Do you really need health insurance? To insure or not to insure? That is the question. To be honest, you don’t really need health insurance. That might sound odd coming from an insurance agent.
It’s not like you can’t go to work and make a living without health insurance.
It won’t stop you from having a family or travelling or taking a vacation.
You can still eat and go shopping.
Not having health insurance is not going to prevent you from doing much of anything.
You can even go to the doctor!
So, no. You don’t need health insurance. Not at all. I have many friends that have gone years without health insurance. They self-pay at the doctor and have managed to avoid serious illness and injury. And that one time they incurred a large bill they either negotiated it down to where they could pay it all at once, made payments or used a credit card to cover it. But, they rarely got into financial trouble due to not having health insurance.
In fact, I have had very successful friends that could easily afford the best coverage available, simply skip the expense of health insurance because they felt that it was a waste of money. A rip-off. They too never got into trouble financially for not having health insurance. They did not feel like it was that much of a risk.
I have interviewed hundreds of people at my Nashville health insurance company and found that people fall into 3 categories. The first one is mentioned above. The 2nd is those that want health insurance to help defer the cost of their medical expenses. And the 3rd is those that want to protect their home, assets, savings, etc. from forfeiture in the event of a lawsuit or bankruptcy due to hefty medical expenses.
These 2 other groups fall in to the “need and want” health insurance people. That second group, the ones that need help with their medical expenses also fall into separate groups, but I won’t make this a tedious read for you. Simply put they will save money each year by carrying health insurance sufficient enough to reduce or eliminate their medical expenses.
This can be from an ongoing medical conditions that require ongoing care and treatment or expensive medications. The cost of the premiums and deductibles will still be significantly less than their own personal out of pocket costs without the insurance.
So someone that needs to be hospitalized at least once a year due to health issues or needs durable medical equipment year round will save thousands by carrying insurance. If their semi-annual hospital stay costs $65,000 and they only pay $15,000 in premiums and deductibles then they would be saving a mountain of cash every year by having coverage.
The other group that want insurance are those that also need it to defer some medical costs. It works out the same, but a little different scenario. This is usually someone in a lower income range. Or someone that spends all of their income on living expenses and the added medical expenses would literally take food off the table.
This is the single parent, the college student, the minimum wage worker. They need the insurance so that if they did have to see a doctor or visit the emergency room they are not going to have to come up with a lump sum of cash to cover the bill.
Even a minor injury can rack up a $2000 bill. That could be a month’s pay for someone. Or more. How are they going to find that much money in an already thin budget? They won’t. But, if they can find an affordable plan that will cover the majority of that bill it will be much better financial decision than going uninsured. They can make small monthly payments to the insurance vs being hit with one large bill. And it buys them more than just the benefits the insurance provides. It ensures they will not be turned away at the ER or doctor’s office for services.
Doctors and hospitals want to get paid, understandably. They do a lot of charity work and write off many bills as losses. But, you may not be on the winning end of that lottery. You may be held to pay that bill. They may want a deposit or have the services paid before you leave. Or they may limit the care provided to the barest of minimums or turn you away completely.
I had a client, with insurance mind you, get turned away for a much needed procedure because she could not prove that the insurance would pay for the procedure. And this was not going to be that expensive. A few thousand dollars. But, they would not even admit her without proof from the insurance company or payment from her directly. So you can get turned away for services.
Of course, I went to bat for her with the insurance company and we found the money under a specific portion of her coverage. But, without the insurance she would not have gotten the treatment she needed.
A single parent that needs to bring their children in for their annual check-ups can spend a small fortune on just that. Never mind an injury or illness that requires follow-up testing or additional visits. They could go broke quickly. Sadly, they may skip seeking medical help for minor things so they can feed their kids and pay the light bill. Again, an inexpensive plan that will cover the majority of these bills will be a cost saving strategy over the course of a year.
That 3rd group that will need and want health insurance is at the opposite end of the income spectrum. This is the above average earner. Sometimes, there are two above average earners in the household. When I talk to them about insurance their needs are generally very different than that 2nd group’s.
They do not need financial assistance to cover ongoing health care needs. They are not worried about a $2000 medical bill. They can pay most routine costs out of pocket. They can usually pay larger bills easily with cash or on a credit card. They do not live paycheck to paycheck.
They have, over time, accumulated assets. They have retirement accounts, second homes, savings, stocks, 401ks, etc. What they tell me is that if they had to cover a large bill they could. But, they would be broke. They would have to sell and liquidate all of their assets and start over.
They could file bankruptcy, as can anyone. But, that would leave them with almost nothing. Just so you know, medical bills are at the top of the list for reasons people file bankruptcy. Second only to losing their employment.
So rather than risking their kids’ college funds and retirement accounts they prefer to shift that risk to an insurance company. Which is the entire purpose of insurance. The shifting of risk. If you need $500K for medical bills, it will be there for you. If you never need it then your invested monies will go to someone else if they need it and you get the peace of mind knowing you have a safety net in place. That everything you have worked for is gone in a blink.
With the right plan this group of people can limit their financial exposure to a few thousand dollars. Much easier to deal with than a 6 or 7 figure financial black hole.
Having health coverage is a personal decision dictated by need. Both financial and medical. You can go without health insurance if you prefer. But, if you can afford even the most basic plan, I suggest you do.
