What Is Health Insurance?Health insurance is a way to pay for health care1. It protects you from paying the full costs of medical services when you’re injured or sick. Just like car insurance or home insurance, you choose a plan and agree to pay a certain rate, or premium, each month. In return, your health insurer agrees to pay a portion of your covered medical costs. Payments by your health insurance are typically based on discounts they negotiate with doctors and hospitals.
Each plan is different, but you can usually find a plan to cover preventive care, like doctor visits and screenings, as well as hospital visits, ER trips, and even prescription drugs. Some plans cover vision and dental, but you may need to purchase these plans separately.
1 The word “care,” refers to the medical services covered by your plan. When you choose a plan, you will receive materials that explain your benefits so you know what types of services are covered.