Health insurance is often discussed as a monthly bill. It is better understood as protection against a cost you cannot predict and might not survive financially: a serious diagnosis, surgery or accident. In the US, where care is expensive and largely paid through insurance, going without coverage is one of the biggest financial risks a household can take.
Who is covered and who is not
Most Americans have coverage, but millions do not. The CDC's National Health Interview Survey found that 8.3 percent of Americans of all ages, or 28.0 million people, were uninsured in 2025. Many of them are young and healthy and decide coverage is not worth the premium, which works only until it does not.
What health insurance actually buys you
- Negotiated prices. Insured patients pay the plan's contracted rate, not the full list price.
- An out-of-pocket ceiling. Once you reach your plan's out-of-pocket maximum, the plan pays covered in-network costs in full for the rest of the year.
- Preventive care. Most plans cover recommended screenings and vaccines without cost sharing.
- Coverage regardless of health history. According to HealthCare.gov, all Marketplace plans must cover treatment for pre-existing conditions, and an insurer cannot refuse you or charge more because of them. Grandfathered plans are the exception.
What it costs
Employer coverage is the most common source. KFF's 2025 Employer Health Benefits Survey put the average annual premium at $9,325 for single coverage and $26,993 for family coverage, with workers contributing on average $1,440 and $6,850 respectively. The average deductible for single coverage was $1,886. If you buy your own plan, the Health Insurance Marketplace offers income-based premium tax credits, and Medicaid is available to lower-income residents under state rules.
Plan types compared
| Type | Network rules | Referrals | Best for |
|---|---|---|---|
| HMO | Usually only doctors who work for or contract with the HMO, except emergencies | Usually needed | Lower premiums, coordinated care |
| EPO | Covered only in network, except emergencies | Often not needed | Lower cost with direct specialist access |
| PPO | Lower cost in network; out-of-network covered at higher cost | Not needed | Flexibility, frequent travelers |
| POS | Lower cost in network | Needed for specialists | Middle ground |
Definitions follow HealthCare.gov. Any of these can be paired with a high deductible.
High-deductible health plans and HSAs
A high-deductible health plan (HDHP) trades a lower premium for a higher deductible and lets you open a tax-advantaged Health Savings Account. For 2026 the IRS (Rev. Proc. 2025-19) defines an HDHP as having a deductible of at least $1,700 for self-only or $3,400 for family coverage, with out-of-pocket expenses capped at $8,500 and $17,000. HSA contributions are limited to $4,400 (self-only) and $8,750 (family). These amounts are adjusted every year. An HDHP suits people who use little care and can keep savings equal to the deductible.
How to choose a plan
- Check that your doctors, hospitals and prescriptions are in network and on the formulary.
- Compare total annual cost: premiums plus expected deductibles, copays and coinsurance, not the premium alone.
- Look at the out-of-pocket maximum: it is your worst-case cost for in-network care.
- If you travel or split time between states, check out-of-network and out-of-area rules.
- Enroll during open enrollment, or within a special enrollment period after a qualifying life event such as losing other coverage, marriage or a birth.
What health insurance does not do
Major medical plans pay providers, not you. They do not replace lost income, and they may leave deductibles and coinsurance to cover. Supplemental policies such as critical illness and accident insurance, plus disability insurance, can fill those gaps but never replace comprehensive coverage.
So, is it worth it? For nearly everyone in the US, yes. The premium buys a known, budgeted cost in exchange for protection against an unknown and potentially unlimited one, and the out-of-pocket maximum puts a ceiling on how bad a year can get. Estimate costs with the health insurance calculator, read more on our health insurance page, or request options from licensed insurers.