States regulate small group premium rates, typically by placing limits on the premium variation allowable between groups (rate bands). Insurers price to recover their costs over their entire book of small group business while abiding by state rating rules.[74] Over time, the effect of initial underwriting "wears off" as the cost of a group regresses towards the mean. Recent claim experience—whether better or worse than average—is a strong predictor of future costs in the near term. But the average health status of a particular small employer group tends to regress over time towards that of an average group.[75] The process used to price small group coverage changes when a state enacts small group reform laws.[76]
Lifetime Health Cover: If a person has not taken out private hospital cover by 1 July after their 31st birthday, then when (and if) they do so after this time, their premiums must include a loading of 2% per annum for each year they were without hospital cover. Thus, a person taking out private cover for the first time at age 40 will pay a 20 percent loading. The loading is removed after 10 years of continuous hospital cover. The loading applies only to premiums for hospital cover, not to ancillary (extras) cover.

Health insurance can be tricky to navigate. Managed care insurance plans require policyholders to receive care from a network of designated health care providers for the highest level of coverage. If patients seek care outside the network, they must pay a higher percentage of the cost. In some cases, the insurance company may even refuse payment outright for services obtained out of network. Many managed care plans require patients to choose a primary care physician who oversees the patient's care and makes recommendations about treatment. Insurance companies may also deny coverage for services that were obtained without preauthorization. In addition, insurers may refuse payment for name-brand drugs if a generic version or comparable medication is available at a lower cost.

The private health system in Australia operates on a "community rating" basis, whereby premiums do not vary solely because of a person's previous medical history, current state of health, or (generally speaking) their age (but see Lifetime Health Cover below). Balancing this are waiting periods, in particular for pre-existing conditions (usually referred to within the industry as PEA, which stands for "pre-existing ailment"). Funds are entitled to impose a waiting period of up to 12 months on benefits for any medical condition the signs and symptoms of which existed during the six months ending on the day the person first took out insurance. They are also entitled to impose a 12-month waiting period for benefits for treatment relating to an obstetric condition, and a 2-month waiting period for all other benefits when a person first takes out private insurance. Funds have the discretion to reduce or remove such waiting periods in individual cases. They are also free not to impose them to begin with, but this would place such a fund at risk of "adverse selection", attracting a disproportionate number of members from other funds, or from the pool of intending members who might otherwise have joined other funds. It would also attract people with existing medical conditions, who might not otherwise have taken out insurance at all because of the denial of benefits for 12 months due to the PEA Rule. The benefits paid out for these conditions would create pressure on premiums for all the fund's members, causing some to drop their membership, which would lead to further rises in premiums, and a vicious cycle of higher premiums-leaving members would ensue.

Private health insurance may be purchased on a group basis (e.g., by a firm to cover its employees) or purchased by individual consumers. Most Americans with private health insurance receive it through an employer-sponsored program. According to the United States Census Bureau, some 60% of Americans are covered through an employer, while about 9% purchase health insurance directly.[53] Private insurance was billed for 12.2 million inpatient hospital stays in 2011, incurring approximately 29% ($112.5 billion) of the total aggregate inpatient hospital costs in the United States.[12]
The National Association of Insurance Commissioners (NAIC), the National Governors' Association and "several insurance and consumer groups" opposed the AHP legislation.[80] The NAIC issued a Consumer Alert regarding AHPs, as proposed in Developing the Next Generation of Small Businesses Act of 2017. H.R. 1774.[80] Their statement said that AHP's "[t]hreaten the stability of the small group market" and provide "inadequate benefits and insufficient protection to consumers."[80] Under AHPs, "[f]ewer consumers would have their rights protected, "AHPs would also be exempt from state solvency requirements, putting consumers at serious risk of incurring medical claims that cannot be paid by their Association Health Plan."[79]

Accident insurance was first offered in the United States by the Franklin Health Assurance Company of Massachusetts. This firm, founded in 1850, offered insurance against injuries arising from railroad and steamboat accidents. Sixty organizations were offering accident insurance in the U.S. by 1866, but the industry consolidated rapidly soon thereafter. While there were earlier experiments, the origins of sickness coverage in the U.S. effectively date from 1890. The first employer-sponsored group disability policy was issued in 1911.[65]

The Blue Cross Blue Shield Association (BCBSA) is a federation of 38 separate health insurance organizations and companies in the United States. Combined, they directly or indirectly provide health insurance to over 100 million Americans.[92] BCBSA insurance companies are franchisees, independent of the association (and traditionally each other), offering insurance plans within defined regions under one or both of the association's brands. Blue Cross Blue Shield insurers offer some form of health insurance coverage in every U.S. state, and also act as administrators of Medicare in many states or regions of the United States, and provide coverage to state government employees as well as to federal government employees under a nationwide option of the Federal Employees Health Benefit Plan.[93]


