The Importance of Health Insurance

Senior (College 4th year) ・Healthcare&Medicine ・APA ・1 Sources

Recent times have seen skyrocketing healthcare spending rates. The increase in patient health care spending now accounts for about 35% of provider revenue which compared to the year 2000, was only 5% (Milkovich, Newman, Gerhart, 2011). Sadly, this drift is expected to persist, with people having to contend with ever increasing financial burdens which are inspired by the high costs of treatment and the limitedness of the covers that that are offered by insurance organizations.

The causes of the shift are complicated and different. Some of these include the fact that health providers’ costs for operating and regulation have increased, practitioners’ aspiration to provide proper health care while administrating their own expenses, the high-deductible health plans and insurance companies that offer opaque prices and payment plans. Milkovich, Newman and Gerhart (2011) infer that as a result, many individuals struggle to pay for the care that is required while a lot of health providers suffer money-wise since they face challenges of collecting fees from financially struggling patients.

Healthcare coverage facilitates the individual’s access to medical care by ensuring that the cost impositions are ironed out.  However, patients normally choose to avoid or delay getting medical attention because they are concerned with their capability to finance the service. Employees that are provided with healthcare insurance by their companies face an added cost after getting medical attention. As stated by Milkovich, Newman and Gerhart (2011), approximately 80% of employees covered with insurance get deducted annually before getting reimbursements for their health plan.

Insurance options

There are a number of options offered in insurance covers; the first one is reimbursement insurance, patients get to pay their premiums directly to their insurer, it is not necessary for the insurer to have a contract with health providers. Second, conventional insurance is where the consumer has a health plan where he or she pays premium hence has a contract directly with the health providers. The difference in incentives between the two systems is that, reimbursement insurance incentives the customer encourages to look for low costs while getting quality services while conventional insurance reduces incentive of the patient but provides a health plan that bargains over cost and quality (Milkovich, Newman & Gerhart, 2011). Thirdly, the sponsored insurance is where money is collected directly or indirectly by a sponsor that gets into agreement with health planners who in turn contact and reimburse providers.

Importance of insurance cover

Having a job that is related to the healthcare segment is important in such times of economic insecurity. The initiative encourages saving tendencies.  Additionally, workers are encouraged to take up ventures regarding healthcare. Employees’ benefits are crucial since they allow maximum saving. Nonetheless, it does not mean workers should forego taking care of their health. According to (Milkovich, Newman & Gerhart, 2011), there are things individuals do for economic reasons which end up hurting their health in the long-run.

Milkovich, Newman & Gerhart (2011) contend that health insurance increases job satisfaction, it shows employees that their company cares about their well-being, although the company might be doing it for economic purposes, a worker gets the sense that they are being care for and thus they do their work more diligently since they are happy. Insurance covers also boosts employees’ morale, it encourages positivity as they are more interested in work-related activities. Additionally, when a work is torn between choosing job offers, benefits like health insurance make it easier to pick one with better offers.


In conclusion, it is essential to make sure that our health is at its best. The achievement of the goal is subject to the augmentation of the healthcare practices that are engaged in the healthcare settings. Individuals should get effective insurance cover that are affordable and suit their needs. The initiative will facilitate easy access to healthcare services by the patients. It will further inspire timely and efficient interventions. 


Milkovich, G.T., Newman, J.M., & Gerhart, B. (2011). Compensation (10th ed.). New York, NY: McGraw Hill/Irwin.

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