Health insurance is a financial management tool that helps reduce the amount people will pay otherwise for high-cost medical care. Having a health insurance policy means that you do the following:
- You pay a financial charge, which is called the premium. These are usually monthly, but can be quarterly and even annual. This is a fee for having the health plan.
- Many health plans have what is called a deductible. A deductible is the amount the policyholder has to pay for care until their health plan kicks in to share a percentage of the costs.
- Once the policyholder meets their deductible and the plan steps in, the insurance company starts sharing costs with your plan. For example, the health plan may pay 70% of your medical costs, and you may pay 30%. This is called “coinsurance.” Most insurance ID cards will show the deductible and coinsurance rates.
Preventive care is usually 100% covered. This includes standard items like an annual medical check-up, seasonal shots, kids’ vaccinations, general wellness screenings, and more.
Policyholders save money when they stay in-network. Network providers agree to give lower rates to the insurance company’s customers. You can usually find a list of network providers on your health insurance website or by calling and asking them for a list of in-network providers. This is a key part of how health insurance works to help keep your costs low.
To learn more about deductibles, copays, and coinsurance, visit our blog Understanding Health Insurance Deductibles, Copayments, and Coinsurance Concerns in Pakistan.
How To Get Health Insurance
Many employers include some form of a health plan as part of their job benefits. They work with the insurance company to design the health plans they offer you. Employers can choose to include certain programs and services for their employees’ benefits, as well.
In case your workplace doesn’t offer health insurance, you can buy one on your own through a health insurance company. You’ll have to research thoroughly, as there are multiple options to meet different needs.
What Health Insurance Covers
Health insurance plans can cover a wide range of medical care and services. Common items include preventive and non-preventive care, while emergency care is a usual fixed item. Some policies can also offer coverage for behavioral health, and some categories of vision and hearing care.
What people pay out of pocket and what their plan helps pay for can depend on several factors. These include whether you’ve met your deductible, what your coinsurance is, if you are getting care from in-network providers and facilities, if your care is preventive or not, and more.

Some examples of health insurance benefits your plan may cover include:
- Preventive visits: Things like an annual check-up (adult or child) are typically covered 100%.
- Vaccinations: Some vaccinations are covered 100%, too. For example, many plans pay for an annual flu shot and certain kinds of childhood vaccinations.
- Non-preventive doctor visits: For in-network doctors and specialists, you get a reduced rate as part of the network. Your plan helps pay its share of the cost once you’ve met your deductible.
- Hospitalization: Your plan helps pay its share of the cost once you’ve met your deductible. You will pay less if you go to a hospital that’s in your plan’s network, if required.
- Emergency Room: Many health plans do not require you to go to an in-network ER in an emergency, but plans can differ.
- Lab work: If you go to an in-network lab, your costs for lab work will be lower. Your health plan negotiates lower rates with them, too.
- Additional coverage that’s added to your health plan: Coverage for cancer care, accident coverage, and more can help you pay for care that’s often costly and unexpected.
What Health Insurance Usually Doesn’t Cover
What’s not covered by health insurance can also vary depending on the plan. Here are some types of services that are not typically covered:
Alternative medicine: Such as massage, acupuncture, herbal healing, and more.
Vision Care: Most insurance policies do not cover visits to the ophthalmologists and eye care expenses.
Dental Care: Many insurance policies do not cover visits to the dentist, as well as orthodontic procedures or even extractions.
Cosmetic surgery: Things like plastic surgery, laser skin removal, liposuction, rhinoplasty (nose job), etc.
Weight-loss surgery: Gastric bypass and bariatric surgery may not be covered. This depends on the plan you get, though. Some procedures may be covered if medically necessary, so check your plan documents carefully.
Vein surgery: Laser surgery to correct spider veins is often considered cosmetic and may not be covered unless a doctor can show it’s medically necessary.
Elective surgeries: Especially surgeries for which a doctor cannot prove a medical need.
Unapproved medical care: If you fail to get a required prior authorization for care or a service, your health plan may deny you coverage. Prior authorization is pre-approval from your health insurer. Many health plans require this type of pre-approval for certain types of procedures or treatments.
Your Summary of Benefits Coverage (SBC) document that comes with your health plan will itemize the care and services covered, as well as what’s not covered. When you know how your health plan works, you are better able to avoid paying unnecessary out-of-pocket costs.
The Benefits of Having Health Insurance
The benefits of health insurance include:
- Lower out-of-pocket costs for care since it’s shared with your health plan.
- Coverage for unexpected costly medical care, such as hospitalization and care for a serious illness like cancer, or in the event of an accident or serious injury.
- Peace of mind—having a health plan may give you some comfort in knowing that there is a limit to how much you need to pay out of pocket for costly medical care. In addition, since your health plan pays for most preventive care, you can also have the peace of mind that you and your family can get all your routine care, with little to no additional cost. (Some plans may require a small copay at the time of a visit.)
When To Get Health Insurance
Health insurance only works when you have it. Consider your lifestyle. Do you live risk-free, or do you like to live life on the edge? Adventurous? Or a homebody? Do you have a chronic health condition that requires treatment? Do you have a family to care for? These are things to keep in mind when considering whether you should get health insurance:
If you are offered a health plan through your employer, you should get it. Your employer helps foot the bill for your medical care. Preventive care is usually at no cost to you—a big savings for you and your family.
In general, how health insurance works is similar across plans, but depending on your needs, the details of your medical coverage can vary. Make sure to learn about your particular health plan or any plan you’re considering enrolling in.

Sadia Zaheer holds a Masters in Business Administration from IBA, Karachi. After working in several financial institutions in Client Management, Corporate Lending, Islamic Banking and Product Management she jumped careers to pursue a career in writing.
She is a Finance, Business and HR Development writer with four years of experience. She reads a lot and takes care of her multiple cats to remain calm.