Health Insurance Options

Encyclopedia of Small BusinessA-I (2009)

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Health Insurance Options

Health insurance is a contractual agreement between an individual or group and an insurance provider through which the insurance provider agrees to pay for some or all of the health care costs incurred by the person or group in exchange for their regular payment of a sum known as a premium. In this way, the insurance company assumes the financial risk of reimbursing health care costs, but it is able to offset that risk by collecting premiums from a large number of people, many of whom will have very low medical expenses. Traditionally, health insurance has been provided as an employee benefit by large companies, so many people have come to think of health insurance as part of an employment compensation package. Self-employed people and small business owners, lacking such coverage, must wade through the many available options to find plans that meet their own health insurance needs.

The seemingly ever-rising cost of health care has become a serious problem for the nation as a ...

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