Healthcare vs. Health Insurance: The Differences You Need to Know

The term “Healthcare” is widely used these days. As human resources professionals, you may have seen that healthcare is used interchangeably with health insurance, even though it is the layman who does it, rather than industry professionals. Healthcare and health insurance are completely different things. They have different definitions, although we, as a country, have mixed the two to a great extent.

This combination has led the county to mistakenly focus on health insurance as an equal target of anger over the rising cost of health care. When in fact, medical care has been the driving force. This considerate is critical if we want to fight the increasing cost of health care in this country.

Healthcare Vs Health Insurance


Healthcare is defined as “the field related to the maintenance or restoration of the health of the body or mind.” This also refers to any “method or procedure” concerned with a person’s physical or mental health care.

The industry in which medical professionals work is usually referred to as the health industry. Medical care is provided by doctors, nurses, therapists, dentists, hospital systems and pharmaceutical industries. The price that these providers establish for their products and services is the main driver of health insurance costs. See more!

Health Insurance

Health insurance is defined as “insurance that compensates the insured for expenditures or losses incurred for health reasons, such as hospitalization or illness.” Medical insurance companies help with financial means to assist pay for such medical care. Although health insurance is part of the general industry of health care, it should not be confused with medical care.

Medical insurance is given by companies such as Blue Cross Blue Shield, Cigna, Aetna, and UnitedHealthcare. The price that these providers establish for their services is an open reflection of the prices that healthcare providers set for theirs. Certainly, there are many other factors that are involved in the price of individual and group health insurance.

The general health of an organization’s workforce and its covered dependents, and its claims history, which can often be a reflection of the quality and effectiveness of the healthcare provided. But the prime driver is the prices set by healthcare providers as well as pharmaceutical companies.

So, Why Is It Important?

Understanding the difference between these terms is essential to control the increasing cost of medical care. Let’s say you have a homeowner’s insurance policy to protect your home. We all know that what the policy charges for home insurance does not affect the price you paid for your home, but equally, the price you paid for your home does affect the price you pay for the home insurance. The cost of your policy is a reflection of the cost of your home.

Although that example is very much simplified, the same principle applies to the medical field. Why does not the general people see health insurance’s cost as a reflection of the cost and quality of healthcare? Also, why don’t general people know that the best way to expand access to medical care is through reductions in the cost of medical care instead of mandatory access and insurance subsidies that do nothing to reduce underlying costs? Check out this site: