a larger population of the country has access to healthcare services. Individuals without insurance coverage tend to pay more for healthcare. Also, they may tend to not get adequate coverage due to the cost of healthcare outside insurance coverage.
- Brief History of Healthcare Insurance in the USA
- The Affordable Care Act (ACA)
- Government-Sponsored Insurance Programs
- Healthcare Insurance Companies
- Out of Pocket Maximum
Brief History of Healthcare Insurance in the USA
In 1850, accident insurance was first offered in Massachusetts. Initially, coverage was extended to ship and train accidents. As the years rolled by, many more insurers were offering healthcare insurance coverage beyond accidents and into general healthcare. By the early 1900s, employee healthcare insurance began to surface. Initially, employees paid for all healthcare services with their money directly. Gradually, the modern setup of the healthcare insurance structure came into existence.
The Affordable Care Act (ACA)
Enacted in 2010, the ACA provided the most extensive restructuring of the countries healthcare system. The 2016 review of the ACA (ObamaCare) significantly expanded the healthcare insurance protection to the uninsured at an affordable rate. This change is beneficial to those individuals that have pre-existing medical conditions as they can access healthcare without the fear of being charged more or denied coverage entirely.
The ACA allows individuals to access healthcare through state or federal points. It is designed to overcome bias while providing coverage to young adults through their family’s insurance coverage until they are 26. It is friendly to senior citizens as it eliminates unfriendly limits and affords them discounts once their prescription limit is reached.
The ACA defines the working dynamics of healthcare services, which include hospitalization, ambulance service, prescription medication, and more. It also allows some degree of flexibility as assurers can switch from one insurance plan to another as long as specific criteria are followed.
Government-Sponsored Insurance Programs
The ACA explicitly specifies how Medicaid and Medicare operate as government-run healthcare insurance programs. Medicare is funded by the federal government, while both the federal and state government funds Medicare. The programs exist with the sole function of providing affordable healthcare insurance to as many Americans as possible based on some criteria. The two programs also complement the role of the healthcare insurance marketplace.
The marketplace allows Americans to purchase healthcare insurance for individuals or groups. The popular insurance plans offered include health maintenance organization, preferred provider organization, and point of service plan. Many more healthcare insurance plans exist, which provide different types of coverage. Also, each plan could come either as bronze, silver, gold, or platinum, which gives each assurer different levels of benefits.
Healthcare Insurance Companies
At the moment, there are thousands of healthcare insurers operating within America. The top five healthcare insurers in America are UnitedHealth Group, Kaiser Foundation, Anthem, Humana, and CVS Health. UnitedHealth Group, which is the largest healthcare insurance provider in the country, controls about 14% of the overall market share. This insurer has an annual total premium of about $160 billion, which increases steadily every year.
There are thousands of agents and brokers across all the states of the country that sell healthcare insurance policies to millions of Americans.
Premium in healthcare insurance is similar to premium in other aspects of insurance. It is a payment that is periodically made to insurers by assurers to ensure that insurance policies are kept active. Payments of premiums are made upfront at the beginning of each month or year as agreed. Premiums are sometimes deducted directly through payrolls by employers before remittance to the insurers.
Healthcare insurance premiums can be costly and must be paid on time. Failure to do so can lead to suspension of the insurance policy by the insurer.
Deductibles, in terms of healthcare insurance, refer to the money an individual pays from their pocket for medical services under the insurance plan up until the insurer starts to pay for eligible services. The type of insurance plan an individual purchases determines the benefits they get and the rate of deductibles they pay.
Individuals that pay high rates of premiums tend to pay less in deductibles and vice versa. Therefore, individuals that prefer to spend less in premium would naturally opt for high deductibles.
Copay describes the fixed money that is paid by assurers for healthcare services received from service providers. Healthcare services such as medical consultation and prescription medication all attract copay as a standard practice.
Copay is paid to the service provider at the point of service as a fixed amount. However, not all healthcare services require a copay. Copays are typically not more than $30 per healthcare services.
Unlike copay, coinsurance describes an amount paid for healthcare services at a fixed rate. It is usually paid after the payment of a deductible. The difference between copay and coinsurance is that copay must be paid at the point of service. For example, an individual that receives an MRI that costs $2,000 would pay $200 in coinsurance based on a 90% to 10% sharing formula.
Out of Pocket Maximum
This threshold is the maximum amount of out of pocket money an assurer is expected to pay for healthcare services received. When this amount is reached, the insurer bears 100% of the healthcare services cost within a year.