Payor

In healthcare, a payor (or payer) is a person, organization, or entity responsible for covering the cost of medical care provided by a healthcare professional. This term most often applies to health insurance companies that offer plans covering treatment costs and reimbursing providers for services rendered.

There are three main types of healthcare payors:

Government or public payors

Government or public payors are health insurance programs funded by the U.S. government, including Medicare, Medicaid, Children’s Health Insurance Program (CHIP), TRICARE, and the Veterans Health Administration. These programs provide coverage to eligible individuals based on age, income, military service, or disability status.

Commercial payors

Commercial payors are typically for-profit, publicly traded insurance companies—like Aetna, Elevance Health (formerly Anthem), or UnitedHealthcare—that offer health plans through employers or directly to individuals. This category also includes plans sold through the Affordable Care Act (ACA) marketplace, often referred to as “individual market” or “exchange” plans.

Private payors

Private payors include a broader group of non-governmental entities that pay for healthcare services. This encompasses non-publicly traded insurers (like certain Blue Cross Blue Shield affiliates), employer-sponsored self-funded (or self-insured) plans, and individuals paying out-of-pocket. While there’s overlap with commercial insurers, the term “private payor” also covers smaller or nonprofit insurers and health plans that may not be offered on public exchanges.

What’s the difference between “payor,” “payer” and “payee”?

The terms “payor” and “payer” have the same meaning and are often used interchangeably.

A payee is the person or entity who receives payment in exchange for services. In healthcare, this is typically the provider (e.g., physician, hospital, clinic), depending on how the claim is processed.