
As the cost of medical care increases, it has become increasingly important for people to obtain health insurance to maintain access to preventative and emergency health care and afford treatment. Without health insurance, a person has limited access to physicians and specialists and generally pays more for health care, especially emergency treatment. The average total of charges for a four-day hospital stay for an uninsured person can reach more than $19,000, according to a February 2009 Agency for Healthcare Research and Quality report.
How it Works
When a person enrolls in a health care plan, he joins a group that together shares the expense of injury or illness. Health insurance pools the financial resources of many to pay the medical cost of group members who require drugs, hospitalization or outpatient care to maintain their health. Health insurance policies generally involve monthly payments called premiums. In addition, a health plan member may have to pay a deductible, which makes him responsible for total charges up to a certain level before the insurer will begin paying a portion of claims. A member also may have to supplement the amount the insurer pays with a co-pay, a fee paid at the time of a doctor visit.
Preventative Care
Health insurance allows individuals to manage the cost of health care related to the birth of a child, preventative care and treatment for complaints such as a headache or the common cold. Regular checkups and some standard medical tests, generally paid by the health insurer, also allow physicians to detect and treat health problems that could become serious illnesses. People without access to health insurance to cover preventative care who can't afford to see a physician often miss the opportunity to diagnose and treat chronic diseases in their early stages.
Emergency and Chronic Care
Health insurance provides access to and financial protection against medical costs in the event of an accident, injury or diagnosis of a chronic illness that requires ongoing treatment by a specialist. Medical coverage also protects individuals who need immediate care for a broken leg, stroke or heart attack. The insurance policy gives patients access to medical care and alleviates at least some of the worry associated with treatment costs.
Other Benefits
Paying for prescription drugs to manage and treat chronic illnesses also has become a major purpose for enrolling in a health plan. Between 1999 and 2009, the number of filled prescriptions in the United States increased 39 percent to 3.9 billion from 2.8 billion, according to the Kaiser Family Foundation. The cost of prescription drugs also has increased during that time period. About a quarter of adults in the U.S. don’t fill a prescription and 21 percent cut pills in half or skip doses due to the cost of the medicine, according to a September 2009 KFF survey.
Obtaining Insurance
Many Americans receive health insurance through group health policies that employers offer workers and their families as part of the employee's compensation package. In employer-sponsored coverage, the company often pays a portion of the cost of each employee’s health care premium to an outside insurer or the employer itself pays for the worker’s medical care. Health plans and self-insured employers also negotiate with hospitals and health care providers for lower rates on medical treatment and procedures. A person who pays out-of-pocket for health care services may not receive these savings.
References
- HealthCare.gov: Health Insurance 101
- Agency for Healthcare Research and Quality: Trends in Uninsured Hospital Stays
- Kaiser Family Foundation: Prescription Drug Trends
- American Association for the Advancement of Science. "Illness and Medical Bills Cause Half of All Bankruptcies." Accessed Oct. 29, 2020.
- The Commonwealth Fund. "U.S. Health Care from a Global Perspective, 2019: Higher Spending, Worse Outcomes?" Accessed Oct. 29, 2020.
- Bureau of Economic Analysis. "National Income and Product Accounts: Table 1.1.6. Real Gross Domestic Product, Chained Dollars." Accessed Oct. 29, 2020.
- Bureau of Economic Analysis. "National Income and Product Accounts: Table 2.3.6. Real Personal Consumption Expenditures by Major Type of Product, Chained Dollars." Accessed Oct. 29, 2020.
- Internal Revenue Service. "Employee Benefits." Accessed Oct. 29, 2020.
- Tax Policy Center. "How Does the Tax Exclusion for Employer-Sponsored Health Insurance Work?" Accessed Oct. 29, 2020.
- U.S. Centers for Medicare & Medicaid Services. "How Is Medicare Funded?" Accessed Oct. 29, 2020.
- KFF. "The Facts on Medicare Spending and Financing." Accessed Oct. 29, 2020.
- Society for Human Resource Management. "Employer Medical Costs Expected to Rise 8.5% in 2012." Accessed Oct. 29, 2020.
- The Commonwealth Fund. "US Health System Ranks Last Among Eleven Countries on Measures of Access, Equity, Quality, Efficiency, and Healthy Lives." Accessed Oct. 29, 2020.
- National Institutes of Health. "Chronic Disease Prevention and Health Promotion." Accessed Oct. 29, 2020.
- National Institutes of Health. "An Empirical Study of Chronic Diseases in the United States: A Visual Analytics Approach to Public Health." Accessed Oct. 29, 2020.
- Partnership to Fight Chronic Disease. "2009 Almanac of Chronic Disease," Pages 1, 3. Accessed Oct. 29, 2020.
- National Center for Health Statistics. "Health Insurance Coverage: Early Release of Estimates From the National Health Interview Survey, 2019," Page 1. Accessed Oct. 29, 2020.
- U.S. National Library of Medicine. "Health Insurance and Mortality in US Adults." Accessed Oct. 29, 2020.
- Health Care Cost Institute. "10 Years of Emergency Room Spending for the Commercially Insured." Accessed Oct. 29, 2020.
- Asbestos.org. "High Cost of Cancer Treatment." Accessed Oct. 29, 2020.
- Amerigroup Corporation. "Increase Detection and Prevention of Fraud, Waste and Abuse." Accessed Oct. 29, 2020.
- Centers for Medicare & Medicaid Services. "NHE Fact Sheet." Accessed Oct. 29, 2020.
- United States Congress. "H.R.3600 - Health Security Act." Accessed Oct. 29, 2020.
- Medicare. "How Original Medicare Works." Accessed Oct. 29, 2020.
- National Institutes of Health. "The Patient Protection and Affordable Care Act: Implications for Public Health Policy and Practice." Accessed Oct. 29, 2020.
- United States Congress. "H.R.3590 - Patient Protection and Affordable Care Act." Accessed Oct. 29, 2020.
- Internal Revenue Service. "Affordable Care Act Tax Provisions." Accessed Oct. 29, 2020.
- Healthcare.gov. "Out-of-Pocket Maximum/Limit." Accessed Oct. 29, 2020.
- Urban Institute. "Who Gained Health Insurance Coverage Under the ACA, and Where Do They Live?" Page 4. Accessed Oct. 29, 2020.
- U.S. Centers for Medicare & Medicaid Services. "Insurance Companies Take in Record Profits, Effective Rate Review is Needed." Accessed Oct. 29, 2020.
- The Commonwealth Fund. "The Affordable Care Act’s Impact on Small Business." Accessed Oct. 29, 2020.
- American Bankruptcy Institute. "Statistics Show Decrease in Small Business Bankruptcies." Accessed Oct. 29, 2020.
Writer Bio
Cassie M. Chew is a multimedia journalist who covers politics, health care, education policy and technology news for print and online newspapers, magazines and trade press journals. When she's not pursuing a story, Chew enjoys independent film, biographies and books about nutrition and health. She holds a Master of Science in journalism from Northwestern University.