What is Health Insurance?


History of Medical Coverage

Several hospitals in the United States allowed individuals to prepay for medical expenses during the 1920s. By the 1930s, an organization was developed named Blue Cross that still exists today. Eventually, groups of teachers organized plans to assist with medical expenses. However, members of these plans could only receive financial assistance at one hospital.

Coverage for accidents began in the 1860s due to risks incurred by individuals working on steamboats and railroads. The Great Depression years of the 1930s increased the awareness of a need for government assistance for medical costs incurred from illnesses or accidents. During this time, the American Medical Association fought against any type of health insurance coverage including government, employer or privately paid varieties. Employers began to offer fringe benefits such as medical coverage during the early 1940s to attract employees to low wage jobs.

How is Medical Coverage Helpful?

Medical coverage plans are varied, complex and at different price levels. Individuals may have medical coverage from an employer that is completely paid as a fringe benefit. Instead of fully paid medical coverage, an employer may subsidize the cost of a medical coverage plan. Partially paid plans typically have a portion of an employee’s wages deducted from paychecks automatically.

Individuals can also choose to pay for medical coverage independently. Federal and regional governmental agencies have health insurance coverage for particular groups of individuals. Individuals covered by government sponsored programs may include children, pregnant women, senior citizens, military personnel and other groups. An individual must carefully read a medical coverage plan to determine the benefits. The benefits may be assistance with routine physician’s office visits, medical tests, emergency room visits, surgeries, medications and other services.

Advantages of Medical Coverage

Having medical coverage offers several advantages to ill or injured individuals. Medical facilities such as hospitals, nursing homes, physician’s offices and others negotiate with health insurance companies for reduced rates. An individual without coverage usually pays more for surgeries, diagnostic testing, examinations and other services. Medical facilities can also require uninsured patients to pay up-front for non-emergency procedures. After a serious injury or illness, individuals without coverage can have medical costs that result in filing bankruptcy. The process of paying small amounts of money each week or month for medical coverage plans can prevent economic hardship. In addition, medical plans may offer coverage to assist with preventing serious illness from occurring.
Disclaimer: This is for information purposes only and NOT a recommendation from Mills Insurance. Please contact a licensed insurance specialist to discuss insurance coverage’s and laws.

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