ABSTRACT
This chapter focuses on the insurance market and the behaviors of firms within that market. It explores who pays for health insurance, within the context of the employer-provided health insurance common in the United States. The chapter examines employer-provided insurance and job mobility looks at the traditional community-rated health insurance, and shows how that market has changed. It describes the impact of the Affordable Care Act and its mandated coverage on the level and percentage of those who are uninsured. At least two organizational and practice issues characterize the health insurance industry and link it to the emerging issues of managed health care. The organization and cost conditions in some health insurance markets, however, suggest that some contingencies may not be insurable. Consumers can improve their well-being through insurance by sacrificing a small but certain premium to insure against the probability of a considerably larger loss. Insurance firms incur costs of doing business that are added to the claims payouts.
