Health Insurance

Health insurance is an agreement between a consumer and an insurance company where the company agrees to pay for all or part of the consumer’s medical expenses in exchange for a monthly premium. This agreement usually lasts for a year, during which the insurance company pays for expenses related to illness, injury, pregnancy, and preventative care. However, health insurance plans in the US come with exceptions to coverage, such as deductibles that require the consumer to pay certain healthcare costs out-of-pocket up to a maximum amount before the coverage begins, and co-payments that require the consumer to pay a set share of the cost for specific services or procedures.

Some of the key features of health insurance in the US are:

• Health insurance pays most medical and surgical expenses and preventative care costs incurred by the insured person in return for a monthly premium payment.
• Generally, the higher the monthly premium is the lower the out-of-pocket costs are to the insured.
• Virtually all insurance plans have deductibles and co-pays but these out-of-pocket expenses are now capped by federal law.
• Since 2010, the Affordable Care Act has prohibited insurance companies from denying coverage to patients with preexisting conditions and has allowed children to remain on their parents’ insurance plan until they reach the age of 26.
• Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP) are federal health insurance plans that extend coverage to older, disabled, and low-income people.