Health insurance is one of the most common types of insurance today. It protects an individual from financial strain in the event of sickness. Health insurance companies’ work by spreading risk over a large number of people who get insured using a company and depending on the policy, a health insurance plan may cover ether part or whole of the risk of an individual incurring medical expenses. Without health insurance, a small medical bill can destabilize the financial state of middle-income earners. Thus, health insurance benefits both the insurance companies and the policyholders.

In most of the countries today, health insurance is mandatory for persons above the legal age. For instance, in the United States, everyone is expected to have a health insurance coverage except certain groups of people such as those who are incarcerated, those whose health insurance coverage would be than 8% of their earning and individuals with very low earnings such that they do not pay taxes among other groups. As a result, most of the people in America have insurance covers. According to the United States Census Bureau, approximately 85% of American citizens have insurance covers through their employers or their spouses.

For most people who are employed, they have insurance covers through their employers as benefits. Employers offering insurance benefits to their employees makes a lot of sense as it reduces the bills for the employees. Getting an individual health insurance cover is way more expensive than employer-sponsored coverage. Thus, the staff is able to get the same services at a lower cost than they would if their employer had not covered the insurance. This method also offers tax advantages as businesses offering health care cover deduct the insurance cost as an expense and get tax advantages. Also, there is increased productivity and morale on the part of the employees.

There are different types of health insurance plans. For example, there is the preferred provider organization whereby employees of a specific organization are encouraged to use certain health care providers who are contracted to provide the services at discounted rates. The employees are not required to use the contracted doctors and hospitals, but when they do, the employees get a discount. Another plan is the health maintenance organization plan which requires employees to choose their primary care physician who they will be seeing throughout their stay in the organization. Therefore, it has less flexibility. Other plans include point of service plan, indemnity health insurance plans and health savings account among others.

With all the plans available today, it is important that people choose their health insurance wisely. One of the things to consider is monthly premiums. Depending on the earning of an individual, the amount of monthly premiums may be an issue. Another thing to consider is coinsurance which is the percentage the policyholder pays for procedures such as surgeries and hospital stays. Finally, there is a copayment for each visit. For instance, if a doctor visits the policyholder in the hospital, the patient is required to copay for the visit and coinsure for the hospitalization.

Health insurance is crucial as it allows a person to access quality health care services which would not be available to them without pooling risks as with the health insurance industry. Therefore, healthcare is made more affordable for people with low incomes. Also, it is possible to extend insurance policies to children, spouses or parents without incurring extra costs. Therefore, other countries in the world should also make health insurance mandatory just like the United States.

 
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