How Health Insurance Works
When you have health insurance, your medical bills go first to your health insurance plan. Then, they pay for some or all of that bill according to the plan’s details.
In a way, health insurance is a lot like car insurance. If your car is in a bad accident and needs a lot of work to repair it – or maybe it needs to be replaced entirely with a new car – car insurance picks up some or all of the cost. And that’s good, because the cost of fixing or replacing your car could easily be more than you have in your bank account.
But, unlike car insurance, health insurance covers far more than just the costs from a bad accident. Health insurance often covers things like annual checkups, vaccinations, preventive health and other “routine maintenance” for your body and mind. It’s like if car insurance helped pay for oil changes and tire rotations.