Health, Disability and Long Term Care Insurance - Essay Example

This crisis is a fact and statistics are good enough to prove its validity. USA spends twice more on its annual healthcare then does 19 of the developed countries in North America and Europe. The percentage of GDP allotted to health seems to be at a rise since 1997 when it reached to 15.7% in the year 2005, and as projected by the agencies of Medicare and Mediaid this percentage would further increase in the next 10 years to a figure of almost 17.5% of the GDP. Yet 15.6% of the American population is still uninsured.

(services, april,2005) For a country that has the highest expenditure rates on healthcare, it is quite shocking that the public gets to face the crisis of high rising prices for healthcare. The two major problems faced by the healthcare system of USA include rapid increase in the expenditures made on health and disabilities and high costs for administration of health care issues which account for at least 26% of the total money in healthcare. The reasons for the rising costs are many including the dependence on the high costs of new medical technologies, drugs and tests, the rising population of the elderly, the rising frequencies of road traffic accidence and criminal activities requiring medical attention, intensive work hours and rising pays of health care professionals and doctors, high awareness of medical problems requiring immediate and most of the times unnecessary medical attention, untoward issues like fraud and issues causing waste of administrative money, the internal situation and inflation rates of the health care system and many more reasons.

TYPES OF MEDICAL COVERAGE Broadly speaking, health insurance can be of two types. First is the group health insurance in which an employee and his immediate family are covered by an insurance company that is either partially or mostly paid by the employer. This type of insurance comprises as high as 90% of the total insurance issued by the insurance companies. (DeNavas-Walt, 2008) Sometimes this type of insurance may not provide the necessary protection that an individual requires; in that case an additional aid with the help of individual insurance can be purchased.

Second type is the individual insurance plan. This type of plan, as the name suggests, is individually tailored to anyone’s needs. This type of insurance is usually acquired when the group insurance is not enough or requires certain addition. In that case one can choose their own preference of insurance company and select as much coverage as they require. This means an extensive browsing of the options available in the market as the mark ups and premiums on different plans by different companies vary to a great extent.

The group and individual insurance plans provide different types of coverage. These policies further include the following types of coverage: 1) MAJOR MEDICAL EXPENSE INSURANCE Major medical expense insurance is a type of insurance which covers the excess medical expenses incurred due to sudden accidents, injuries or severe illnesses. It is usually in relation to the basic individual or group insurance that would provide the baseline insurance for the regular medical expenses. This type of insurance only covers the excess and high bills that are often faced after an accidental situation or a severe illness.

Usually the amount that can be paid through this type of insurance is quite high which requires the premium to be covered by the individual through various ways.