- Throughout much of history, people typically had to pay for their own healthcare. When they needed medicine or treatment, they had to pay for it out of their own pockets. As such, private healthcare is about as old as healthcare itself. However, in 1850, basic health insurance was first offered in the United States by the Franklin Health Assurance Company of Massachusetts. There was a huge need for health insurance to help those who worked in the railroad and steamboat industry because they had high-risk jobs with little money to pay for their own healthcare. Modern private healthcare insurance was established in 1985 when insurance companies realized some people wanted to control their own healthcare options.
- Private healthcare insurance can come in employer-provided group coverage or individually purchased family coverage. Within these two basic private insurance policies you can get purchase fee-for-service plans, managed care plans, HMOs (Health Maintenance Organizations), PPOs (Preferred Provider Organizations), and self-funded or self-insured plans. Self-funded plans are the most common type of private healthcare because it offers more control by the person paying for the coverage.
- Fee-for-service plans allow you to choose any medical provider you want. Once you've been treated, you pay your fee for the services. This also allows you the freedom to shop around and compare rates. Managed care plans provide you with insurance and healthcare services. Members pay a monthly fee that is fixed no matter what the amount of care is needed. This plan also covers a wide variety of preventative services as well. Among other managed care plans, HMOs and PPOs are the most common of them. HMOs require members to only use their physicians and facilities that are apart of the network. PPOs generally want you to use who is in their network but will still cover you if you use a doctor outside of the network. Self-funded plans are provided by employers where the employer provides you with insurance instead of buying insurance from a company.
- One of the main benefits of having your own private health insurance is that you get to pick your own doctor and hospital. Another plus is that you don't need to wait a long time for elective surgery like many others do. There are also many other things covered with private healthcare insurance that may not be covered by government or other forms of insurance. This is usually referred to as "the gap," such as ambulance, dental coverage, chiropractic treatment and home nursing.
- Private healthcare policies have some disadvantages and pitfalls. Private healthcare is less comprehensive than other types. This means that your employer or group plans generally have more coverage then an individual one. It has strict underwriting standards and if you have a pre-existing condition you may not get covered. Finally, your rates may increase more often and rise with age. As a result, it can get fairly expensive over the years.