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Health insurance is insurance against the risk of incurring medical expenses among individuals. By estimating the overall risk of health care and health system expenses, among a targeted group, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to ensure that money is available to pay for the health care benefits specified in the insurance agreement.
Backed by a financial windfall that has distributed extraordinary wealth throughout the N.B.A. this summer, the National Basketball Players Association will offer improved access to health insurance to more than 1,500 retired players.

The upgrade, made to part of the collectively bargained benefits package, was unilaterally enacted by the union and unanimously approved by player representatives at their annual summit meeting in late June. The union was expected to make an announcement about the decision later this week.

Under the new plan, retired players who were part of the league for at least three years can obtain a coverage plan that includes medical, hospital and prescription drug benefits. Retired players with longer tenures can have access to additional benefits, including spousal coverage.

The cost to the union for the new plan, the details of which are still being finalized, is expected to fall between $12 million and $15 million per year, according to a person with knowledge of the deal who was not authorized to publicly discuss the terms.

Michele Roberts, the executive director of the players’ union, said in a telephone interview that current players had expected the substantial salary increases many have recently seen because of monumental television contracts signed by the N.B.A. two years ago. But the move to bolster health insurance for retirees, she said, had come up before those increases.

“The idea germinated well before the dollars that we’re now seeing became real,” Roberts said. “I’m able to say with some level of certainty that, even were it not the case that this new money came into the system, this was something the players wanted to see happen.”

Previously, the N.B.A. players’ union offered health reimbursement accounts for players who had retired after the 2000-1 season, with coverage up to around $30,000 per year. Older players who had played in the league before the 2000 season were not eligible.

“This is a very positive step for basketball,” said Robert A. Boland, director of the master of sports administration program at Ohio University and a former agent and sports lawyer.

Boland has studied athletes who have experienced financial hardship after their careers and found that medical coverage has been one of their heaviest burdens. “It’s one contributing factor, but to remove one contributing factor is helpful,” he said.

He added, “This is what unions should be doing.”

Len Elmore, a CBS commentator and a former chairman of the board of the N.B.A.’s retired players association, praised the move as one that had surpassed his expectations. He said that health care coverage had been an ongoing source of frustration for many of his fellow retirees, going back at least 15 years.

“It’s difficult for a lot of guys who weren’t compensated the way players are compensated today,” said Elmore, who played in the N.B.A. from 1976 to 1984.

In recent years, the players association had arranged cardiac health screenings in various cities for retired players. Elmore and his colleagues had argued that it was still not enough.

“I think the prohibitive cost was a part of it,” he said, when asked why the union had not done more on its own until now. “I also believe that it was simply not at the head of priorities.”

As with just about anything concerning health coverage, comparing health plans for retired athletes in different sports can become intricate.

In the National Football League, the players’ union — under its current executive director, DeMaurice Smith — has established the Trust, an organization intended to support retired players with health and postcareer concerns.

Bahati VanPelt, executive director of the Trust, said free comprehensive health screenings were available to eligible former players upon request.
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Over all, the N.F.L. allows former players with at least three years of service to retain the league’s fully paid COBRA plan for five additional years after retiring. After that, players can elect to keep the plan and pay for their own premiums or find other insurance.

A spokesman for the Major League Baseball Players Association said the league’s health plan allowed retired players with at least four years of major league service to choose from three options of coverage that have been significantly subsidized through the collective bargaining agreement with the owners.

Chris Paul, the All-Star point guard for the Los Angeles Clippers and the president of the N.B.A. union since 2013, said in a telephone interview that “this wasn’t about any of the other leagues, this was about the N.B.A.”

“It was about us as players doing something for each other,” he continued, adding, “It’s really meaningful and really powerful.”