Private Vs. Public Health Insurance — Which One Are You Eligible For?
Health insurance covers your medical expenses to the extent mentioned in your policy. You will find two significant types of health insurance in the US- Private and Public. Both these health insurances fulfill the same purpose in different manners. It is confusing to select between private and public health insurance as a consumer. Both private and public have pros and cons. You have to equip yourself with the information and choose the one that works best for you.
What Is Private Health Insurance?
Private health insurance is the policy offered by private organizations. You enter into a contract with a private entity to cover your medical expenses in return for the periodic premiums. There are two kinds of private health insurance:
1. Employer-Sponsored
When the employer enters into the contract with a private insurance company and offers you health insurance as part of the employee program, you and your employer will share the premium payments. Your employer will pay a predetermined amount of the health insurance premium, and the rest of the amount will be automatically deducted from your salary. Such private health insurance is known as employer-sponsored insurance.
2. Individual and Family Health Insurance
If you apply for health insurance directly for yourself or your family, it will come under this category. According to the Affordable Care Act, companies with more than 50 full-time employees need employer-sponsored insurance. If your company does not provide health insurance, you can perform research and select the most suitable private health insurer on your own. In the United States, you can even contact an agent or broker to help you out with individual insurance.
So What Pros And Cons Of Private Health Insurance?
Pros:
- Customizable approach
You can get a customized policy based on your needs, budgets, and goals in private health insurance. Since the private sector is more flexible. - Reduced Wait Time
A fewer number of people approach the provider networks in private health insurance. Thus, you don’t have to face a crowd before getting treatment covered under your insurance. - More Options
You can select the most suitable health insurance from a range of choices. You gave me the power to sort, compare and confirm. - Competitive
Private health insurance is a competitive market, and everyone is trying to acquire more and more customers. They try to gain a competitive edge by improving their services.
Cons:
- Long process
To determine which type of plan you need, you must go through a long process. Answering all the questions and filling in the forms proves to be tiring. - Expensive
Private health insurance offers premium services for higher premium prices. Since the companies are working on the profit-based business model, your expenses increase in this arrangement. - Unreliability
You have plenty of options in the market, and it’s difficult to point the finger at the unworthy. You have to run background tests and check reviews of existing consumers before entering into a contract with any private service provider.
What Is Public Health Insurance?
If you apply for health insurance directly for yourself or your family, it will come under this category. According to the Affordable Care Act, companies with more than 50 full-time employees need employer-sponsored insurance. If your company does not provide health insurance, you can perform research and select the most suitable private health insurer on your own. In the United States, you can even contact an agent or broker to help you out with individual insurance.
Public health insurance is of 3 types:
- Medicare
Medicare is for the elderly or disabled who have paid into the Social Security System for a decade. It is also applicable to the spouses of the concerned party. Federal health insurance works in 2 parts- PART A (hospital care) and PART B (medical services). To apply for Medicare, you must be either:
1. 65 years old and above or
2. Disabled, have ESRD (End-Stage Renal Disease) or
3. Eligible for social security benefits.
In Medicare, you don’t have to pay a premium for the services included in part A if you paid the Medicare taxes during your employment period. - Medicaid
Medicaid is funded jointly by the federal and state government to offer low-income children and families medical coverage. The eligibility is decided based on disability, income, family status, household size, and other factors. The Affordable care Act expanded the qualification for Medicaid. Initially, it focused on children and pregnant women, but now you can apply based on your income. The eligibility criteria differ state-wise. If your household income is below 133% of the federal poverty level in the states offering expanded Medicaid, you are eligible. - The Children Health Insurance Program (CHIP)
CHIP covers the medical charges of children whose family income is too high to qualify for Medicaid but not enough to apply for private health insurance. The purpose is to fill the gap between the prices and offer low-cost health coverage to children. You have to pay nominal expenses for CHIP based on your state, but it cannot be more than 5% of your household income.
So What Pros And Cons Of Public Health Insurance?
Pros:
- Standardization
All the public health insurance policies meet the Affordable Care Act’s requirements for Minimum Essential Coverage. This includes covering at least 60%of the costs with the insured person and covering the ten essential health benefits:
1. Hospitalization
2. Ambulatory Patient Services
3. Paediatric Services
4. Laboratory Services
5. Emergency Services
6. Prescription Drugs
7. Mental Health and Addiction Services
8. Preventive and Wellness Services and Chronic Disease Management.
9. Rehabilitative and Habilitative Services and Devices
10. Pregnancy, Maternity, and Newborn Care
Every policy is standardized, and thus you can easily select the most beneficial one. - No questions asked
If you pass the eligibility criteria, you can easily apply for any selected public health insurance without any questions asked. You have to choose your insurance policy in the marketplace. - Reliable
You can trust a public institution as they function on a large scale and have credibility attached. - Affordable
Public health insurance is affordable for all since it aims to protect people who don’t have expendable income. The main reason for the fees to be nominal is because the public funds it.
Cons:
- Rigid
Public health insurance doesn’t offer you a massive number of options. You have to select from the available choices and comply with the stated terms and conditions. Since they don’t have any competition, they don’t need to make frequent changes to survive. - Restrictive
The providers’ network of public health insurance is restrictive to only the selected medical institutions. Since you don’t have other options to choose from, you have to settle for the professionals within the network. If you decide to visit a private doctor, you will incur the charges, and the insurance won’t cover anything. - Time-taking
Due to the affordable services and mass reach of public health insurance, it is not rare to find a long queue to avail of the listed services. To gain the advantage of public health insurance, you will have to wait.
How Is Private Health Insurance Different From Public Health Insurance?
Provider
Public Health Insurance: Federal or state government
Private Health Insurance: Private organization
Options
Public Health Insurance: 3 options available- Medicare, Medicaid, CHIP
Private Health Insurance: Plenty of policies available in the private market
Affordability
Public Health Insurance: Have affordable plans for low-income families and individuals.
Private Health Insurance: Comparatively expensive.
Coverage
Public Health Insurance: Offers standard coverage based on the Minimum essential coverage mentioned in the Affordable Care Act (Obamacare).
Private Health Insurance: The coverage is based on the policy you select. The high priced has higher coverage and vice versa.
Enrolment Process
Public Health Insurance: It is simpler to enroll for public health insurance as it has question-asked policies.
Private Health Insurance: The enrolment process is time-consuming because it requires.
Credibility
Public Health Insurance: High credibility.
Private Health Insurance: Depends on the organization selected.
Customization
Public Health Insurance: No customization included
Private Health Insurance: Private health insurance are flexible and can be customized
Based on the information you can decide who won The Private vs public health insurance plan in your stadium. You have to make the decision according to your needs, goals, budgets, and current situation.
