What is Health Care Insurance?

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Health care insurance (sometimes simply known as health insurance ) is a form of collective risk pooling designed to offer financial protection from financially burdensome medical expenses. A key component of American healthcare, it can be purchased either through private insurers or public programs like Medicare and Medicaid; or individually through employer group policies purchased directly or through government-run exchanges like Affordable Care Act marketplace.

Individuals and families purchasing health insurance typically make monthly premium payments on a recurring basis for coverage during a fixed or indefinite policy term, known as renewal. Some plans offer guaranteed term renewability – meaning if your policy expires before you die, you can renew it without having to undergo medical exams again; though this could cost more in future renewals.

There can be much confusion surrounding health insurance. Many mistake it for other forms of health care services provided by doctors or hospitals – both are critical components of our system, but aren’t typically what come to mind when people hear “health insurance.”

Health plans and health insurance differ considerably in several key ways. Expensive premiums and out-of-pocket expenses such as copayments, deductibles and coinsurance often lead to high rates of uninsurance; additional complications arise from the marketplace such as underwriting practices that can differ among carriers; provider network availability issues that affect coverage as well as various public policies that impact coverage options.

Most health insurance policies come with a list of covered services that is defined in their policies, such as physician and hospital services, prescription drugs, laboratory tests, mental health and substance abuse treatment as well as some preventive services that typically do not require deductible payments or out-of-pocket expenses to the enrollee. Other covered services may require payments or out-of-pocket expenses but insurers are usually legally mandated to offer at least some essential benefits at no extra charge to enrollees.

Some private insurers are advertising limited benefit plans as an alternative to comprehensive health insurance policies, though these often have higher deductibles which may be offset with tax-free savings accounts or tax credit accounts. Other newer options such as Scheduled Health Insurance Plans have expanded from earlier forms of hospital indemnity plans, offering tax free savings accounts that allow individuals and employers to put away money into special accounts designed specifically to cover deductibles, out-of-pocket expenses, as well as lower premiums than comprehensive plans.

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