What is the significance of "health insurance" in healthcare economics?

The significance of health insurance in healthcare economics is primarily that it provides access to necessary medical services. Health insurance acts as a financial safety net, allowing individuals to seek care without the burden of overwhelming out-of-pocket expenses. When individuals have insurance coverage, they are more likely to receive preventive care, timely medical attention, and necessary treatments, which can significantly improve health outcomes and reduce long-term healthcare costs.

Having health insurance increases the likelihood that individuals will utilize services they may otherwise forgo due to cost concerns. This access contributes to a healthier population overall, which can lead to lower healthcare expenditure in the long run as preventive care and early treatment can reduce the need for more costly emergency care and complicated medical interventions. Thus, the role of health insurance in facilitating access to care supports broader healthcare economic goals by improving population health and managing costs effectively.