Health Insurance

Health insurance protects people from the high and unpredictable costs of illness and injury. How it works varies greatly between countries.

In many countries, including the United Kingdom, Canada and most of Europe, governments provide or fund healthcare for all residents through taxes or compulsory social insurance, and private health insurance is optional, often used for faster access or extra services. In the United States, many people get private health insurance through their employer, while government programmes such as Medicare and Medicaid cover older people and those on low incomes.

Private health insurance policies usually involve several cost-sharing features. The policyholder pays a premium, and may also pay a deductible before cover begins, a fixed copayment for certain services, and a percentage of costs called coinsurance. Many policies, particularly in the United States, include an out-of-pocket maximum that caps the total amount the policyholder pays in a year.

For example, a policy might cover most hospital costs after the policyholder pays a deductible of 1,000. Policies differ widely in which doctors and hospitals are included, which treatments are covered and what exclusions apply.