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| Most American receives their health coverage through the private insurance market, usually through their jobs. Many people buy insurance on their own in the individual market. Since coverage from private companies is the largest surge of insurance for Americans it is likely to be a central part of federal and state health reform efforts. Private health coverage is a mechanism for people to protect themselves from the potentially extreme financial costs of medical care if they become severely ill, and ensure that they have access to health care when they need it. Private health coverage products pool the risk of high health care costs across a large number of people, permitting them (or employers on their behalf) to pay a premium based on the average cost of medical care for the group of people. This risk-spreading function helps make the cost of health care reasonably affordable for most people.
| Medicare and Medicaid were previously known as Health Care Financing Administration (HCFA). In 1965, the Social Security Act establishing both Medicare and Medicaid. The Social Security Administration (SSA) became responsible for the administration of Medicare and Social and Rehabilitation Service become responsible for the administration of Medicaid.
| Health Maintenance Organizations (HMO) are one of three types of major health care insurance systems. The other two systems are Preferred Provider Organization and Point-of-Services Plans. HMOs were made popular in the 1970s. They have come to be used by many employers and health care providers. President Nixon signed off on the HMO Act in 1973. After the Act was signed into law, the health care insurance organization plans faced opposition from professional...
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