There are two main types of health insurance: private and public.
Private health insurance is provided by companies, organizations or individuals. It usually covers only the insured person and may have a limited coverage. For example, some policies cover only hospitalization expenses while others also cover outpatient care, prescription drugs and preventive care. Some private insurers also offer supplemental plans that can be purchased to supplement a basic policy.
Public health insurance is government-sponsored and typically covers a larger portion of the population than private plans do. In the United States, Medicare is the largest public health insurance program, covering seniors and some disabled people; Medicaid provides coverage for low-income adults and children; while the Children’s Health Insurance Program (CHIP) covers kids in families who don’t qualify for Medicaid but can’t afford private coverage. Other countries have different mix of public and private health insurance programs depending on their needs and resources
Both private and public health insurance play an important role in ensuring that people have access to quality health care.
The term “health insurance” is used to describe a system or policy by which medical and hospital costs incurred by an individual are covered by an insurance company. There are two main types of health insurance plans: fee-for-service and managed care.
FEE-FOR-SERVICE:
Under a fee-for-service plan, the insurance company contracts with doctors, hospitals, and other health care providers to provide medical services to the insured. The insured individual pays the health care provider directly for services rendered, and the insurance company reimburses the provider for a portion of the fee. The insured individual is also responsible for paying a monthly premium to the insurance company.
MANAGED CARE:
Under a managed care plan, the insurance company contracts with a group of doctors, hospitals, and other health care providers to provide medical services to the insured. The insurance company pays the health care providers a set fee for each enrolled individual, regardless of the actual amount of medical services used. The insured individual is responsible for paying a monthly premium to the insurance company, and may also be responsible for paying a portion of the fees charged by the health care provider (e.g., co-payment, deductible).
Both fee-for-service and managed care plans have advantages and disadvantages. Fee-for-service plans offer the insured individual more choice in selecting health care providers, but usually have higher premiums and out-of-pocket costs. Managed care plans often have lower premiums and out-of-pocket costs, but may limit the insured individual’s choice of health care providers.
