How We Pay for Health Care

Tom, Warren, and Jin belong to Green HMO, but each of them has a different benefit package.

Tom’s employer pays Green HMO $300 a month to insure Tom. Tom pays $60 a month.

Warren has Green HMO’s Medicare Advantage Plan. The federal government pays Green HMO $1,500 a month to insure Warren. He pays the government about $77 a month and he pays Green HMO $170 a month.

Jin buys Green HMO coverage on her own. She pays $425 a month.

In the United States, most people who have health insurance get it through their job or a government program.

Topics on this page

• Who pays who
• Benefit packages

Who pays who

• The employer or the government negotiates costs and benefits with the insurance company and buys a specific benefit package.
• The insurance company pays the doctors and other providers.
• The patient usually pays a share of the costs.

Benefit packages

A benefit package is a set of benefits and costs. Most plans offer more than one benefit package. For example, in the story on the right, Jin does not have prescription drug coverage, but Tom does. Their fees are also different.