Why You Need Health Insurance
- How health insurance protects you and your family
In the United States, if you do not have health insurance coverage (medical insurance), you have to pay for health care out of your own finances at the time of service. This can run into many thousands of dollars for serious illnesses.
You buy health insurance for the same reason you buy other kinds of insurance: to protect yourself financially. With health insurance, you protect yourself and your family in case you need medical care that could be very expensive.
You cannot predict what your medical bills will be. In a good year, your costs may be low. But if you become ill, your bills could be very high. If you have health insurance, many of your costs are covered by a third-party payer, not by you. A third-party payer can be an insurance company or, in some cases, it can be your employer.
Many people in the United States are enrolled in some sort of managed care health insurance plan. This is an organized way of both providing services and paying for them. Different types of managed care plans work differently and include preferred provider organizations (PPOs), health maintenance organizations (HMOs), point-of-service (POS) plans and fee-for-service plans. These plans are all described on the page: Types of Health Insurance Plans in the US: HMO, POS, PPO.
Individuals enrolled in health care plans pay a monthly or quarterly fee for health insurance coverage as insurance for the time when they will need medical attention. At the time when a service is provided, the health insurance organization pays part or all of the fee, minimizing the amount you have to pay at the time you receive the service.
The information presented here will help you choose a health insurance plan that is right for you. If you are married or single, have children or no children, this information will help you to find out how to choose a health insurance plan that best meets your needs and your financial circumstances. Definitions of the health insurance terms used are included on the page called Understanding Health Insurance Terms.