Medical Life Insurance is a form of Insurance in which the medical expenses of the insured person is paid by the Insurance Company if the insured person falls sick because of causes covered by the policy or because of accidents. The Insurance Company can either be a governmental agency or a private company.
In the United States, Market-Based Health Care System mainly depends on Private Medical Life Insurance or Private Health Insurance.
In 1694, Hugh the Elder Chamberlen conceptualized the idea of Medical Life Insurance. He belonged to the Peter Chamberlen Family. In the latter part of the 19 th Century, Medical Life Insurance was known as Disability Insurance because the coverage was only available for expenses of emergency care of accidental injuries leading to disability. This pattern of payment went on till the beginning of the 20 th Century in some areas such as California. There all Medical Life Insurance rules and regulations pertained to Disability Insurance. The patients had to pay their health care expenses on their own. This is known as Fee-For-Service Business Model. Today, the scenario has changed. Conventional Disability Insurance has transformed into Modern Medical Life Insurance Plans.
A Medical Life Insurance Policy is a contract or agreement between a person and the Insurance Company, which can be renewed annually. Along with Medical Life Insurance claims, the policyholder has to make a payment which is called the deductible plus copayment.
A large number of Employer Benefit Plans in the U.S. offer Prescription Drug Plans, which is a form of Medical Life Insurance. Here the copayment is done by the patient and the rest is paid by Prescription Drug Plan.
A private Medical Life Insurance scheme faces two innate difficulties:
- Adverse Selection
- Ex-post Moral Hazard
Factors which affect Medical Life Insurance Price
The factors which result in Medical Life Insurance Price rises include:
- Inadequate Exercise
- Unhygienic choices of food
- Dearth of doctors in rural or poverty-stricken areas
- Alcohol abuse
- Obesity
- Sedentary Lifestyle
- Smoking
- Drug abuse
In the United Kingdom, the National Health Service (NHS) is the flagship company of four Government-backed Health Care Organizations.
Medical Life Insurance in the United States:
As per the current statistical information provided by the United States Census Bureau, almost 85% of the American Population have Medical Life Insurance.
- Medicare: Medicare Programs are funded by the Government in the United States. They offer services of Insurance to the aged and end-stage kidney disease patients.
- Medicare Advantage: In case of Medicare Advantage, the health care choices of Medicare Beneficiaries are widened.
- Medicaid: In 1972, Medicaid was established for providing Health Insurance facilities to very poor people.
