Understanding Health Insurance

By: Lee Ann Obringer & Melissa Jeffries

National Health Insurance

Projected distribution of Medicare funding for the 2006 fiscal year.
Projected distribution of Medicare funding for the 2006 fiscal year.

The federal government also has health insurance programs for those who are eligible. Medicare is health insurance for people age 65 or older, those who are under age 65 with certain disabilities, and people of all ages with end-stage renal disease (those with permanent kidney failure requiring dialysis or a kidney transplant). Medicare includes hospital insurance (Part A), medical insurance (Part B) and prescription drug coverage (Part D).

Medicaid is a state-administered health insurance program available to certain low-income individuals and families who fit into a recognized eligibility group. You must meet very specific requirements and considerations that include age, pregnancy, disability, blindness, income, resources, and U.S. citizenship or a lawfully admitted immigrant. These rules can vary from state to state.


If a family earns too much to qualify for Medicaid, they may still qualify for State Children's Health Insurance (SCHIP). Another state-administered program, SCHIP covers uninsured children under the age of 19 whose families earn up to $36,200 a year (for a family of four). For little or no cost, SCHIP pays for doctor visits, immunizations, hospitalizations and emergency room visits.

For those who don't qualify for the above programs and are in relatively poor health, there's another option: high-risk health insurance pools. High-risk health insurance pools are state-mandated programs designed to provide health insurance coverage to those who are unable to purchase private health insurance due to a pre-existing condition. By gathering together those seen as uninsurable into a single group, the state can set up a plan similar to private insurers and offer health care, though at a higher cost, to those previously denied coverage. Plans offered by high-risk pools are comparable to most major medical plans, and have a wide range of premiums and deductibles. Benefits also vary but usually include prescription coverage, maternity care and disease management.