What you need to know
Simply put, health insurance saves you money. Learn more about how health insurance works in our guide to health insurance basics.
Compare it to other types of insurance: you buy auto insurance so a company pays for your car to be repaired as well as compensate people injured in accident. You buy homeowners insurance to avoid paying out of pocket to repair your house if it's damaged. You buy health insurance to help reduce the cost to see a doctor, get medical attention in an emergency, and manage chronic conditions.
Take cancer, for example. According to the US Government's National Cancer Institute, the cost per year for treating cancer was $40,000 in 2010, and expected to be $48,000 in 2020. Without health insurance, you're paying for all of that, instead of a portion of it.
For an uncomplicated childbirth, costs can range from thousands to tens of thousands of dollars. Without insurance, you'll pay the entire amount that the hospital, the doctors, and everyone else involved in bringing your child into the world charges.
You'll likely have a deductible on your health insurance plan, which means you need to pay a certain amount before your health insurance kicks in. But if you're getting services from in-network providers, you're paying less than you would without insurance. Additionally, there's a limit to how much you're allowed to spend out of pocket. If you have a significant medical situation – heart attack, cancer, childbirth – you'll pay significantly less on a health insurance plan than you would if you had no insurance and are responsible for the entire bill.
(Note that some health insurance plans don't cover dental and vision care. For those and other types of coverage you may need, look into supplemental health insurance plans.)
There are several different types of health insurance, and they can different on how you get care, so it's important to choose the right one. Learn how to decide between HMOs, EPOs, PPOs, and other types. Note, however, that regardless of the plan you choose, if it conforms to the U.S. governments regulations on health care, then it will cover essential health care expenses.
How much you pay for health insurance also varies between plans. Choose a plan in the correct metal tier to make sure it's affordable for you. The total cost is calculated as your monthly health insurance premium.
Learn more about the different types of health insurance.
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