health insurance health insurance health insurance or medical insurance (also known as medical aid in south africa) is a type of insurance that covers the whole or a part of the risk of a person incurring medical expenses. as with other types of insurance, risk is shared among many individuals. by estimating the overall risk of health risk and health system expenses over the risk pool, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to provide the money to pay for the health care benefits specified in the insurance agreement. the benefit is administered by a central organization, such as a government agency, private business, or not-for-profit entity. according to the health insurance association of america, health insurance is defined as "coverage that provides for the payments of benefits as a result of sickness or injury. it includes insurance for losses from accident, medical expense, disability, or accidental death and dismemberment".: 225 background a health insurance policy is: a contract between an insurance provider (e.g. an insurance company or a government) and an individual or his/her sponsor (that is an employer or a community organization). the contract can be renewable (annually, monthly) or lifelong in the case of private insurance. it can also be mandatory for all citizens in the case of national plans. the type and amount of health care costs that will be covered by the health insurance provider are specified in writing, in a member contract or "evidence of coverage" booklet for private insurance, or in a national for public insurance. (us specific) in the u.s., there are two types of health insurance - tax payer-funded and private-funded. an example of a private-funded insurance plan is an employer-sponsored self-funded erisa plan. the company generally advertises that they have one of the big insurance companies. however, in an erisa case, that insurance company "doesn't engage in the act of insurance", they just administer it. therefore, erisa plans are not subject to state laws. erisa plans are governed by federal law under the jurisdiction of the us department of labor (usdol). the specific benefits or coverage details are found in the summary plan description (spd). an appeal must go through the insurance company, then to the employer's plan fiduciary. if still required, the fiduciary's decision can be brought to the usdol to review for erisa compliance, and then file a lawsuit in federal court. the individual insured person's obligations may take several forms: premium: the amount the policy-holder or their sponsor (e.g. an employer) pays to the health plan to purchase health coverage. (us specific) according to the healthcare law, a premium is calculated using 5 specific factors regarding the insured person. these factors are age, location, tobacco use, individual vs. family enrollment, and which plan category the insured chooses. under the affordable care act, the government pays a tax credit to cover part of the premium for persons who purchase private insurance through the insurance marketplace.: ts 4:03 deductible: the amount that the insured must pay out-of-pocket before the health insurer pays its share. for example, policy-holders might have to pay a $7500 deductible per year, before any of their health care is covered by the health insurer. it may take several doctor's visits or prescription refills before the insured person reaches the deductible and the insurance company starts to pay for care. furthermore, most policies do not apply co-pays for doctor's visits or prescriptions against your deductible. co-payment: the amount that the insured person must pay out of pocket before the health insurer pays for a particular visit or service. for example, an insured person might pay a $45 co-payment for a doctor's visit, or to obtain a prescription. a co-payment must be paid each time a particular service is obtained. coinsurance: instead of, or in addition to, paying a fixed amount up front (a co-payment), the co-insurance is a percentage of the total cost that an insured person may also pay. for example, the member might have to pay 20% of the cost of a surgery over and above a co-payment, while the insurance company pays the other 80%. if there is an upper limit on coinsurance, the policy-holder could end up owing very little, or a great deal, depending on the actual costs of the services they obtain. exclusions: not all services are covered. billed items like use-and-throw, taxes, etc. are excluded from admissible claim. the insured are generally expected to pay the full cost of non-covered services out of their own pockets. coverage limits: some health insurance policies only pay for health care up to a certain dollar amount. the insured person may be expected to pay any charges in excess of the health plan's maximum payment for a specific service. in addition, some insurance company schemes have annual or lifetime coverage maxima. in these cases, the health plan will stop payment when they reach the benefit maximum, and the policy-holder must pay all remaining costs. out-of-pocket maximum: similar to coverage limits, except that in this case, the insured person's payment obligation ends when they reach the out-of-pocket maximum, and health insurance pays all further covered costs. out-of-pocket maximum can be limited to a specific benefit category (such as prescription drugs) or can apply to all coverage provided during a specific benefit year. capitation: an amount paid by an insurer to a health care provider, for which the provider agrees to treat all members of the insurer. in-network provider: (u.s. term) a health care provider on a list of providers preselected by the insurer. the insurer will offer discounted coinsurance or co-payments, or additional benefits, to a plan member to see an in-network provider. generally, providers in network are providers who have a contract with the insurer to accept rates further discounted from the "usual and customary" charges the insurer pays to out-of-network providers. out-of-network provider: a health care provider that has not contracted with the plan. if using an out-of-network provider, the patient may have to pay full cost of the benefits and services received from that provider. even for emergency services, out-of-network providers may bill patients for some additional costs associated. prior authorization: a certification or authorization that an insurer