Friday, December 9, 2011

Can I get by without insurance?

health insurance
I woke up this Sunday morning to a cheap insurance email from a young lady from Palm Springs, California with the following question:

I'm 22 and I can afford health insurance (my company provides a subsidy) but if I buy it I will not have money for much else. I don't have any health problems. What should I do?

Well, in theory you have two options: Buy insurance or do not but insurance. You can also buy cheaper insurance than what you currently have and you will be covered less but you will be more at risk for serious injury. Often they have higher co-pays as well and very low maximum yearly benefit caps, so cheap dental insurance might only get you coverage for one or two teeth getting drilled. Let's weigh the pros of each possibility:

Buy insurance

Buying a good insurance plan and spending a lot of money on it is usually the best course of action when deciding whether or not to be covered, and it is good for a plethora of reasons.

You are more healthy and have a higher quality of life

Simply put, people in countries with single payer healthcare are more healthy than people in countries with more primitive, insurance based systems. They are more healthy because they go to the doctor more, even in countries where people also have poor diets like us Americans.

Because you are more healthy, you save money on healthcare costs (just like with car insurance in the long term

It is a lot cheaper to remain healthy than it is to get sick and get cured. Let's take cancer, for example. If you go to the doctor and get a cancerous skin growth removed, it might cost you $50. But if you let it become full blown cancer then you will have to go back in a dfew years and spend thousands on expensive radiation therapy.

You have piece of mind knowing that you will be covered if you get sick

If you have a good insurance plan then you do not have to worry about paying for it if you get sick as long as you select a good insurance company and do not have gaps in your insurance coverage. Plus, not being worriful has positive health effects since worry puts strain on your heart, among other things.

Don't buy insurance

There are, however, a few times when it is probably best to not buy insurance.

For example, let us say that buying insurance for your car will make it so that you cannot buy good health insurance. If you have kids or you or a loved one is sick then it is probably best to buy health insurance and avoid driving if possible.

Cheap insurance: You save money in the short term

A cheap insurance plan will help you save more money in the short term than getting no insurance plan and being uninsured, even though the cheap plan will not give you as good of coverage as the more expensive insurance plan. Because of this, instead of becoming full uninsured, you should instead just downsize yoour insurance plan so that it costs you and your family less money.

So, now we have the pros and cons of buying health insurance. Although some people are too destitute to buy it, when it is your choice you should really almost always buy it as long as you have enough money.

Photo credit:
Used under fair use educational exemption

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