Insurance

• Insurance is a business agreement between a policyholder and an insurance company. The policyholder agrees to pay a certain amount of money each year, usually broken up into regular partial payments. The insurance company agrees to pay larger amounts of money if a specific hardship happens to the people covered by the policy.
  
  

Health Insurance

• Health insurance pays out money when the hardship covered by the insurance is a medical bill. When somebody covered under the policy incurs a medical expense, the insurance company pays out money to help. Some policies cover most of the expense of all medical treatment. Others cover only a small part of the expense, or limit the kinds of treatment they will help pay for. In general, the more a health insurance policy pays for, the more expensive it will be.
  
  

High Risk

• Insurance of all kinds costs more when an insured person's risk is higher. For medical insurance, a high-risk person is somebody who is likely to need frequent and/or expensive medical treatment. Some examples might be somebody with cancer, someone who works in a high-risk profession or a person with a risky hobby like scuba diving.
  
  

High Deductible

• One way of reducing the cost of insurance is to agree to pay a higher deductible. A deductible is an amount of money the insured person must pay out of pocket before the insurance company pays anything. For example, a policy with a $100 deductible would require the policyholder to pay $100 of a $500 bill and all of a $75 bill. One variant of high-deductible health insurance is a policy that specifically excludes injuries related to a high-risk activity. For example, many policies allow a pilot to pay normal rates in exchange for not having to pay for injuries related to a plane crash.
  
  

Health Insurance Reform Act

• The 2010 Health Care Reform Act requires many immediate changes to health insurance law and will institute further changes through the year 2020. Some of these changes will make it easier for high-risk individuals to get affordable health care without resorting to high-deductible plans. As of 2010, most of these provisions have not yet come into effect.