Health Insurance

Health insurance is insurance against the risk of incurring medical expenses among individuals. By estimating the overall risk of health care expenses among a targeted group, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to ensure that money is available to pay for the health care benefits specified in the insurance agreement. The benefit is administered by a central organization such as a government agency, private business, or not-for-profit entity. 

The United States health care system relies heavily on private health insurance, which is the primary source of coverage for most Americans. According to the CDC, approximately 58% of Americans have private health insurance. Public programs provide the primary source of coverage for most senior citizens and for low-income children and families who meet certain eligibility requirements. The primary public programs are Medicare, a federal social insurance program for seniors and certain disabled individuals, Medicaid, funded jointly by the federal government and states but administered at the state level, which covers certain very low income children and their families, and SCHIP, also a federal-state partnership that serves certain children and families who do not qualify for Medicaid but who cannot afford private coverage. Other public programs include military health benefits provided through TRICARE and the Veterans Health Administration and benefits provided through the Indian Health Service. Some states have additional programs for low-income individuals.

Prior to the recent health care reforms, there was a great deal of dissatisfaction with the insurance industry which was regarded as dysfunctional. In the late 1990s and early 2000s, health advocacy companies began to appear to help patients deal with the complexities of the healthcare system. The complexity of the healthcare system has resulted in a variety of problems for the American public. A study had found that 62 percent of persons declaring bankruptcy in 2007 had unpaid medical expenses of over of $1000 or more, and in 92% of these cases the medical debts exceeded $5000. Nearly 80 percent who filed for bankruptcy had health insurance The Medicare and Medicaid programs were estimated to soon account for 50 percent of all national health spending. These factors and many others fueled interest in an overhaul of the health care system in the United States. In 2010 President Obama signed into law the Patient Protection and Affordable Care Act. This Act included a main provision which the American medical insurance industry lobby group, America's Health Insurance Plans had called for, namely a mandate that every American must have medical insurance (or pay a fine) as a quid pro quo for "guaranteed issue", i.e. the dropping of unpopular features of America's health insurance system such as premium weightings and exclusions for pre-existing conditions and the pre-screening of insurance applicants.