Question

Discuss the individual ways of financing healthcare.

Answer 1

There are four ways of financing individual health care:

1. Private insurance

2. Government insurance programs

3. People Themselves ( Personal, Out of pocket funds)

Each one of them can be seen detailed way:

1. PRIVATE INSURANCE:

Private insurance can be purchased from for-profit and not-for-profit insurance companies. Most private insurance is purchased by corporations as a benefit for employees. Costs are typically shared by employers and employees. The amount of money employers spend on an employee's health insurance is not considered taxable income for the employee. In effect, the government is subsidizing this insurance to some degree. People may also purchase private health insurance themselves

2.GOVERNMENT INSURANCE PROGRAMS:

• State Children’s Health Insurance Program: This program was designed to help provide coverage for uninsured children when their family's income was below average but too high to qualify for Medicaid. The federal government provides matching funds to states for health insurance for these families
• Children and Youth with Special Health Care Needs: This program coordinates funding and resources to provide care to people with special health needs
• Indian Health Service: This system of government hospitals and clinics provides health services to about 2 million American Indians and Alaskan natives living on or near a reservation

Overall, about 35% of the population is covered by government insurance or government-provided care.

3. OUT OF POCKET:

When care is not covered by other sources, people pay out of their own funds. They often must use their savings to pay small bills and must borrow (including using credit cards) to pay large bills.

Flexible spending accounts are offered by some employers. Through these accounts, employees can choose to have a limited amount of money deducted from their salaries to pay for out-of-pocket health care expenses. However, the account does not earn interest, and if any money is unused at the end of the year, the employee does not get it back.

Health savings accounts can also be used to pay out-of-pocket expenses. These accounts earn interest, and any unused money is not lost. However, to be eligible to use a health savings account, people must have a health insurance plan that has lower premiums and higher deductibles than a traditional health plan. Such plans are called high-deductible health plans.