In the United States, health insurance is any program that helps pay for medical expenses, whether through privately purchased insurance, social insurance or a social welfare program funded by the government.Synonyms for this usage include "health coverage," "health care coverage" and "health benefits."
In a more technical sense, the term is used to describe any form of insurance that provides protection against the costs of medical services. This usage includes private insurance and social insurance programs such as Medicare, which pools resources and spreads the financial risk associated with major medical expenses across the entire population to protect everyone, as well as social welfare programs such as Medicaid and the State Children's Health Insurance Program, which provide assistance to people who cannot afford health coverage.
In addition to medical expense insurance, "health insurance" may also refer to insurance covering disability or long-term nursing or custodial care needs. Different health insurance provides different levels of financial protection and the scope of coverage can vary widely, with more than 40 percent of insured individuals reporting that their plans do not adequately meet their needs as of 2007.
The share of Americans with health insurance has been steadily declining since at least 2000. As of 2010 just under 84% of Americans had some form of health insurance, which meant that more than 49 million people went without coverage for at least part of the year. Declining rates of coverage and under insurance are largely attributable to rising insurance costs and high unemployment. As the pool of people with private health insurance has shrunk, Americans are increasingly reliant on public insurance. Public programs now cover 31% of the population and are responsible for 44% of health care spending. Public insurance programs tend to cover more vulnerable people with greater health care needs. Many of the reforms instituted by the Affordable Care Act of 2010 were designed to extend health care coverage to those without it.
History
Accident insurance was first offered in the United States by the Franklin Health Assurance Company of Massachusetts. This firm, founded in 1850, offered insurance against injuries arising from rail-road and steamboat accidents. Sixty organizations were offering accident insurance in the US by 1866, but the industry consolidated rapidly soon thereafter. While there were earlier experiments, the origins of sickness coverage in the US effectively date from 1890. The first employer-sponsored group disability policy was issued in 1911, but this plan's primary purpose was replacing wages lost due to an inability to work, not medical expenses.
Before the development of medical expense insurance, patients were expected to pay all other health care costs out of their own pockets, under what is known as the fee-for-service business model. During the middle to late 20th century, traditional disability insurance evolved into modern health insurance programs. Today, most comprehensive private health insurance programs cover the cost of routine, preventive, and emergency health care procedures, and also most prescription drugs, but this was not always the case. The rise of private insurance was accompanied by the gradual expansion of public insurance programs for those who could not acquire coverage through the market.
Hospital and medical expense policies were introduced during the first half of the 20th century. During the 1920, individual hospitals began offering services to individuals on a pre-paid basis, eventually leading to the development of Blue Cross organizations in the 1930. The first employer-sponsored hospitalization plan was created by teachers in Dallas, Texas in 1929.Because the plan only covered members' expenses at a single hospital, it is also the forerunner of today's health maintenance organizations
In the 1930, The Roosevelt Administration explored possibilities for creating a national health insurance program, while it was designing the Social Security system. But it abandoned the project because the American Medical Association (AMA) fiercely opposed it, along with all forms of health insurance at that time
College-sponsored health insurance for students
Many colleges, universities, graduate schools, professional schools and trade schools offer a school-sponsored health insurance plan. Many schools require that you enrol in the school-sponsored plan unless you are able to show that you have comparable coverage from another source.
Effective group health plan years beginning after September 23, 2010, if an employer-sponsored health plan allows employees' children to enrol in coverage, then the health plan must allow employees' adult children to enrol as well as long as the adult child is not yet age 26. Some group health insurance plans may also require that the adult child not be eligible for other group health insurance coverage, but only before 2014.
This extension of coverage will help cover one in three young adults, according to White House documents.
Federal employees health benefit plan
In addition to such public plans as Medicare and Medicaid, the federal government also sponsors a health benefit plan for federal employees—the Federal Employees Health Benefits Program . FEB provides health benefits to full-time civilian employees. Active-duty service members, retired service members and their dependence are covered through the Department of Defence Military Health System . FEB is managed by the federal Office of Personnel Management.
"Portability" of group coverage
Two federal laws address the ability of individuals with employment-based health insurance coverage to maintain coverage.
The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) enables certain individuals with employer-sponsored coverage to extend their coverage if certain "qualifying events" would otherwise cause them to lose it. Employers may require COBRA-qualified individuals to pay the full cost of coverage, and coverage cannot be extended indefinitely. COBRA only applies to firms with 20 or more employees, although some states also have "mini-COBRA" laws that apply to small employers.
The Health Insurance Portability and Accountability Act of 1996 (HIP) provides for forms of both "group-to-group" and "group-to-individual" portability. When an individual moves from one employer's benefit plan to another's, the new plan must count coverage under the old plan against any waiting period for pre-existing conditions, as long as there is not a break in coverage of more than 63 days between the two plans. When certain qualified individuals lose group coverage altogether, they must be guaranteed access to some form of individual coverage. To qualify, they must have at least 18 months of prior continuous coverage. The details of access and the price of coverage are determined on a state-by-state basis.
