Understanding Health Insurance: A Health Plan is a Contract [US, healthcare, Patreon]
Dec. 8th, 2025 07:42 amCanonical link: https://siderea.dreamwidth.org/1890011.html
What we call health insurance is a contract. When you get health insurance, you (or somebody on your behalf) are agreeing to a contract with a health insurance company – a contract where they agree to do certain things for you in exchange for money. So a health insurance plan is a contract between the insurance company and the customer (you).
For simplicity, I will use the term health plan to mean the actual contract – the specific health insurance product – you get from a health insurance company. (It sounds less weird than saying "an insurance" and is shorter to type than "a health insurance plan".)
One of the things this clarifies is that one health insurance company can have a bunch of different contracts (health plans) to sell. This is the same as how you may have more than one internet company that could sell you an internet connection to your home, and each of those internet companies might have several different package deals they offer with different prices and terms. In exactly that way, there are multiple different health insurance companies, and they each can sell multiple different health plans with different prices and terms.
( Read more... [7,130 words] )
This post brought to you by the 220 readers who funded my writing it – thank you all so much! You can see who they are at my Patreon page. If you're not one of them, and would be willing to chip in so I can write more things like this, please do so there.
Please leave comments on the Comment Catcher comment, instead of the main body of the post – unless you are commenting to get a copy of the post sent to you in email through the notification system, then go ahead and comment on it directly. Thanks!
This is part of Understanding Health Insurance
- Introduction
- A Health Plan is a Contract – You are here
Health Insurance is a Contract
What we call health insurance is a contract. When you get health insurance, you (or somebody on your behalf) are agreeing to a contract with a health insurance company – a contract where they agree to do certain things for you in exchange for money. So a health insurance plan is a contract between the insurance company and the customer (you).
For simplicity, I will use the term health plan to mean the actual contract – the specific health insurance product – you get from a health insurance company. (It sounds less weird than saying "an insurance" and is shorter to type than "a health insurance plan".)
One of the things this clarifies is that one health insurance company can have a bunch of different contracts (health plans) to sell. This is the same as how you may have more than one internet company that could sell you an internet connection to your home, and each of those internet companies might have several different package deals they offer with different prices and terms. In exactly that way, there are multiple different health insurance companies, and they each can sell multiple different health plans with different prices and terms.
( Read more... [7,130 words] )
This post brought to you by the 220 readers who funded my writing it – thank you all so much! You can see who they are at my Patreon page. If you're not one of them, and would be willing to chip in so I can write more things like this, please do so there.
Please leave comments on the Comment Catcher comment, instead of the main body of the post – unless you are commenting to get a copy of the post sent to you in email through the notification system, then go ahead and comment on it directly. Thanks!

