The argument I hear for having health insurance is that they pay for unexpected expenses. But that doesn't make sense to me. If some unexpected health event happened and we ended up in the hospital, and then ended up with $100k bill, wouldn't we be able to just pay that down over time like any other debt? Why is it necessary that insurance pays the debt?
The fact that we currently spend 20% of our after-tax income on health insurance is starting to seem absurd, when we don't actually foresee needing anything but emergency hospital treatment for unexpected accidents.
You are healthy now, but there are efforts underway to repeal laws that forgive pre-existing conditions. If You you develop a condition that you felt warranted the expense you might (in the future) find it impossible to get coverage.
Why do you feel like you need to pay after tax? If you are self employed, you can typically deduct the cost of health insurance for you and your family unless you are otherwise covered by some other plan or make no income, but as you stated you do have an income. Talk to your accountant.
You feel like making $60k after tax it would be no big deal to pay down an addition $100k medical expense, but the reality is that is probably unlikely. If you have a big medical bill, are you certain you will even be able to continue to make your $60k after tax? I don't think it is unreasonable to question this. For context, two thirds of all bankruptcies in the USA are a result of inability to pay medical expenses and that includes those who actually have insurance.
I/We are well insured thankfully and when my kid broke their arm the cost for the ambulance ride from urgent care to the hospital (urgent care thought it was much too serious for them to deal with) was $1000 just for the 5 min ride. Med-Evac can be 30k or more and these are charges prior to even setting foot in the ER. God forbid you or your family gets injured, but a car wreck involving the primary bread winner will almost certainly ruin you financially for the rest of your life.
In the end though, insurance (all insurance) is a gamble. In the case of health insurance, young/healthy people feel often feel like it is not a good bet.
By the way, another option related to this specific concern is private disability insurance. It can also apparently be a lot cheaper than some kinds of medical coverage and is meant to deal specifically with the risk of lost income due to an unforeseen medical problem. It can potentially provide much higher and longer-lasting coverage than mandatory state disability insurance.
1. How many assets do you have to protect? Houses, investments, a business. If you have a bit of those, then insurance is good protection against losing them if you get sick for some reason.
2. Are you young with a good health history? Rolling the dice, you are probably low risk and won’t need much in the near future. But it is definitely a dice roll.
3. Hospitals charge more to uninsured than they charge insured. This is because uninsured typically don’t pay and are harder to collect from, so treatment goes up.
4. Likewise, if you don’t pay or they suspect you won’t pay, they don’t have to do a lot of things: just stabilize and release. Got cancer? Well, charity care doesn’t really include that specialist that might save your life.
5. Medical tourism might work if you are open to going to Thailand or India if you get anything serious. Problem is you probably won’t be able to get there for anything emergency.
6. Insurance for individuals (as opposed to group plans) really sucks: it is more expensive (people who don’t get insurance from work are higher risk), it isn’t very tax deductible (employers get a tax break on giving insurance to their employees). It is almost a bad deal, so I get why people would hesitate about it.
Keep in mind that insurance reimbursement/negotiated rates matter. You want an insurance that negotiated a super low payout (though that will limit where you can go for procedures) as that will often greatly reduce your out of pocket payment in situations where you don’t hit the catastrophic cap which will be 99% of cases.
Unfortunately, that could change overnight. Even young, healthy people can get nasty diseases, be in catastrophic accidents, etc. I knew a young, healthy person who went in for a routine checkup and ended up diagnosed with cancer.
While a single hospital stay might cost you $100K, being diagnosed with a chronic disease that requires years of treatment and follow-up could be much more expensive. And especially if your condition leaves you unable to work, your bills might bankrupt you.
> when we don't actually foresee needing anything but emergency hospital treatment for unexpected accidents
Life is inherently unpredictable. Things happen to you that you can't foresee.
https://www.healthcare.gov/choose-a-plan/catastrophic-health...
It sounds like some states may be allowed to expand the permissible kinds of less-comprehensive plans in the future under the TCJA. If that can and does happen in your state, you might have more cheaper options in the future that are closer to catastrophic plans but perhaps available to more people.
The insurance card is your access ticket to urgent but non-emergency medical care.
