Skip this article if you already understand health insurance.

Or if you have a weak stomach, because it is never pretty to see society's humanistic ideals challenged by a system that pits the interests of the young and healthy against those of the old and sick.

But that's insurance - and here's how it works:

Insurance is about risk.

Insurance buyers, worried about being unable to financially manage sickness, pay a little so someone else - the insurance firm - will pay the brunt of unexpected bills.

To make a profit, insurers employ clever mathematicians who calculate the odds of people actually getting sick and how much those sicknesses will cost. Then insurers charge more than that amount for the premiums. That's called underwriting.

One way to make sure there is enough money is to spread the risk of problems across a large group. If the group is large enough - like the size of the entire Philadelphia region or a huge company like Comcast Corp. - chances are that most people will not need all their insurance.

That is called community rating. It helps the old and the sick, because they may use more insurance than they are buying.

But it is not so wonderful for the young and healthy, who are helping to foot the bill.

Under community rating, a small company that mostly employs 25-year-old males is probably paying for more insurance than it needs. The gap between what it needs and what it pays could be so big that the company may decide it cannot afford to offer insurance, if it can still find people willing to work without it.

And it just might - the young never imagine being old and frail. Starting out, they would rather buy a car or pay off college loans than see insurance money sucked out of their checks.

So that type of employer would prefer what is known as medical underwriting. Charge us, they say, based on what we are likely to need (not much).

The flip side is that a company that employs more older people will pay a lot.

And it is unpredictable.

When insurers charge based on use, one employee in a small business who gets cancer can dramatically change the next year's insurance bill.

And forget about young women. From an insurance perspective, they have a disturbing and expensive tendency to give birth.

So, will small businesses, where owners are acutely aware of every expense, stop hiring the old and the female?

Or will cash-strapped small businesses sink under the cost of insurance, putting their people out of work? Is it good for society if young people ditch coverage?

Not pretty.

So what is the solution?

Good health, of course. Healthy people of all ages use fewer medical resources.

But after that, short of completely upending the employer-based health-insurance system, legislators and regulators do a lot of jiggering on the continuum between community rating and medical underwriting.

Instead of charging a company based on the general health of a whole community, insurers may be able to vary the premiums based on the age of the employees - or other nonmedical factors.

That is called adjusted community rating, or demographic rating. Various modifications can come into play - the cost of medical care in the region, the type of company, the sex of the employees.

Or, if insurers can charge by medical conditions and habits, such as smoking, they can only bill the most expensive company double, or some other multiple, of what they charge the least expensive company. That is called rate banding.

All the legislation being talked about in employer-based insurance essentially plays around with those two ideas and one more - the competitive climate in the marketplace. One goal is to encourage competition by giving small insurers more leeway in how they charge customers, to the dismay of the larger insurers.

All of this jiggering is subject to fierce lobbying. And that is not pretty either.

But that's insurance.

Contact staff writer Jane M. Von Bergen at 215-854-2769 or jvonbergen@phillynews.com.