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  • Writer's pictureDr. Tyler Buckley

What is the Difference Between Healthcare and Insurance?

Healthcare refers to efforts made by licensed and trained health professionals to maintain or restore mental, physical, and emotional well-being.


Health insurance is a system of financing that helps absorb or offset healthcare costs associated with routine health examinations, unforeseen illnesses or injuries, inpatient and outpatient surgery, specialist referral visits, and prescription medications.


A type of insurance that pays for certain medical and surgical expenses. It is a contract between the insurance company and an individual or family in which the insurance company agrees to pay the insured person's healthcare costs in return for a monthly premium payment.


The contract can be renewable (annually or monthly) or lifelong in the case of private insurance, and it can be mandatory for all citizens in the case of public insurance. The terms of the contract, as well as the type and amount of coverage, are specified in writing in a member contract or an "Evidence of Coverage" booklet for private insurance or in a national health policy for public insurance.


The most common types of healthcare plans are health maintenance organizations (HMOs), preferred provider organizations (PPOs), and prepaid medical service arrangements. All these involve the insurer paying a set percentage of medical expenses incurred by a patient who receives care from an in-network provider.


Healthcare is the field concerned with maintaining or restoring health. It includes all efforts to do so by licensed professionals, including doctors, nurses, dentists, therapists, and other medical experts.


Insurance is a form of payment that helps cover health care costs. Typically, insurance involves a monthly premium for a certain percentage of the insured's health costs.


There are many types of health insurance. Understanding how they are structured and how their provider network is run can help you determine which one may be best for you. Once you know the basics, it will be easier to evaluate your options when open enrollment periods come around.


The healthcare industry is complex, including doctors, nurses, therapists, hospitals, and pharmaceutical companies. When these providers set prices for their products and services, they directly affect health insurance costs.


The biggest driver of medical insurance costs is the annual deductible, which is the amount you must pay out of pocket each year before your insurer starts paying its share of the cost. Once you've met this deductible, the rest of your expenses are covered by your plan.


In addition to the deductible, you may have to pay copays and co-insurance. These cost-sharing fees are capped at federal levels and vary from plan to plan. A good rule of thumb is that programs with higher monthly premiums have lower out-of-pocket expenses.


Taxes are a form of government revenue that can be used to fund public goods and services. These include essential services, like national defense and streetlights, that benefit all citizens and programs and services that help only a limited group of people, such as welfare and education.


Taxation transfers income from households and businesses to the government. This has economic effects that can increase or decrease economic growth and economic welfare.


Using World Bank data, we compared three categories of taxation – taxes on income, profits, and capital gains; taxes on consumption; and other forms of taxation. We found that, overall, taxes on consumption were more regressive than taxes on income and profits. Consumption taxation was associated with significantly higher post-neonatal mortality, infant mortality, and under-5 mortality.


The healthcare and insurance options available to individuals and families depend on many factors. You can have employer-sponsored insurance through your job (also called group coverage), which is usually comprehensive and often affordable. You may also qualify for government-sponsored insurance through Medicaid and Medicare for people with low incomes and disabilities, respectively.


The best health insurance plan for you will be the one that fits your specific medical needs and financial situation. It should also cover the doctor and hospital providers you want to see, including local doctors. And look for plans offering a network of in-network providers, which will lower your costs. Those will include Preferred Provider Organizations (PPOs) and Health Maintenance Organizations (HMOs). And choose plans with lower premiums.

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