HEALTH INSURANCE
Health Insurance
Health insurance is a contract between a company and a consumer. The company agrees to pay all or some of the insured person’s healthcare costs in return for payment of a monthly premium.
The contract is usually a one-year agreement, during which the insurer will be responsible for paying specific expenses related to illness, injury, pregnancy, or preventative care.
KEY TAKEAWAYS
- Health insurance pays most medical and surgical expenses and preventative care costs incurred by the insured person in return for a monthly premium payment.
- Generally, the higher the monthly premium is the lower the out-of-pocket costs are to the insured.
- Virtually all insurance plans have deductibles and co-pays but these out-of-pocket expenses are now capped by federal law.1
- Since 2010, the Affordable Care Act has prohibited insurance companies from denying coverage to patients with preexisting conditions and has allowed children to remain on their parents’ insurance plan until they reach the age of 26.2
- Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP) are federal health insurance plans that extend coverage to older, disabled, and low-income people.