provides prior to medical service occurring. obtaining an authorization means that the insurer is obligated to pay for the service, assuming it matches what was authorized. many smaller, routine services do not require authorization. formulary: the list of drugs that an insurance plan agrees to cover. explanation of benefits: a document that may be sent by an insurer to a patient explaining what was covered for a medical service, and how payment amount and patient responsibility amount were determined. in the case of emergency room billing, patients are notified within 30 days post service. patients are rarely notified of the cost of emergency room services in-person due to patient conditions and other logistics until receipt of this letter. prescription drug plans are a form of insurance offered through some health insurance plans. in the u.s., the patient usually pays a copayment and the prescription drug insurance part or all of the balance for drugs covered in the formulary of the plan.: ts 2:21 such plans are routinely part of national health insurance programs. for example, in the province of quebec, canada, prescription drug insurance is universally required as part of the public health insurance plan, but may be purchased and administered either through private or group plans, or through the public plan. some, if not most, health care providers in the united states will agree to bill the insurance company if patients are willing to sign an agreement that they will be responsible for the amount that the insurance company doesn't pay. the insurance company pays out of network providers according to "reasonable and customary" charges, which may be less than the provider's usual fee. the provider may also have a separate contract with the insurer to accept what amounts to a discounted rate or capitation to the provider's standard charges. it generally costs the patient less to use an in-network provider. comparisons health expenditure per capita (in ppp-adjusted us$) among several oecd member nations. data source: oecd's ilibrary the commonwealth fund, in its annual survey, "mirror, mirror on the wall", compares the performance of the health care systems in australia, new zealand, the united kingdom, germany, canada and the u.s. its 2007 study found that, although the u.s. system is the most expensive, it consistently under-performs compared to the other countries. one difference between the u.s. and the other countries in the study is that the u.s. is the only country without universal health insurance coverage. life expectancy of the total population at birth among several oecd member nations. data source: oecd's ilibrary the commonwealth fund completed its thirteenth annual health policy survey in 2010. a study of the survey "found significant differences in access, cost burdens, and problems with health insurance that are associated with insurance design". of the countries surveyed, the results indicated that people in the united states had more out-of-pocket expenses, more disputes with insurance companies than other countries, and more insurance payments denied; paperwork was also higher although germany had similarly high levels of paperwork. australia main article: health care in australia the australian public health system is called medicare, which provides free universal access to hospital treatment and subsidised out-of-hospital medical treatment. it is funded by a 2% tax levy on all taxpayers, an extra 1% levy on high income earners, as well as general revenue. the private health system is funded by a number of private health insurance organizations. the largest of these is medibank private limited, which was, until 2014, a government-owned entity, when it was privatized and listed on the australian stock exchange. australian health funds can be either 'for profit' including bupa and nib; 'mutual' including australian unity; or 'non-profit' including gmhba, hcf and the hbf health insurance. some, such as police health, have membership restricted to particular groups, but the majority have open membership. membership to most health funds is now also available through comparison websites. these comparison sites operate on a commission-basis by agreement with their participating health funds. the private health insurance ombudsman also operates a free website that allows consumers to search for and compare private health insurers' products, which includes information on price and level of cover. most aspects of private health insurance in australia are regulated by the private health insurance act 2007. complaints and reporting of the private health industry is carried out by an independent government agency, the private health insurance ombudsman. the ombudsman publishes an annual report that outlines the number and nature of complaints per health fund compared to their market share the private health system in australia operates on a "community rating" basis, whereby premiums do not vary solely because of a person's previous medical history, the current state of health, or (generally speaking) their age (but see lifetime health cover below). balancing this are waiting periods, in particular for pre-existing conditions (usually referred to within the industry as pea, which stands for "pre-existing ailment"). funds are entitled to impose a waiting period of up to 12 months on benefits for any medical condition the signs and symptoms of which existed during the six months ending on the day the person first took out insurance. they are also entitled to impose a 12-month waiting period for benefits for treatment relating to an obstetric condition, and a 2-month waiting period for all other benefits when a person first takes out private insurance. funds have the discretion to reduce or remove such waiting periods in individual cases. they are also free not to impose them, to begin with, but this would place such a fund at risk of "adverse selection", attracting a disproportionate number of members from other funds, or from the pool of intending members who might otherwise have joined other funds. it would also attract people with existing medical conditions, who might not otherwise have taken out insurance at all because of the denial of benefits for 12 months due to the pea rule. the benefits paid out for these conditions would create pressure on premiums for all the fund's members, causing some to drop their membership, which would lead