A health emergency can bankrupt a family in a single afternoon — but if we all chip in a little, that catastrophic cost becomes manageable. That is the promise of health insurance, and it sounds simple enough. In reality, the market for health insurance is full of hidden information and misaligned incentives that drive up costs, leave people uncovered, and even trap workers in jobs they hate. In this chapter, we’ll explore why health insurance works the way it does, what goes wrong when buyers and sellers know different things, and how policy can nudge the system toward better balance.