H ealth insurance has two basic purposes. It provides for reimbursement to families or individuals for health care costs. It may also guarantee replacement income when a person is unable to work because of sickness or injury. Reimbursement insurance can cover virtually all types of expenses connected with hospital care, medical treatment, and related services. Disability insurance usually calls for periodic payments to make up for lost income.
From another perspective, health insurance offers protection to both groups and individuals. The groups may be company workforces that have group insurance as a benefit. Individuals can buy insurance from as many as 1,800 commercial insurance companies offering a huge variety of plans.
Some insurers are general insurance companies. Others are hospital and medical service plans such as Blue Cross and Blue Shield, group medical prepayment plans such as health maintenance organizations (HMOs), and others.