Background

Health care costs in America are probably the most expensive in the world.  Unlike many developed nations, America does not have a form of socialized medicine except for Medicare and Medicaid.  Medicare is available only to U.S. citizens and permanent residents if they or their spouses have worked 10 years or longer in Medicare-covered employment.  Medicaid covers poor U.S. citizens only and is administered by state governments.  Generally, new immigrants find it very difficult to qualify for these two forms of medical coverage and therefore, like increasingly numbers of Americans, must pay for their own medical care. 

Although often expensive now, the best way to protect one’s self from the high cost of medical care is to buy some form of health insurance.  Many uninsured immigrants, and Americans, falsely believe that they will receive free medical care in America if they simply go to a public hospital.  While it is true the hospital may go ahead and provide treatment to such persons in the case of an emergency, the hospital will expect to be paid back for services even if it takes years of repayment.  And the hospitals have the legal means to ensure that they are compensated for services.  It is not difficult for a patient in a hospital to incur bills of many thousands of dollars for simple illnesses or tens of thousands of dollars for more serious illnesses.  These days, one risks long-term financial difficulty if they attempt to go without any type of health insurance.

Insurance is really just a way of managing monetary risk whereby the monetary risk of any one individual is spread out across the monetary risk of many individuals.  In its simplicity, insurance companies collect periodic, non-refundable fees from all individuals and pool that money together into a fund.  The insurance companies bet that at any given time far fewer individuals will require payment for claims than are the number of individuals paying periodic, non-refundable fees.  The end result should be that the insurance companies pay out less money than they take in therefore making the business profitable.  The more individuals paying into the insurance plan, the cheaper should be the cost to any one individual as the risk is spread over more and more people.  There are generally two types of health insurance – group health insurance and individual health insurance.

Background: You are here.
Types of Health Insurance
Options within Each Type of Health Insurance
Buying Health Insurance
How Health Insurance Works
Glossary of Terms