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How does insurance work?

Healthcare is expensive. Even diagnosing and treating a short-term illness can cost thousands of dollars. Health insurance is a way to spread out the cost of healthcare among a group of people. The premiums we pay each month create a pool of money so when someone in the group is sick or injured, money from the pool pays for their healthcare. Some people pay in more than they ever use. Some of us get back more than we pay in.

Why is insurance so expensive?

Insurance is expensive because healthcare costs are high. With high healthcare costs, the pool of money needs to be big enough to cover costs when people get sick. The pool of money must also needs to be big enough to cover those without health insurance or those who get healthcare at a reduced cost.


Health Insurance and Healthcare Reform

The Patient Protection and Affordable Care Act (ACA) is a response to the urgent need to improve healthcare access, quality and costs. The main goals of healthcare reform are to:

  • Protect consumers, make healthcare affordable and hold insurance companies accountable
  • Contain costs of private insurance and public programs
  • Reduce Medicare and Medicaid waste, fraud and abuse
  • Expand coverage to the uninsured

Learn more about Healthcare Reform

How does Health Insurance work in United States? Take a look at this video

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