Why You Need Health Insurance

Here are three things to consider regarding health care coverage:

Probability:

Unlike nearly every other product or service that you purchase, the rationale for obtaining health insurance is not necessarily to extract value from the service that you are purchasing, but rather to protect against low probability events.

No matter how stellar your current health condition, it is impossible for anyone to predict with clarity the likelihood of needing an expensive medical procedure at some point in the future.

Lack of Preventive Care:

Data indicates that uninsured individuals are more likely to experience health problems because of a lack of preventive care. When you are paying 100% of your own medical costs, there is a tendency to postpone various routine screening treatment, e.g. annual physicals, which can result in medical issues going undetected.

Note: You can argue that if you are self insured you are more likely to take care of yourself and seek help when there are early warning signs, but in practice this is rarely the case.

A Gap in Coverage:

Federal law in the United States considers someone who goes without health insurance for more than 63 days to have a “gap in coverage.” Consequently, insurance regulators allow insurance companies to discriminate against people who have had their health insurance coverage lapse.

If you sign up for a group health insurance policy with a new employer, the insurance company will have the right to exclude coverage of any pre-existing conditions for up to a year.

In addition, if you have been without health coverage for more than 63 days and apply for individual coverage, insurance companies may refuse to cover your pre-existing conditions, or may choose to not cover you at all!