The Pros and Cons of Private Health Insurance

All Health News — Before getting down to the pros and cons of having a private health insurance, it is important to first explain what private healthcare insurance is really about. Isn’t that right?
Private Health Insurance Coverage

Private Health Insurance

What Is Private Health Insurance?

Private health insurance is a type of health plan coverage provided through an employer or a union; purchased directly by an individual from an insurance company or through an exchange.

Private health insurance plans for individuals and groups, is usually purchased through a broker, a private exchange, or directly through a health insurance company. Private health insurance is said to be the main source of health coverage for the majority of people in the United States.

What are the Pros and Cons of Private Health Insurance? 

If you are curious as to how private health insurance plans compare to what’s available on the public health insurance market; here are some advantages and disadvantages of private health insurance, to give you an idea.

Pros of Private Health Insurance

  • Health Plan options: Depending on your region, you may find more private health insurance plan options and carriers as compared to your state’s Public Health Insurance. This applies to both individuals who are looking for their own private health insurance plan and small business owners looking for a small group health plan.
  • Choose Your Own Doctor: In the private healthcare system you often have more flexibility in choosing your own doctor as well as preferred medical facility. For patients that want the same doctor all the time, this can be a very important advantage of this type of health care system.
  • Health Plan Cost: Some private health insurance plans for both individual and group plans are similar in pricing to those on the public health insurance exchange and can even be lower depending on the type of coverage chosen. This is especially true in regions where there is more competition and plan selection outside of the public Marketplace.
  • Shorter Wait Times: Unlike in public health insurance where there are often long wait times when having a surgery that is necessary but not life threatening. In a private health insurance system, the patient will often have shorter wait time at their preferred medical facility.
  • Similar to public health plans: Private health insurance is almost identical to the same plan individuals purchase through the public health insurance exchange. The only difference between the two is that those who choose a private individual health plan or a group health plan, do not have access to the Affordable Care Act’s tax credits.
  • Alternative to SHOP plans: In some instances, small business owners do not qualify for tax credits when purchasing a plan on the Small business Health Options Program (SHOP) exchanges. In this case, many small business owners turn to private exchanges in search of a small group health plan for greater selection.

Private Health Insurance Plans are also required to be compliant with the Affordable Care Act (ACA).

Private Health Insurance Plan

Private Health Insurance Plan

Cons of Private Health Insurance

Private health insurance does have its cons also, just like every other type of healthcare insurance. Some of the cons of private health insurance include:

  • Private Health Insurance Is Expensive: Without a doubt, private health insurance costs more than public health insurance. In the U.S, people are paying a lot more to get a decent private health coverage than they would be required to pay in a public healthcare system. Most Americans are paying over $200 a month for their health insurance premium plus a co-pay and deductible. Meanwhile, public healthcare costs under $100 monthly with no co-pay or deductible.
  • No access to Affordable Care Act tax credits (ACA): Although private health insurance plans are similar to those on the public marketplace and exchange, one of the biggest differences is that individuals are unable to utilize premium tax credits. Under the ACA, premium tax credits are only available toward health plans purchased on the public Health Insurance Marketplaces.
  • Private Health Insurance Creates Inequality:  When health care insurance is privatized, the healthcare providers and insurance companies are always thinking about their bottom line. This means if you are willing to pay, you can get priority treatment. In the public system everyone is treated equal, money or no money; order of treatment is based on severity of medical condition and on a first come first serve basis.

If you are considering a private health insurance plan, these article on the pros and cons of purchasing health insurance on the private market–is provided to help you make better informed decisions.

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