What is health insurance?
Health insurance is an agreement between an insurance company and people who choose the plan. When you enroll in a health insurance plan, the insurance company pays some or all your health care costs based on the plan you enroll in.
The amount you pay for insurance is called a premium. The three most common ways to pay for health insurance are:
- Payroll deduction: If you get health insurance through your employer, the company deducts your part of the premium from your paycheck.
- Direct payment: You pay the health insurance company.
- Low- or no-cost coverage: The federal or state government or some other organization pays some or all of your premium or other costs.