More than half of Americans say they are “hopelessly confused” about health insurance, according to a survey from OnePoll and Bend Financial. When asked to test their knowledge of the subject, respondents collectively earned what would equate to a grade of D on an academic quiz.
This lack of understanding comes with high risks, as about 60 percent of respondents said they put off making medical appointments because of their confusion and their insurance’s complexity. Around 15 percent of respondents were unsure of whether or not they had coverage at all.
Another area that is confusing to many individuals is the difference between public health insurance and private health insurance. Following is a comparison of public vs. private health insurance. Skilled healthcare administrators, such as those with a Master of Health Administration, are needed to help patients navigate the complex healthcare system and ensure their health needs are met.
What Is Health Insurance?
Health insurance is a type of insurance in which the insurer agrees to pay for many of the healthcare costs incurred by an individual and sometimes their immediate family members. This type of insurance typically helps pay for both preventive health care and health care related to an illness, disease, or injury.
For instance, if someone is diagnosed with diabetes, their health insurance will likely help pay for their doctor visits related to the disease, their insulin prescription, as well as any additional treatments they may need. However, most health insurers also strive to take a proactive approach to health care by also providing coverage for preventive services such as annual wellness exams and immunizations.
What Is a Health Insurance Plan?
A person’s health insurance plan, which may also be called a health plan or a health policy, dictates which healthcare services and prescriptions are covered and how much coverage is provided. Private health insurance typically also sets a monthly premium.
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What Is Public Health Insurance?
Health insurance in the United States can be divided into two categories: public and private health insurance. While the majority of Americans have private health insurance, some have public health insurance, which they receive through government programs at the federal, state, or local level.
The main public health insurance programs in the United States are Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), the Indian Health Service (IHS), coverage through the Department of Veterans Affairs, and state-specific programs.
How Does Public Health Insurance Work?
Public health insurance is funded by taxpayers and pays for the health care expenses of people who are typically most at risk of being uninsured. Medicare, for instance, is a public health insurance program that is primarily for people over the age of 65. It covers hospital and medical expenses. Services must be deemed medically necessary in order to be covered by Medicare.
Medicare does not cover all medical expenses, and many people over the age of 65 also have a private health insurance plan called Medigap that supplements their public insurance. As of 2022, about 4 out of every 10 people on Medicare had an additional health insurance policy, according to KFF.
What Is Private Health Insurance?
Private health insurance is a type of insurance that is provided by a health insurance company. Individuals get private health insurance through their employer, through another organization they are affiliated with, or by enrolling in a plan directly.
How Does Private Health Insurance Work?
Private health insurance can generally be divided into four types: employer-based health insurance, directly purchased health insurance, one’s own employment-based health insurance, and TRICARE.
Employer-based health insurance is provided by an employer or a union and can cover the employee and their immediate family members, while one’s own employment-based health insurance usually only covers the policyholder.
Directly purchased health insurance is purchased by an individual directly from an insurance company. TRICARE is only available to active duty and retired members of the armed services and their families.
Typically, private health insurance plans pay for agreed-upon specific medical expenses in exchange for a monthly premium. In the case of employer-based health insurance, the employer provides the employee with a health insurance plan they can choose to opt into. The employer may pay the full premium, a percentage of the premium, or none of the premium. Employer-based health insurance is the most common type of health insurance in the United States.
Health Insurance Challenges
According to a 2023 survey by KFF, a provider of independent research and polling on health policy, 4 in 10 insured adults in the United States put off going to the doctor because of costs, with those with private health insurance being more concerned about premiums and out-of-pocket costs than those with public health insurance. More than 25 percent of insured adults enrolled in public and private health insurance plans said there was a time in the past year when their insurance paid less than they expected, with 18 percent saying there was a time when their insurance paid nothing for something they thought would be covered.
Overall, about 60 percent of insured adults said they had some type of problem, such as their health insurance denying coverage, in the past year.
Help Make Public and Private Health Insurance Work Better for Patients as a Healthcare Administrator
As mentioned earlier, many Americans do not fully understand how their health insurance works. By enrolling in the Online Master of Health Administration program at Tulane University, you can prepare to become a change-maker who helps make the complex healthcare insurance system simpler and helps patients and policyholders become more informed.
Through this flexible master’s degree program, you can learn how to become a healthcare advocate who overcomes impediments to communication in health care, helping to ensure that patients feel heard and supported, particularly during some of their most vulnerable moments. This online program is designed for early to mid-career healthcare professionals who strive to lead change in the nation’s healthcare system.
Help shape the future of health care with a degree from Tulane University.
Advance Your Public Health Career with a DrPH in Leadership, Advocacy & Equity
Pursue Your Degree Online From Tulane University
Recommended Readings
What Is Strategic Management in Health Care?
Patient-Centered Care: Definition and Examples
What Is Quality Improvement in Healthcare?
Sources:
Bend Financial, “More Than Half of Americans Confused by Health Insurance, Including HSAs”
HealthCare.gov, Medicaid and CHIP Coverage
KFF, “Key Facts About Medigap Enrollment and Premiums for Medicare Beneficiaries”
KFF, “KFF Survey of Consumer Experiences With Health Insurance”
Medicare.gov, How Does Medicare Work?
Medicare.gov, What’s Medicare Supplement Insurance (Medigap)?
State Health Access Data Assistance Center, Health Insurance Coverage Type
ScienceDirect, Public Health Insurance
U.S. Census Bureau, Health Insurance Glossary
U.S. Department of Health and Human Services, Health Insurance Basics