What is private insurance?

Your guide to understanding the private health insurance marketplace.

Published September 11, 2019

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What you need to know

The word "private" is used to describe any health insurance plan that is not run by the federal or state government. Private insurance can be purchased from a variety of sources: your employer, a state or federal marketplace, or a private marketplace.

There are a wide variety of options when it comes to private health insurance plans. All private health insurance plans are designed to split the cost between you and the insurer, making medical care more affordable for you. These cost-sharing methods come in the form of deductibles, copays, and coinsurance. When shopping for a plan, look for the right balance between the monthly cost of the plan and the cost sharing methods.


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The opposite of a private insurance plan is a public insurance plan. There are a few government-run health insurance plans you may be aware of. Medicaid is a state-run insurance that helps people with low incomes pay for health care services. Medicare is a similar program for people age 65 and older. Another popular government-run program is CHIP, the Children's Health Insurance Program, which provides free or low-cost health insurance to children who otherwise are not covered by a private plan or Medicare.

Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.