Health insurance in the United States is a type of financial protection that helps pay for medical expenses such as doctor visits, hospital stays, prescription drugs, preventive care, and emergency services. Because healthcare costs in the U.S. are among the highest in the world, having health insurance is essential to protect yourself from large and unexpected medical bills.
In this complete guide, we’ll explain how health insurance works in the USA, key terms you must understand, types of plans available, and how to choose the best option for your needs.
Why Health Insurance Is Important in the USA
Medical care in the U.S. is expensive. For example:
- A single emergency room visit can cost thousands of dollars.
- A hospital stay may cost tens of thousands.
- Prescription medications can be very expensive without coverage.
Health insurance reduces your out-of-pocket costs and protects you from financial hardship. It also gives you access to preventive services such as annual checkups, vaccines, and screenings that help detect health problems early.
How Health Insurance Works
When you enroll in a health insurance plan, you agree to pay a monthly amount called a premium. In return, the insurance company helps cover your medical expenses based on the plan’s terms.
Here’s how it typically works:
- You pay a monthly premium.
- You may need to pay a deductible before insurance starts covering costs.
- After meeting the deductible, you share costs through copays or coinsurance.
- Once you reach your out-of-pocket maximum, the insurance company covers 100% of covered services for the rest of the year.
