In the United States, private companies provide consumers with health and medical insurance. Other countries, such as Great Britain, provide public health insurance through the auspices of the government, funded by its taxpayers. Proponents of the U.S. system argue such benefits as lower public taxes. Detractors note the continually rising costs, decreasing coverage and difficulty of navigating the intense bureaucracy of the system.
Purpose
Health insurance is intended to protect you from the overwhelming cost of major illness or injury and provide you with a method for accessing doctors, surgeons and other health care professionals when you need them. Insurance companies set up networks of doctors and hospitals and usually direct their customers to these health care providers. Customers accepted by an insurance company must choose a service plan that defines the cost they'll pay and the amount of services they're eligible to receive. If you get sick or are injured, the insurance company will pay some or all of your costs, depending on the rules of your plan.
Types of Companies
The companies that offer health insurance aren't necessarily the ones who provide your health care. Some commercial health insurers, such as Aetna, are primarily insurance companies owned by their policyholders or stockholders. They do not operate hospitals, although they may regulate which ones you may visit. Other insurers began as nonprofit state hospitals and medical associations that now offer both medical care and commercial health insurance; these include Blue Cross and Blue Shield. A third type of provider is an integrated combination of health care provider and health insurance company, such as Kaiser Permanente, run privately and for a profit.
Managing Risk
Health insurance companies offer their services to a wide number of people on the assumption that only some of those people will require expensive treatments. Everyone pays a monthly fee whether they use the company's services or not. The idea is to spread the cost of care for clients across the field, balancing the cost of unhealthy individuals with those who require fewer services. Insurance companies screen applicants to judge the likelihood that they'll require expensive treatments; applicants may be refused or charged a higher premium based on their current state of health.
Problems With Insurance Companies
Throughout the 1990s and the 2000s, health insurance became so expensive many couldn't afford it. Contributing factors include the high cost of prescription drugs, an increasingly obese and unhealthy population, doctors' malpractice insurance, financial incentives for doctors that encouraged continued care rather than treatment, antitrust exemptions and the high salaries and perks enjoyed by insurance company executives. For many companies, ensuring a profit meant cutting costs, cutting coverage, denying claims, raising premiums and rejecting applicants with pre-existing medical conditions. As of 2008, the Center for Disease Control cited 43.6 million uninsured Americans under the age of 65. The public outcry over rising costs and declining service made health insurance a major issue in the 2008 presidential election. Many of these issues remain unsolved.
Health Care Reform of 2010
In 2010, President Barack Obama signed a health care reform bill in an attempt to correct the perceived abuses of the health insurance system and offer affordable insurance for 95 percent of Americans. The bill provides a health care tax cut to make coverage more affordable, prevents people with pre-existing conditions from being denied coverage and requires greater accountability from insurance companies and providers to keep costs low and avoid denial of care. The bill will be implemented in steps; some provisions will be rolled out as late as 2020.
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