Which of the following is an example of a private insurance?

• A. Medicare
• B. Social Security Insurance
• C. Health maintenance organization (HMO)
• D. Employers' workers' compensation insurance

Answer: (D)

The correct response identifies employers' workers' compensation insurance as an example of private insurance. Private insurance refers to coverage provided by non-governmental entities and typically involves a contractual agreement where the insured pays a premium to a private insurer in exchange for specific coverage and benefits.

Employers' workers' compensation insurance is a type of private insurance that covers medical expenses and lost wages for employees who are injured on the job. This insurance is often purchased from private insurance companies, which are in the business of underwriting a range of risk management products. The premiums paid are based on various factors, including the nature of the business and the associated risks, making it a clear example of private insurance.

In contrast, Medicare and Social Security Insurance are government programs designed to provide benefits to eligible individuals; thus, they fall under public insurance. Health maintenance organizations (HMOs) can be a bit more complex, as they may involve a combination of private and public elements, but they primarily operate in a private insurance framework, often directly competing with other private insurers. However, the essential characteristic that defines private insurance is its basis in contractual relationships and profit motives inherent in the system, which is most directly illustrated through employers' workers' compensation insurance.