What is health insurance?

Health insurance is an insurance plan where the insurer pays for the medical costs of the person being covered. When the person covered under the health insurance plan becomes sick, the insurance company (insurer) pays the medical costs on behalf of the individual who is covered.

The insurer may be a private organization or a government entity. Market based health care systems, like the one in the United States, rely primarily on private health insurance companies.

Why do we need health insurance?

Medical conditions can be costly and the cost of medicine has been consistently increasing. Health insurance plans protects your financial well being by mitigating your risks from the high medical care costs that can come about suddenly.

In most cases, many individuals receive their health insurance from their employers. The employer helps pay for that insurance and the plans have contracts with health care providers and medical facilities to provide care at reduced costs.

You can also purchase health insurances on your own. For most people, it will cost more than employer-based insurance plans, but individuals who meet certain requirements can qualify for government funded health insurance such as Medicare and Medicaid.

What factors are affecting insurance price?

Advances in medical technology and medical treatment has allowed for people in developed nations to live longer. But this longer life is creating a larger aging population who require more health care and more specialized medical assistance than the younger, healthier population. These factors cause an increase in the price of health insurance.

For the individual buying insurance, the cost can vary depending on the current health of the individual. Health related issues that can affect the overall insurance cost are: insufficient exercise, unhealthy food choices, living in impoverished or rural areas where access is more difficult, excessive alcohol use, smoking, drug use, and obesity