According to the CDC (Center for Disease Control), 65% of Americans under the age of 65 were covered by private health insurance plans through the workplace in 2008.
Primary types of private health insurance plans include:
Employment-Based Health Insurance: Offered through an employer or sometimes a union, the employment-based plan is purchased from a private insurance provider. Also called group insurance, employment-based insurance typically offers health care coverage for the employee and immediate family.
Individual or Direct Purchase Health Insurance: Insurance plan purchased directly from an insurance provider by an individual. This type of insurance will often cost more and include less coverage than an employee-based group policy.
There are government insurance programs available for specific groups. These include:
Medicare: A federal program that provides health care cost assistance to those 65 and older and individuals of any age with long-term disabilities.
Medicaid: Administered by the individual states, Medicaid covers families with dependent children who are in financial need, the elderly, sight-impaired or those suffering from disabilities.
State Children’s Health Insurance Program: Administered by individual states, SCHIP provides health care to children of low-income families who do not qualify for Medicaid.
State Plans: Some states administer their own health insurance plans for the uninsured.
COBRA: A sudden job loss or a change in employment status may impact an individual’s health insurance coverage. COBRA (the Consolidated Omnibus Budget Reconciliation Act) allows individuals to continue their employer-based insurance coverage for a length of time by paying the full contribution.
As health care coverage costs rise, the number of insured decreases. Those who work for larger firms, with 50 or more employees, are more likely to be offered health insurance plans through their employers. Smaller companies are finding it increasingly difficult to pay for health insurance programs for their employees and the ability to offer coverage is declining. As paying for health insurance plans becomes more difficult, companies that offer health insurance have been forced to pass the higher costs on to employees by increasing employee contributions. A portion of these employees choose to opt-out of coverage rather than pay these higher amounts. The most likely groups to be uninsured are low-income workers, minorities, young adults, near-elderly age working women, the self-employed and part-time workers.
Those covered by employer offered health insurance plans are more likely to receive up to date preventive health care and timely, suitable medical treatment, resulting in lower mortality rates. The uninsured may be forced to forgo seeing a doctor and be unable to pay for their medications.
The purpose of a health insurance plan is to protect insured individuals from catastrophic costs due to medical emergencies or afflictions. Most health insurance plans offer coverage for medical costs from accidents or illness, preventive procedures such as mammograms and yearly physicals as well as prescription drugs. Some plans offer assistance with mental health issues, alcoholism and drug addiction. Most require a co-pay for services. In addition to co-pays and employee contributions, there may an annual deductible and a maximum dollar limit that the insurance company will pay for specific procedures. Most companies also include a cap on the maximum out-of-pocket costs a member may be required to pay annually.
Health insurance companies continually adapt coverage plans in an effort to strike a balance between meeting the needs of its plan members and the rising cost of medical care.
