Health Insurance
Coverage that pays for medical expenses in exchange for regular premium payments.
What is Health Insurance?
Health insurance is a contract between a policyholder and an insurer that covers some or all of the costs of medical care — doctor visits, hospital stays, surgeries, prescriptions, and preventive services — in exchange for monthly premium payments. Key terms include the deductible (amount paid before insurance begins paying), copay (flat fee per service), coinsurance (percentage split after deductible), and out-of-pocket maximum (total cap on annual cost-sharing). In the US, health insurance is accessed through employers, the ACA marketplace, Medicaid, Medicare, or individual purchase. The ACA requires coverage of essential health benefits and prohibits denial for pre-existing conditions.
Example
A plan with a $1,500 deductible, 20% coinsurance, and $6,500 out-of-pocket maximum means: the first $1,500 in medical costs is 100% the patient's; from $1,500–$6,500, the insurer pays 80% and the patient 20%; above $6,500, the insurer covers 100%.