How Private Health Insurance Works
Choosing an insurance plan that meets your needs can be overwhelming. The first step is to know the difference between public vs. private health insurance. Which one will be ok for you?
Private health insurance refers to health insurance plans controlled by the private health insurance industry, as opposed to government-run insurance programs. Currently, private health insurance has taken over almost half of the U.S population. The private health insurance company has played a significant role in assisting the public health insurance companies to lessen the burden of their buck coverage to a bearest minimum.
It is an insurance company that is under the control and management of private individuals other than the public (government). However, public health insurance refers to a health insurance plan controlled by the public health insurance industry. It is generally owned and managed by the government for the benefit of those under their coverage or protection.
Overall, most Americans are enrolled in a private health insurance plan, according to the U.S consensus bureau. The rest may have coverage through a public or government program like Medicaid or Medicare. Employer-based coverage continues to be the most common, followed by 19% of Americans with Medicaid and 17% with Medicare. Purchasing private health insurance is not compulsory.
The decision of whether or not to purchase private health insurance may affect your tax obligations and your ability to access the medical treatment of your choice. Ask yourself whether you can afford to have private health insurance and whether it will incur any costs if you do not have it.
A premium is the amount of money that an individual or business pays to an insurance company for coverage. Private Health insurance premiums are typically paid monthly. Employers that offer an employer-sponsored health insurance plan typically cover part of the insurance premiums. If you need to insure yourself, you’ll be paying the full cost of the premiums.
It is common to be concerned about how much it will cost to purchase health insurance for yourself. However, there are various options and prices available to you based on the level of coverage that you need. When purchasing your own insurance, the process is more complicated than simply selecting a company plan and having the premium payments come straight out of your paycheck every month
Is it Compulsory to have Private Health Insurance?
Purchasing private health insurance is not compulsory. The decision of whether or not to purchase private health insurance may affect your tax obligations and your ability to access the medical treatment of your choice.
Ask yourself whether you can afford to have private health insurance and whether it will incur any costs if you do not have it. The choice to purchase private health insurance is determined by the income level of the party involved. However, it is not compulsory to have private health insurance but it is necessary.
The Medicare Levy Surcharge, as distinct from the Medicare Levy, is an additional tax imposed on high-income earners who do not have a prescribed level of private health insurance. Only taxpayers with a taxable income above a certain threshold ($90,000 for individuals or $180,000 for families as of 2016/2017) will save on the Medicare Levy Surcharge by purchasing appropriate private health insurance.
The majority of Australian consumers do not incur the Medicare Levy Surcharge and are not able to save on tax by purchasing health insurance. Queries regarding the Medicare Levy Surcharge should be directed to the Australian Taxation Office (see link below).
Private health insurers cover some of the cost of treatment for private patients in private or public hospitals and can cover some additional services that Medicare generally does not, such as dental, optical, physiotherapy, and chiropractic care.
Private health insurance also gives you more choices in your healthcare, for instance, the ability to choose your surgeon/obstetrician/specialist and the hospital you prefer from the private health insurer’s agreed providers.
If you go to a private hospital, you will also often be able to gain treatment faster than you might do on a public waiting list. Another reason consumers buy private health insurance is to respond to government incentives and taxation policies.
Why Do I Need to Have Private Health Insurance Cover?
You may need to purchase individual healthcare coverage if you are up to 26 years old, and at the same time unemployed or self-employed, work part-time, are starting a business that will have employees, or have recently retired., it’s important to enroll in an individual plan as soon as possible. (The fine for failing to obtain coverage was canceled in 2019.). This is because of the risk exposure we enter into on daily bases.
Even though private health insurance is not compulsory, but for a fact, you cannot predict when an accident will occur that will require medical attention. Even a minor broken bone can have major financial consequences if you’re uninsured.
If you purchase insurance through the private health insurance market place you may be eligible for income-based premium tax credits or cost-sharing reductions. The marketplace is a platform that offers insurance plans to individuals, families, and small businesses.
The ACA established the marketplace as a means to achieve maximum compliance with the mandate that all Americans be enrolled in health insurance. Many states offer their own marketplaces, while the federal government manages an exchange open to residents of other states.
While you may not be able to afford the same kind of plan that an employer would offer you, any amount of coverage is more advantageous than none. In the event of a major accident or a long-term illness, you will be prepared.
However, you need private health insurance protection to have yourself and your family’s health covered from unexpected misfortune arising from either of the following
c. Natural disasters
d. fire outbreak
e. Pregnant woman
Note: private health insurance places the same coverage or protection as government-owned insurance companies. However, private insurance protection is opposed by the public (government-run programs) like Medicare and Medicaid.
But as noted above, most types of private health insurance have to comply with a variety of state and federal regulations, despite the fact that the companies selling the coverage are privately-run. but are always under the regulation and legal control of the government.