An insurance company collects premiums and then distributes that money to pay doctors, hospitals and other providers for the healthcare costs of its clients. Most people have group health insurance policies through an employer or another group to which they belong. Individual policies are sometimes difficult to obtain but they are available from some insurers particularly for a young and healthy individual.

A health plan or healthcare company defers management of health care decisions and distribution of payments to its own organized group of administrators. They organize their own network of providers and set up their own organizational structure. For patients who participate in a health plan, the executives oversee management of health care for their clients and management of the funds that are used for payment of the healthcare services.
Insurance companies, health plans and healthcare organizations usually operate for profit.