Health Insurance – A Brief Idea

Like any other form of insurance, Health Insurance refers to a form of sovietism (collectivism) through which a person collectively pools his/her risk, of acquiring large medical expenses. Usually a public enterprise owns the collective or else there is a non-profit scheme to organize it. Although some countries may have health insurance pools managed by a profit company. The policy can be provided by a social insurance scheme sponsored by the government, or by private companies that provide insurance. The insurance can be obtained or purchased by an individual or at a group scheme (for example, by a company to cover the employees). In both the cases, the individuals or covered groups have to pay taxes or premiums against getting help to protect themselves in case they encounter unexpected expenses for healthcare.

In an health insurance plan, an estimation of the total risk of the health care expenses is done and afterwards, a prescribed structure for finance, such as monthly premiums or taxes, can be calculated, which ensures that some money is always available for paying the benefits of healthcare which are mentioned in the agreement of the insurance. A central body such as government organization or private establishment or maybe a non-profit entity administers the benefits of the insurance.

Going to the history, the health insurance concept was initially proposed by Hugh the Elder Chamberlen in 1694. Late in the 19th century then, accident insurance was getting available. It operated like the now-a-days disability insurance. Till the beginning of the 20th century, this payment scheme continued in some places, where all the laws relating to health insurance referred actually as disability insurance.

Massachusetts' Franklin Health Assurance Company in the US was the first to offer accident insurance. The firm offered health insurance against disabilities/injuries caused by accidents of steamboat and railroad. About 60 organizations started offering insurance (accident) in the US soon, but soon thereafter, the insurance industry rapidly consolidated.

Before the medical insurance was developed, it was expected from a patient that all other healthcare spending were paid out of his own pocket. In the 20th century, the traditional or old disability insurance gradually developed into the modern health programs. Now, the health insurance schemes cover costs of routine and preventive, and the emergency health care operations, and most prescribed drugs. Always this might not be the case.

Medical and hospital expense plans were being introduced in the early 20th century. Individual hospitals started to offer services to the individuals on pre paid basis, which eventually helped in the development of BlueCross organizations.


Get instant insurance rates from multiple carriers online. Free comparison for cheap auto, low cost health insurance, affordable home insurance quotes. We are dedicated to helping consumers find the most affordable and competitive home insurance on the web.