Читать книгу Risk Management and Financial Institutions - Hull John C. - Страница 37

Health insurance has some of the attributes of property-casualty insurance and some of the attributes of life insurance. It is sometimes considered to be a totally separate category of insurance. The extent to which health care is provided by the government varies from country to country. In the United States publicly funded health care has traditionally been limited and health insurance has therefore been an important consideration for most people. Canada is at the other extreme: nearly all health care needs are provided by a publicly funded system. Doctors are not allowed to offer most services privately. The main role of health insurance in Canada is to cover prescription costs and dental care, which are not funded publicly. In most other countries, there is a mixture of public and private health care. The United Kingdom, for example, has a publicly funded health care system, but some individuals buy insurance to have access to a private system that operates side by side with the public system. (The main advantage of private health insurance is a reduction in waiting times for routine elective surgery.)

In 2010, President Obama signed into law the Patient Protection and Affordable Care Act in an attempt to reform health care in the United States and increase the number of people with medical coverage. The eligibility for Medicaid (a program for low income individuals) was expanded and subsidies were provided for low and middle income families to help them buy insurance. The act prevents health insurers from taking pre-existing medical conditions into account and requires employers to provide coverage to their employees or pay additional taxes. One difference between the United States and many other countries continues to be that health insurance is largely provided by the private rather than the public sector.

In health insurance, as in other forms of insurance, the policyholder makes regular premium payments and payouts are triggered by events. Examples of such events are the policyholder needing an examination by a doctor, the policyholder requiring treatment at a hospital, and the policyholder requiring prescription medication. Typically the premiums increase because of overall increases in the costs of providing health care. However, they usually cannot increase because the health of the policyholder deteriorates. It is interesting to compare health insurance with auto insurance and life insurance in this respect. An auto insurance premium can increase (and usually does) if the policyholder's driving record indicates that expected payouts have increased and if the costs of repairs to automobiles have increased. Life insurance premiums do not increase – even if the policyholder is diagnosed with a health problem that significantly reduces life expectancy. Health insurance premiums are like life insurance premiums in that changes to the insurance company's assessment of the risk of a payout do not lead to an increase in premiums. However, it is like auto insurance in that increases in the overall costs of meeting claims do lead to premium increases.

Of course, when a policy is first issued, an insurance company does its best to determine the risks it is taking on. In the case of life insurance, questions concerning the policyholder's health have to be answered, pre-existing medical conditions have to be declared, and physical examinations may be required. In the case of auto insurance, the policyholder's driving record is investigated. In both of these cases, insurance can be refused. In the case of health insurance, legislation sometimes determines the circumstances under which insurance can be refused. As indicated earlier, the Patient Protection and Affordable Health Care Act makes it very difficult for insurance companies in the United States to refuse applications because of pre-existing medical conditions.

Health insurance is often provided by the group health insurance plans of employers. These plans typically cover the employee and the employee's family. The cost of the health insurance is sometimes split between the employer and employee. The expenses that are covered vary from plan to plan. In the United States, most plans cover basic medical needs such as medical check-ups, physicals, treatments for common disorders, surgery, and hospital stays. Pregnancy costs may or may not be covered. Procedures such as cosmetic surgery are usually not covered.