How health care is financed varies greatly from country to country, and sometimes even from state to state within the same country. There are many countries where the government, rather than patients or private insurers, pays for health care costs. Canada does for instance have a so called single-payer system where taxes are used to pay for health care services provided by private organizations. In the United Kingdom, tax funded health care is typically carried out by health care providers own and managed by the state.
Even people who live in a country where tax funded health care is available free or for a low fee may be interested in purchasing private health insurance, for themselves and for their employees. The reasons vary from country to country, and also based on individual circumstances.
Here are a few examples:
- Quicker access to health care. Not having to wait a long time to see a medical health professional and be treated isn’t just better for the patient, it can usually cut down on sick leave days as well which is good for the employer.
- Access to health care that is (or is perceived to be) of a higher standard than the tax funded one
- Access to health care that isn’t available at tax funded clinics and hospitals, e.g. chiropractor treatment.
- A private hospital room instead of a shared one.
- In countries where dental care isn’t tax funded, a private health insurance policy or dental insurance policy can be a great idea.
- In some countries, medicines are not tax funded or just partly tax funded, a private health insurance can keep you protected from huge medicine expenses.
- Health insurance can pay for out-of-pocket expenses associated with otherwise tax funded hospital care.
- In some countries, getting a second opinion from another doctor than your primary care giver will not be available at all or difficult to obtain for those seeking tax funded health care.
- Private health insurance can come with preventive care and regular check ups not offered by tax funded health care facilities.
- Some health insurance policies will include travel health insurance, to keep you covered when you travel abroad.
- Some health insurance policies come with accident insurance and will for instance pay out if you become disabled or scarred after an injury.
Health insurance terms
The monthly or yearly cost payed by the insured to remain covered by the health insurance policy. (When an employee obtains health insurance through its employer, this cost is paid by the employer.)
The amount that the insured must pay out-of-pocket each year before the health insurance policy starts paying for health care. The size of the deductible can vary significantly between different health care plans.
There may also be certain things included in the health care insurance plan that the insured does not pay a deductible for, such as yearly health check-ups or other forms of preventive care.
This is the amount that the insured must pay out-of-pocket before the health insurer pays for a particular visit or service.
Example: With this health insurance plan, you will co-pay $30 for each doctor’s visit. So, if the total cost of a visit is $100, the insured pays $30 and the insurer pays $70.
With some policies, co-payments do not count towards the deductible.
Some health care insurance policies have a cap on how much they will pay.
- This health insurance policy will pay a maximum of $500,000 per year and insured. Any costs above that each year, the insured must pay out-of-pocket.
- This health insurance policy will pay a maximum of $7 million per insured. This is a lifetime maximum for the total endurance of the insurance policy. Once the insured has reached the $7 million cap, the health insurance policy will never pay any more health care costs for the insured. Anything above $7 million must this be paid out-of-pocket by the insured.