Private Health Insurance: US Healthcare System and ACA Impact

This essay provides an overview of private health insurance in the United States, highlighting its role in ensuring access to healthcare and protecting individuals from high medical costs. It discusses the structure of private health insurance plans, including group health insurance offered by employers and individual plans available through health insurance exchanges. The essay also examines the impact of the Affordable Care Act (ACA) on health insurance coverage, focusing on key reforms such as expanding health coverage, reforming health insurance practices, and improving the overall healthcare system. The ACA's provisions, including the expansion of Medicaid and the prohibition of denying coverage based on pre-existing conditions, are discussed in detail, along with the system reforms aimed at promoting coordinated and quality healthcare while reducing costs. The essay concludes by emphasizing the importance of private health insurance in the US healthcare landscape and its ongoing evolution through legislative and regulatory changes.

Running head: PRIVATE HEALTH INSURANCE
Private Health Insurance
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1PRIVATE HEALTH INSURANCE
Private health insurance enables people to protect themselves from exorbitant
financial costs of medical care and therefore ensure that the people have access to health care
facilities in times of need. Health insurance plans cause pooling of excess medical costs and
allows people to pay a premium cost of medical bills, therefore the medical costs become
reasonable and affordable for people. Health insurance schemes are provided by various
private and public insurance organisations. Heath insurance policies are formed between
policy holder (one who avails the insurance) and policy provider (one who provides health
insurance). Health insurance benefits are arranged by insurance plan sponsors (Barnett &
Vornovitsky, 2016). They directly make health care related payments on behalf of policy
holder. Sometimes a third party administrator is also involved; the insurance sponsor makes a
contractual agreement with the health insurer and pays the health care costs with no premium
requirement.
In United States, medical costs are exorbitant; only wealthy people can afford to pay
for their high medical costs. However, the condition becomes worse for poor people and also
for people with average income. Therefore, in United States efficient health care delivery and
accessibility depends largely on private healthcare insurance facilities as universal health care
coverage is not included, therefore people depend on health insurance schemes to cover their
medical expenses. United States health care facilities depend largely on private health
insurance plans. People under age of 65 years mostly have private health coverage. Public
health insurance in United States includes a payment of premium cost by public health
insurance organisations. Majority of US individuals are under private insurance plans (Smith
& Medalia, 2014). The employers make a contractual agreement with private health
insurance companies to provide a universal health insurance coverage to all the employees,
this is termed as group health insurance plan. These plans are based on customizable
schemes; employees can select between plans according to their choices. The insurance

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companies receives a profitable proportion from both employees and employers. An
increasing population in US is selecting group health insurance plans over individual
insurance schemes.
Health insurance exchanges are marketplace services which allow consumers or
individuals to compare health insurance plans and therefore purchase health insurance plans.
These services are available in every state to promote affordable health care facilities among
public population. These health insurance exchanges bring about health insurance reforms in
various ways. Insurance exchange causes a competition among consumer availability, thereby
increasing affordability and acessibility. It allows for effective management of insurance risks
and reduces cases of adverse selections (Jacobs & Skocpol, 2015). Health exchanges also
help in reducing administrative costs through simplified marketing strategies. It ensures
medical transparency and allows for consumer choice of insurance plans. The health
insurance exchange has a regulatory effect; it functions to increase the accountability of the
health insurers. This provides a guarantee that the health insurers play a fair role in
considering consumers’ claims and complaints, therefore the insurers sell the insurance plans
at a reasonable market cost.
The Affordable Care Act (ACA) or Obama care is a law based on health care
provision which was passed during the administration of former US president Barack Obama.
The ACA provides a guarantee that Americans can efficiently buy or receive health insurance
in order to access health care facilities to promote good health. The ACA aims to regulate
health insurance coverage through health insurance reforms, thereby improving health care
facilities among public. The key elements of ACA insurance reforms are expanding in
Expanding health coverage, Reform of health insurance and System reform and Public health
improvement. Expansion of health cove rage is central to ACA in that the States can expand
medical health cove rage for those under federal poverty line. The changes in health

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insurance reforms include that the health insurers can in no way contradict or deny any health
coverage based on previously existing situations. The insurers can no longer set an annual
limit on essential health benefits. According to recent reforms, the insurers have to pay a
greater proportion of premium costs on medical care services. More number of people have
been included under health insurance. The insurance reform aims to provide minimum health
benefits within the insurance plan. Reforms resulted in coverage of preventive services by
insurers with no cost requirement from those who enrol for insurance plans (Obama, 2016).
System reforms include providing health care incentives to insurance providers to promote
coordination and collaboration in promoting quality health care. Alternative approaches need
to be based on health care cost reduction. The cost reduction can be promoted through
reduction in taxes in health insurance thereby allowing people to save medical expenses and
resulting in medical transparency.

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References
Barnett, J. C., & Vornovitsky, M. S. (2016). Health insurance coverage in the United States:
2015. Washington, DC: US Government Printing Office.
Jacobs, L., & Skocpol, T. (2015). Health care reform and American politics: What everyone
needs to know. Oxford University Press.
Obama, B. (2016). United States health care reform: progress to date and next
steps. Jama, 316(5), 525-532.
Smith, J. C., & Medalia, C. (2014). Health insurance coverage in the United States: 2013.
Washington, DC: US Department of Commerce, Economics and Statistics
Administration, Bureau of the Census.