The Australian government announced in May 2008 that it proposes to increase the thresholds, to $100,000 for singles and $150,000 for families. These changes require legislative approval. A bill to change the law has been introduced but was not passed by the Senate.[12] An amended version was passed on 16 October 2008. There have been criticisms that the changes will cause many people to drop their private health insurance, causing a further burden on the public hospital system, and a rise in premiums for those who stay with the private system. Other commentators believe the effect will be minimal.[13]

Australian health funds can be either 'for profit' including Bupa and nib; 'mutual' including Australian Unity; or 'non-profit' including GMHBA, HCF and the HBF Health Fund (HBF). Some, such as Police Health, have membership restricted to particular groups, but the majority have open membership. Membership to most health funds is now also available through comparison websites like moneytime, Compare the Market, iSelect Ltd., Choosi, ComparingExpert and YouCompare. These comparison sites operate on a commission-basis by agreement with their participating health funds. The Private Health Insurance Ombudsman also operates a free website which allows consumers to search for and compare private health insurers' products, which includes information on price and level of cover.[9]
FSA (Flexible Spending Account) - An FSA is often set up through an employer plan. It lets you set aside pre-tax money for common medical costs and dependent care. FSA funds must be used by the end of the term-year. It will be sent back to the employer if you don't use it. Check with your employer's Human Resources team. The can provide a list of FSA-qualified costs that you can purchase directly or be reimbursed for. A few common FSA-qualified costs include:
In the late 1990s federal legislation had been proposed to "create federally-recognized Association Health Plans which was then "referred to in some bills as 'Small Business Health Plans.'[79] The National Association of Insurance Commissioners (NAIC), which is the "standard-setting and regulatory of chief insurance regulators from all states, the District of Columbia and territories, cautioned against implementing AHPs citing "plan failures like we saw The Multiple Employer Welfare Arrangements (MEWAs) in the 1990s."[80] "[S]mall businesses in California such as dairy farmers, car dealers, and accountants created AHPs "to buy health insurance on the premise that a bigger pool of enrollees would get them a better deal."[81] A November 2017 article in the Los Angeles Times described how there were only 4 remaining AHPs in California. Many of the AHPs filed for bankruptcy, "sometimes in the wake of fraud." State legislators were forced to pass "sweeping changes in the 1990s" that almost made AHPs extinct.[81]
An individual with Cerebral Palsy will likely require specialized medical services throughout his or her lifetime. The expense for a chronic disability can greatly exceed the expense for standard care an individual without the condition incurs. Cerebral Palsy results in a chronic, physical impairment, which typically involves routine doctor visits, extended hospital stays, a range of therapies, planned surgeries, drug therapy, and adaptive equipment. Depending on the level of impairment, Cerebral Palsy usually requires a comprehensive, multidisciplinary health care team that may include any combination of the following: pediatrician, neurologist, radiologist, orthopedic surgeon, physical therapist, occupational therapist, and vocational therapist. Some individuals also require the assistance of a registered dietician, a speech pathologist, ophthalmologist, urologist, and a cosmetic dentist, amongst others.
The Commonwealth Fund, in its annual survey, "Mirror, Mirror on the Wall", compares the performance of the health care systems in Australia, New Zealand, the United Kingdom, Germany, Canada and the U.S. Its 2007 study found that, although the U.S. system is the most expensive, it consistently under-performs compared to the other countries.[6] One difference between the U.S. and the other countries in the study is that the U.S. is the only country without universal health insurance coverage.
Approximately 19 percent of Americans had coverage under Medicaid in 2016, and 14 percent had coverage under Medicare. These are government-run programs, as opposed to private coverage. However, the state and federal governments contract with private insurers to offer Medicaid managed care plans and Medicare Advantage plans, all of which are run by private insurers (in many cases, the same private insurers that offer employer-sponsored and individual market plans to the rest of the population).
The share of Americans without health insurance has been cut in half since 2013. Many of the reforms instituted by the Affordable Care Act of 2010 were designed to extend health care coverage to those without it; however, high cost growth continues unabated.[3] National health expenditures are projected to grow 4.7% per person per year from 2016 to 2025. Public healthcare spending was 29% of federal mandated spending in 1990 and 35% of it in 2000. It is also projected to be roughly half in 2025.[4]
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