Health insurance is a form of insurance, which pays for medical expenses. It may even include insurance covering disability or long term nursing or custodial care. It may be provided by the government through a social insurance program or by private companies.

As the United States does not have a national Health Care system as in Britain, it is necessary to have health insurance coverage, if a person does not want to pay high medical expenses through his pocket. Sometimes medical bills can be so high that an individual finds it very difficult to pay for his illness. Hence a person should be covered by necessary insurance as soon as possible and should not wait for a catastrophe to happen.

Insurance covers health care for medical problems or other problems only from the time a person has his policy. As no one knows when he may fall sick or have an accident or other health related problems, it is always better to have an insurance policy soon. Health insurance can be purchased on a group basis when the organization or the employer pays for the entire group or it can be purchased by the individual customer, especially if he is self-employed. In each case the group or the individual pay the required premium regularly to protect themselves from high or unexpected healthcare expenses. Social welfare programs funded by the government may also give similar benefits for paying medical expenses.

Serious illnesses can run up heavy bills and if a person is covered by health insurance, the insurance company will cover his bills. Most people in the United States are enrolled in some health insurance plans. There are different types of managed care like the Preferred Provider Organizations (PPOs), Health Maintenance Organizations (HMOs), point of service (POS) and fee for service plans. The individual may have a choice of health insurance covering policies and he should study all the options, terms and conditions before he signs on the dotted lines. Some companies give money only on health grounds while others may give insurance money for plastic, cosmetic or body sculpting surgeries.

Individuals enrolled in health care plans pay monthly or quarterly fees. Health insurance estimates the overall risk of health care expenses and calculates a finance structure whereby the person, his employer or his organization pays a monthly or annual tax that will make sure that money is available to pay for the healthcare benefits specified in the insurance agreement. This benefit is administered by a central organization, which can be a government agency or a private or a not-for-profit entity operating a health plan.

About 84% Americans have health insurance, 60% obtain it through the employer and 9% purchase it directly. The rest of the people have various government agencies to provide coverage. There are public programs, which provide the main coverage of medical expenses to senior citizens and for low-income families. These are Medicare which is a federal social insurance program for seniors and disabled individuals; Medicaid which is funded by the federal government and the states but administered at the state level and SCHIP which helps children and families who cannot afford private coverage but do not qualify for Medicaid.