Final answer:
The correct term for an insurance company that pays for an individual's healthcare is 'Payer'. Insurance payers cover health-related expenses as per the policy's terms, while policyholders might be responsible for deductibles and copayments.
Step-by-step explanation:
The term used to identify an insurance company that pays for the healthcare of covered individuals is C. Payer. Private insurance, which includes different types of policies like employment-based insurance, direct-purchase insurance, and Part B optional insurance, is designed to cover health-related expenses. When a person receives medical care, the insurance payer takes responsibility for covering the costs according to the terms of the health insurance policy, less any deductible, copayments, or coinsurance amounts that the policyholder is required to pay.
Policyholders might encounter different types of health plans, such as a fee-for-service arrangement or a health maintenance organization (HMO). In a fee-for-service plan, medical care providers are reimbursed for each service provided. In contrast, an HMO offers care and is paid a fixed amount per person enrolled, regardless of the number of services that the enrollee uses.