Private Health Insurance vs. Public Health Insurance
Health insurance is a subject that we've all heard so much about, but one that can also be very confusing. One of the most common questions people have is, "What plan is right for me?" Two of the terms you may have heard regarding health insurance is private health insurance and public health insurance. We'll take a look at what exactly these two types of health insurance plans are, the differences between the two, and how to determine which plan is right for you.
Private health insurance plans are plans that provided by private companies, such as an employer or other private insurance company. Currently, a majority of Americans receive their health coverage through private health insurance plans.
Health insurance that is provided to employees as a benefit of employment is called group coverage or group health insurance. As of 2015, health insurance reforms as a part of the Affordable Care Act (ACA), also known as Obamacare, require that all employers with over 50 full-time employees provide affordable health coverage to avoid a tax penalty. How much you will pay for these plans and how the payments will be made will vary depending on your employer, so be sure to talk to your Human Resources department for more information.
An alternative to employer-sponsored group coverage is individual coverage or individual health insurance. These are insurance plans that are purchased for yourself or your family through no association with an employer. Again, these costs will vary according to what kind of plan you choose and what benefits you will receive but overall, individual health insurance plans tend to cost less than group insurance plans.
Private Health Insurance: Pros
- Ability to choose your own physician
- More plan options available
- Wider network of providers to choose from
Private Health Insurance: Cons
- Generally more expensive than public health insurance
- Must pay monthly premiums whether you use services that month or not
- Better coverage and more flexibility means higher payments
Public Health Insurance
Public health insurance plans are plans that are in some way provided by the government. These plans are available to low-income individuals or families, the elderly, and other individuals that qualify for special groups.
Medicare is the federally-funded health insurance program for adults over age 65, qualifying, disabled younger people, and people who have been diagnosed with End-Stage Renal Disease (ESRD) also called End-Stage Kidney Disease. ESRD is the final stage of chronic kidney disease which over time, can lead to a complete loss of kidney function. Medical treatment is necessary to maintain kidney function which requires dialysis or transplant procedures. These treatments may be covered by this Medicare. Visit medicare.gov for more information.
Medicaid is health insurance program that is jointly funded by the federal and state governments. Medicaid provides health insurance to millions of low-income individuals and families, pregnant women, people with certain disabilities, as well as other qualified individuals. Visit medicaid.gov for more information about these services and qualifications.
Other Special Groups
Aside from Medicare and Medicaid, there are also other government-sponsored health care plans for specific individuals who may qualify.
Funded by the U.S. Department of Defense, Tricare provides health insurance for military service members and their families.
The U.S. Department of Veterans Affairs provides health insurance coverage to military veterans and some qualifying retired military service members.
Children's Health Insurance Program (CHIP)
Children's Health Insurance Program, also known as CHIP, is jointly funded by the federal and state governments and provides coverage to uninsured children and teenagers who do not qualify for medical assistance.
Public Health Insurance: Pros
- Overall more affordable than private health insurance plans
- May also qualify for assistance with other expenses
- Many plans require no co-pays or deductibles
Public Health Insurance: Cons
- Less flexibility to choose providers
- Many providers do not accept government-sponsored health insurance plans
- Limitations on covered treatment though they may be deemed necessary
At the end of the day, it's important to explore all of your health insurance options. It's also important to note that not everyone will qualify for public health insurance plans and obtain coverage through the private sector may be the way to find a plan for you and your family. Regardless of the stigmas surrounding both private and public health insurance options, both will protect you and your family from expensive medical bills.