To determine the definition of health insurance, two aspects are in play: protection against financial risk. This is due to the deductibles that health insurance plans have. The deductibles are the amount a person must pay before their insurance company begins paying. When that deductible has been met, the individual will not have to incur additional medical expenses. People who do not have health insurance don't have the benefit of deductibles, and therefore there's no cap or limit to the cost of medical care.
The second aspect of this system is that it creates a network of pharmacies and organizations that offer medical treatment. Health insurance is responsible for curating what type of health care patients can access. This includes the doctors who can treat you, which clinics and hospitals you can visit and the types of prescription drugs you can purchase at the most affordable cost. Health insurance protects against catastrophic medical expenses, including surgeries, hospitalizations, emergency medical care, and access to a network of healthcare providers; however, it comes with the cost.
Average Health Insurance Costs
Within the U.S., 55% of Americans receive health insurance from their employers, and 20% get health insurance through government assistance, either through Medicaid (available to low-income people) or Medicare (for those aged 65 or older and certain people who have disabilities) as per the U.S. Census Bureau. Certain individuals decide to buy insurance on their own, most often those who are self-employed. In addition, eight percent of people residing in the United States do not have health insurance coverage.
According to figures collected by the Kaiser Family Foundation, the health insurance premium for a single individual covered in the year 2020 costs $7,040 per year. The cost of health insurance for the entire couple in 2020 is $21,342 per year. These figures represent the amount one must pay for a health insurance premium. A premium is a monthly payment that you make to the company that provides your health insurance.
A premium is distinct from a deductible. "A premium is the amount you pay upfront each month regardless of whether you are covered by health insurance. A deductible is a cost you must pay in insurance plans if you receive health insurance. For instance, if the minimum deductible of the health insurance plan is $1,000 per year, you'll be required to pay the medical expenses that exceed that amount.
The Factors That Influence Health Insurance Rates
For a specific health insurance policy, the insurance cost is determined by specific elements that the law has established. States have the power to limit the extent to which these factors affect the cost of your insurance: For example, states like California or New York don't allow the price of health insurance plans to differ in tobacco use.
Age
The cost of health insurance for each individual covered by the policy is determined by the person's age, with rates rising as the person ages. Children younger than 14 years of age will pay a flat fee to be added to an insurance policy, but the premiums will typically rise annually starting around age 15.
Where Do You Live
Health insurance companies decide on the policies they offer, and the cost of the coverage is determined by the location and state you reside in. For instance, a person who lives in Miami-Dade County in southern Florida is, for example, likely to be charged lower rates for the same coverage as a person who lives in Jackson County in the Florida Panhandle.
Smoking/Tobacco Use
Smokers may be charged up to 50% more premiums for health insurance; however, the government sets the maximum amount.
The Number of People Who Are Insured
The cost of health insurance is determined by the number of individuals covered, in addition to the individual's age and perhaps the amount of tobacco they use. For instance, a family of three with two adults and a child would be paying a greater cost for health insurance monthly than one person.
Affordable Health Insurance
Group plans tend to be less expensive as compared to individual plans. If you're qualified for one through your employer, union, or another association, that's the best choice regarding coverage for the cost. If you're not eligible, the public health marketplaces under the Affordable Care Act offer affordable individual health insurance. In most of the U.S., you can enroll in a health plan through the federal government on the HealthCare.gov website. But, 12 states have their marketplaces, and residents can sign up on their websites.
