The insurance which provides coverage against the medical and health expenses related risk for individuals is called Health Insurance.
Insurance providers can estimate the comprehensive average risk related to health care. Insurance providers can also estimate the risk related to health system expenses. Using these estimates, the insurance provider can work on and draft a normal finance structure. This could be the basis for a monthly premium payment. This finance structure could also be used to determine payroll tax amounts. Insurance providers can thus make sure the funds are available to pay for health care related benefits as mentioned within the insurance policy agreement. The financial advantages and health benefits are administered by a centralized department or an organization. This could be a private business, a non-profit organization or even a government agency.
A Health Insurance is basically an agreement between the insurer and the insured. The insurer in this case would be either the government providing health benefits or an insurance company. In either case, the insurer can also be referred to as the insurance provider. The insured in this case could either be an individual or it could even be the individual’s sponsor. Employers and community organizations are allowed to sponsor individuals for health benefits. The health insurance agreement can be renewed on a regular basis. This could be an annual renewal or a monthly renewal.
Private Health insurance contracts could also be lifelong agreements.
National health insurance plans make it mandatory for all citizens. The kind of private health care provided and the amount of expenses that will be provided coverage for by the health insurance policy are detailed in the contract. In the case of private health insurance, these details would be detailed in a booklet called Evidence of Coverage. In case of public insurance, these details are mentioned in a national health policy.
ERISA plan is a self-funded employer-sponsored plan that also provides health insurance coverage to employees. ERISA promotes itself as one of the biggest health insurance companies. However, in the case of ERISA insurance, the insurance company only deals with the administration of the insurance; they do not involve themselves in the act of the health insurance. Because of this reason, state laws do not govern ERISA plans. ERISA falls under federal jurisdiction and is hence governed by the US Department of Labor. The Summary Plan Description can provide the details about the health benefits or details of coverage. Any appeals related to ERISA would need to be routed through the insurance company. Once it passes through the insurance company, it is then directed to the Employer’s Plan Fiduciary. Beyond this, if it still warrants a need, the decision stated by the Fiduciary could be sent to the Department of Labor.
The Department of Labor would be required to review the plan to identify any issues related to compliance.
Department of Labor is then free to file a lawsuit. This filing of the lawsuit would need to be done in federal court. The health care system of the United States depends largely on private health insurance policies. This insurance system is the major source of insurance coverage for a large section of Americans. As per the CDC, an estimated 58% of US citizens have medical and health coverage from private health insurance. For senior citizens and children and families from low income households, public programs like Medicaid are the insurance programs providing medical and health benefits. However, public programs will only be applicable if they satisfy certain eligibility requirements. Similarly, Medicare is a social health insurance program which is provided to senior citizens and disabled citizens. Medicare is provided at a federal level. Medicaid is jointly funded by both the federal government and the state government. However, the administration of Medicaid happens at a state level. Additionally, there are other public programs like SCHIP. SCHIP helps to serve children and adults who do not satisfy the eligibility criteria of Medicaid. But these individuals cannot afford private insurance either. In addition to government sponsored medical and health insurance benefits, there are other programs which are catered to specific sections of the community. For example; Veteran’s Health Administration provides for health insurance and benefits to war veterans and their families. There are state run programs which help providing medical insurance to low income families.
Originally, the word health plan was being used by Health Maintenance Organizations. Whereas, the words health insurance came into being with commercial health and medical insurance organizations.