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Private vs Public Health Insurance: What Are the Key Differences?

68% of Americans get medical assistance through private health care, but 63% also vote that the American government should provide public health care. 

The benefit of private vs public health insurance is a hot topic among politicians and citizens, with one side claiming how “wrong” the other is. But what is the difference between them? Is one better?

Keep reading as we breakdown private vs public health insurance and the key differences between them. 

Private Health Insurance 

Private health insurance is when people get health insurance through private companies. This type of insurance goes to employees through their companies, but individuals can buy it as well.

There are a lot of pros to private healthcare. For example, there are more options of providers, a wider choice of doctors, and more flexible plans. 

However, it is expensive, and companies will even cut wages to cover the cost of insurance. This leaves a lot of people without medical assistance and unable to get medicine because of the exorbitant costs.  

Different Types of Private Health Insurance 

The different types of private health insurance include fee-for-service, HMOs, and PPO’s. 

Fee-for-service is the traditional private health insurance. You pay monthly premiums to your provider that cover most health costs, but with certain services, you’ll pay a bit out of pocket. 

Health Maintenance Organizations, or HMOs, are prepaid health plans. You also pay a monthly premium, but the difference is you must receive health care from their facilities. 

Preferred Provider Organizations, or PPO, is when you pay monthly premiums and small co-payments. The co-payments are paid when visiting the doctors. This does limit the doctors and facilities you can use. 

Public Health Insurance 

Public health insurance is when the government provides insurance plans. This helps low-income individuals or families, the elderly, and people who qualify for special subsidies get the medical attention they need. 

Unlike private, public healthcare is funded through the government and taxes. The Affordable Care Act is in place to help manage and cover those in need of government assistance, but it is a big part of government spending.

Public Healthcare Providers

There are three ways the government provides healthcare. This is through Medicare, Medicaid, and CHIP.

Medicare is a federal insurance program for seniors, so those 65 and over, and those with certain disabilities. Medicare Health Insurance Experts work to figure who’s in need and what they need. 

Medicaid is a social insurance program that’s funded by the federal and state government but gets administered at the state level. Medicaid covers millions of very low-income families.

Children’s Health Insurance Program, or CHIP, serves children and families who don’t qualify for assistance but can’t afford private health insurance. It aims to fill in the gaps in healthcare. 

Private vs Public Health Insurance – Which is Better?

Private vs public health insurance isn’t a conversation about what’s the best type of insurance, it’s a conversation about how can we make them work together.

The key differences between private and public health insurance are that private healthcare is expensive and only available to those who can afford it. Public healthcare is free and only given to those who need it. 

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