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Health Care 101 Toolkit

Health insurance is a vital part of our everyday lives, providing us with peace of mind, both from a health and a financial perspective. But what exactly is health insurance, and what do health insurance providers do? AHIP’s Health Care 101 will walk you through the industry, covering everything from commonly used terms, to regulations, to defining the various health insurance markets.

What is Health Insurance?

Every American deserves access to affordable health coverage and high-quality care. That’s what health insurance is committed to delivering: more choices, better quality, and lower costs.
  • Health insurance helps you access health care and helps you finance your future health care costs.
  • Health insurance reflects the cost of purchasing health care. If costs go up, health insurance costs will go up as well.
  • Health insurance also works to take care of Americans’ health needs – from mental health to physical health, emergency care to chronic health conditions, and addressing health inequities and social barriers that get in the way of better health.
  • People buy health insurance, joining with others in a “risk pool” that empowers health insurance providers to negotiate lower prices with hospitals, health systems, and providers.
  • A risk pool is group of individuals whose medical costs are combined to calculate premiums.
  • Pooling risks together allows the higher costs of the less healthy to be offset by the relatively lower costs of the healthy and is one way to make health care affordable for everyone.
  • Patients also benefit from spreading the risk – so in case of a health emergency or serious illness, their treatment won’t break the bank.
  • Health insurance providers are an advocate for Americans – ensuring their voices are heard, and leading the fight for more affordable coverage, access to high-quality care, and more choices so people can find coverage that’s right for them.
  • Providers gain access as a preferred resource to those patients and consumers when they meet certain quality requirements. Consumers in turn can benefit from lower health care costs and higher-quality care.

What Value Do Health Insurance Providers Bring?

Health insurance providers have a 360-degree view into the patient experience and the health care system, giving them a strong perspective into what solutions will work to improve patient outcomes, affordability, access, and value.
  • Health insurance providers are reimagining health care, promoting a system based on value and improved health versus a system that pays for the volume of services provided.
  • Health insurance is a competitive market, in which clients and consumers have many choices among plans. Health insurance providers compete on the value they deliver – so they have every incentive to negotiate for the lowest possible costs for their members.
  • Getting the best possible price for prescription drugs, covering the most effective technology and treatments, preventive care to help you avoid getting sick, and helping you get better when you are sick – that's our mission, and we’re working hard to deliver it.
  • Health insurance providers are harnessing their collective experience to build a health system that supports all people, turning insights into innovations so that everyone can thrive in good health. Delivering better care at lower costs for every American. They recognize that we must all work together to improve health care.
  • Health insurance delivers financial peace of mind, especially when there’s a medical emergency or serious illness.
  • Health insurance providers negotiate lower prices with doctors and hospitals, lowering costs for Americans.
  • Health insurance providers are focused on improving affordability and access to health coverage and care.