In the United States, health insurance helps pay for medical expenses through privately purchased insurance, social insurance, or a social welfare program funded by the government.See, for example, US Census Bureau,"CPS Health Insurance Definitions" Synonyms for this usage include health coverage, health care coverage, and health benefits. In a more technical sense, the term "health insurance" is used to describe any form of insurance providing protection against the costs of medical services. This usage includes both private insurance programs and social insurance programs such as Medicare, which pools resources and spreads the financial risk associated with major medical expenses across the entire population to protect everyone, as well as social welfare programs like Medicaid and the Children's Health Insurance Program, which both provide assistance to people who cannot afford health coverage.
In addition to medical expense insurance, "health insurance" may also refer to insurance covering disability or long-term nursing or custodial care needs. Different health insurance provides different levels of financial protection and the scope of coverage can vary widely, with more than 40% of insured individuals reporting that their plans do not adequately meet their needs as of 2007.Consumer Reports, September 2007
Major federal regulatory reforms, such as the enactment of Medicare and Medicaid in 1965 and the Affordable Care Act in 2010, have substantially reduced the number of uninsured Americans. In American politics, the Democratic Party tends to support public expansions in health insurance coverage while the Republican Party opposes it, with Republicans opposing Medicaid Expansion and supporting Affordable Care Act repeal. In 2023, it has been reported that approximately 25.3 million non-elderly Americans lacked health insurance, a decrease compared to 2019.
The United States spends vastly more on health care than comparable countries, which has been attributed in large part to inefficiencies and anti-competitive practices in its health insurance system. Commercial insurance in the US charges prices that are approximately 2.5 times the prices paid by those with public insurance.
Enrollment and the uninsured
Gallup issued a report in July 2014 stating that the uninsured rate for adults 18 and over declined from 18% in 2013 to 13.4% by 2014, largely because there were new coverage options and market reforms under the Affordable Care Act. Rand Corporation had similar findings.
Trends in private coverage The proportion of non-elderly individuals with employer-sponsored cover fell from 66% in 2000 to 56% in 2010, then stabilized following the passage of the Affordable Care Act. Employees who worked part-time (less than 30 hours a week) were less likely to be offered coverage by their employer than were employees who worked full-time (21% vs. 72%).
A major trend in employer sponsored coverage has been increasing premiums, deductibles, and co-payments for medical services, and increasing the costs of using out-of-network health providers rather than in-network providers.
Trends in public coverage Public insurance cover increased from 2000 to 2010 in part because of an aging population and an economic downturn in the latter part of the decade. Funding for Medicaid and CHIP expanded significantly under the 2010 health reform bill. The proportion of individuals covered by Medicaid increased from 10.5% in 2000 to 14.5% in 2010 and 20% in 2015. The proportion covered by Medicare increased from 13.5% in 2000 to 15.9% in 2010, then decreased to 14% in 2015."Income, Poverty, and Health Insurance Coverage in the United States: 2010." U.S. Census Bureau. Issued September 2011.
According to the Center for Medicare & Medicaid Services(CMS), as of January 15, 2025, 24.2 million users selected a plan for public coverage or were automatically re-enrolled in public health coverage.
Status of the uninsured The uninsured proportion was stable at 14–15% from 1990 to 2008, then rose to a peak of 18% in Q3 2013 and rapidly fell to 11% in 2015. The percent of the population without insurance remained close to 9% through 2025.
A 2011 study found that there were 2.1 million hospital stays for uninsured patients, accounting for 4.4% ($17.1 billion) of total aggregate inpatient hospital costs in the United States.Torio CM, Andrews RM. National Inpatient Hospital Costs: The Most Expensive Conditions by Payer, 2011. HCUP Statistical Brief #160. Agency for Healthcare Research and Quality, Rockville, MD. August 2013. The costs of treating the uninsured must often be absorbed by providers as charity care, passed on to the insured via cost-shifting and higher health insurance premiums, or paid by taxpayers through higher taxes.
