The AHRQ is the government agency for healthcare research and quality. They have a very well written section that explains health insurance to the public. In my experience as a physician, I have realized that most people have little understanding of what they are buying in terms of health insurance or what they are being given by their companies. Only when they get sick and really need health insurance do they ever bother to read their policy -- but then realize it was too late to make any changes. Everyone should have a basic understanding of health insurance as Everyone eventually will get sick and end up in the hospital as it is only a matter of time. This site does a great job of educating the public on the basic principles of health care insurance so people can make an informed decision when they choose their plan. Here is a link to the page that discusses it

http://www.ahrq.gov/consumer/insuranceqa/insuranceqa3.htm