Health insurance is a type of insurance coverage that covers the cost of an insured individual's medical and surgical expenses. ... Depending on the type of health insurance coverage, either the insured pays costs out of pocket and is then reimbursed, or the insurer makes payments directly to the provider. Health insurance is a type of insurance coverage that covers the cost of an insured individual's medical and surgical expenses. ... Depending on the type of health insurance coverage, either the insured pays costs out of pocket and is then reimbursed, or the insurer makes payments directly to the provider.