The social safety net The social safety net refers to those providers that organize and deliver a significant level of health care and other needed services to the uninsured, Medicaid, and other vulnerable patients. This is important given that the uninsured rate for Americans is still high after the advent of the Affordable Care Act, with a rate of 10.9%, or 28.9 million people in 2019. Not only is this because the ACA does not address gaps for undocumented or homeless populations, but higher insurance premiums, political factors, failure to expand Medicaid in some states, and ineligibility for financial assistance for coverage are just some of the reasons that the social safety net is required for the uninsured. Most people who are uninsured are non-elderly adults in working families, low income families, and minorities. Social safety net hospitals primarily provide services to these populations of uninsured. For example, California's Public Health Care Systems are only 6% of the hospitals in the state, yet provide care for 38% of all hospital care of uninsured in California- 123,000 of which are homeless, and 3.6 million of which live below the federal poverty line.
One way in which the US has been addressing this need for a social safety net (other than formally/state recognized safety net hospitals) is through the advent of free clinics, an example of a Federally Qualified Health Center. A free clinic (for example, the Haight Ashbury Free Clinic and the Berkeley Free Clinic) is a clinic that provides services for free and target the uninsured, typically relying on volunteers and lay health workers.
Death Since people who lack health insurance are unable to obtain timely medical care, they have a 40% higher risk of death in any given year than those with health insurance, according to a study published in the American Journal of Public Health. The study estimated that in 2005 in the United States, there were 45,000 deaths associated with lack of health insurance. A 2008 systematic review found consistent evidence that health insurance increased utilization of services and improved health. A study at Johns Hopkins Hospital found that heart transplant complications occurred most often amongst the uninsured, and that patients who had private health plans fared better than those covered by Medicaid or Medicare."Health Care System Flaws and Lack of Private Insurance Contribute To Higher Deaths Among Black Heart Transplant Patients." Johns Hopkins Hospital, May 31, 2010.
Reform The Affordable Care Act of 2010 was designed primarily to extend health coverage to those without it by expanding Medicaid, creating financial incentives for employers to offer coverage, and requiring those without employer or public coverage to purchase insurance in newly created health insurance exchanges. This requirement for almost all individuals to maintain health insurance is often referred to as the individual mandate. The Congressional Budget Office (CBO) has estimated that roughly 33 million who would have otherwise been uninsured will receive coverage because of the act by 2022.Congressional Budget Office, "CBO and JCT's Estimates of the Effects of the Affordable Care Act on the Number of People Obtaining Employment-Based Health Insurance." March 2012
Repeal of the Individual Mandate
The Tax Cuts and Jobs Act of 2017 effectively repealed the individual mandate, meaning that individuals will no longer be penalized for failing to maintain health coverage starting in 2019. The CBO projects that this change will result in four million more uninsured by 2019, 13 million more by 2027.
Underinsurance
Those who are insured may be underinsured such that they cannot afford full medical care, for example due to the exclusion of pre-existing conditions, or from high deductibles or co-payments. In 2019 Gallup found while only 11% reported being uninsured, 25% of U.S. adults said they or a family member had delayed treatment for a serious medical condition during the year because of cost, up from 12% in 2003 and 19% in 2015. For any condition, 33% reported delaying treatment, up from 24% in 2003 and 31% in 2015.
History
The first health coverage in the United States was established by Congress in 1798, when the Marine Hospital Fund was financed through a tax on maritime sailors' pay. 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 US by 1866, but the industry consolidated rapidly soon thereafter. While there were earlier experiments, sickness coverage in the US effectively dates from 1890. The first employer-sponsored group disability policy was issued in 1911, but this plan's primary purpose was replacing wages lost because the worker was unable to work, not medical expenses.
Before the development of medical expense insurance, patients were expected to pay all other health care costs out of their own pockets, under what is known as the fee-for-service business model. During the middle to late 20th century, traditional disability insurance evolved into modern health insurance programs. Today, most comprehensive private health insurance programs cover the cost of routine, preventive, and emergency health care procedures, and also most prescription drugs, but this was not always the case. The rise of private insurance was accompanied by the gradual expansion of public insurance programs for those who could not acquire coverage through the market.
Hospital and medical expense policies were introduced during the first half of the 20th century. During the 1920s, individual hospitals began offering services to individuals on a pre-paid basis, eventually leading to the development of Blue Cross organizations in the 1930s. The first employer-sponsored hospitalization plan was created by teachers in Dallas, Texas, in 1929. Because the plan only covered members' expenses at a single hospital (Baylor Hospital), it is also the forerunner of today's health maintenance organizations (HMOs).