Health insurance uses the contributions of all members of the plan to cover a share of the cost of medical care for everyone under the plan. Every member pays a set premium each month. If you end up needing care, the plan will pay a portion of it.

How much it covers depends on your plan. Most plans have you share in the costs—up to a certain amount—through a copayment, coinsurance, and/or deductibles, but it’s likely much less than paying for health care all on your own.

By spreading the costs among the group, you are protected if your care costs more than the amount you actually paid in premiums.