How Private HealtH
Coverage works:
a Primer
2008 UPdate
aPril 2008
How Private HealtH
Coverage works: a Primer
2008 UPdate
aPril 2008
TABLE OF CONTENTS
1.
What is Private Health Coverage? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Private health coverage includes employer-sponsored coverage and coverage bought
directly by individuals (158 million and 14 million, respectively, of the nonelderly
with private coverage in 2006).
2.
How is Private Health Coverage Delivered? . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Types of Organizations That Provide Private Health Coverage . . . . . . . . . . 2
Private health coverage is delivered through several types of state-licensed health
insuring organizations (including commercial health Insurers, Blue Cross and Blue
Shield plans, and health maintenance organizations (HMOs)) and through self-funded
employee health benefit plans.
Types of Private Health Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Types of private health plans include health maintenance organizations (21%),
preferred provider organizations (57%), and health savings accounts/health
reimbursement accounts (5%), among others.
Risk Pooling, Underwriting, and Health Coverage . . . . . . . . . . . . . . . . . . . . . 5
How private insurance pools and underwrites risks is discussed.
3.
Regulation of Private Health Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
State Regulation of Health Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Regulation of insurance has traditionally been a state responsibility. Various state
laws affecting private health insurance are discussed, including financial standards,
access to coverage, premiums, renewability, etc.
Federal Laws Governing Health Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 13
A number of federal laws contain requirements for health plans, most significantly
the Employee Ret