What role do insurance companies play in the context of private firms?

Insurance companies are fundamentally involved in the manufacturing and selling of insurance coverage, which is essential for managing the financial risk associated with unforeseen events, including healthcare expenses. This manufacturing process includes developing various insurance products tailored to meet different needs, setting premium levels, and determining coverage limits.

By selling this insurance coverage, they provide individuals, families, and businesses with protection against financial losses that can arise from health issues, accidents, or other liabilities. The ability to pool risk among many policyholders helps to create a system where the financial burden of covering healthcare costs is shared, thereby making health services more accessible.

While some insurance companies might partner with or support healthcare providers in managing care, their primary role remains centered on the creation and distribution of insurance products rather than directly delivering health services or regulating healthcare policies. This distinction highlights their critical function as facilitators of financial protection in the healthcare landscape.