What is Health Insurance?
Health insurance is difficult to define precisely. Different segments of the population have different ways of defining the term “health insurance.” As a result, it can be difficult to give a clear definition of what exactly constitutes “health insurance.”
How might we solve this problem?
To make it easier on ourselves, let’s look at how two segments of the population define what “health insurance” is. Economists and the general public have very different ways of defining what “health insurance” is. These definitions are interesting to study because even though they may sound different, they form a reasonably accurate description of what is “health insurance” when they are put together. To see this, let us see how our groups would define “health insurance.”
Let us first look at an economist’s definition of what is “health insurance.”
Economists define insurance to be, “A contract between two or more parties that is used to protect against future risks and liabilities.” Therefore, most economists would probably define “health insurance” to be, “A contract between two or more parties that is used to protect against future health risks.” This definition vaguely explains what health insurance is because it doesn’t tell us who the “parties” are or what the “risks and liabilities” are. Let us make it more specific by using the general public’s definition of what is “health insurance.”
The general public’s definition of health insurance:
The general public usually defines “health insurance” in three ways. First, they consider it to be something that they must purchase from an insurance company. Second, they consider health insurance as being something that allows them to save money on their health care costs. Finally, they consider it to be something that protects people against the rising costs of health care.
Therefore, we can define “health insurance” to be…
“A contract between two parties (usually an insurance company and a consumer) that enables a consumer to save money on their health care costs while protecting themselves against future increases in health care costs. “
This definition is reasonably accurate and is good enough for most educated laymen.
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- What Is The Definition Of Health Insurance?
- How Does The Federal Government Help People Afford Health Insurance?
- How Many Health Insurance Companies Nationwide?
- How Has Public Program Cutbacks Contribute To The Lack Of Health Insurance?
- How to Buy Health Insurance?
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