Pam Etuglavu's Financial Advice

Do you really need health insurance?

Most people do need health insurance, not just for the unexpected, but to help defray the costs of preventative medicine. However, some people argue that they rarely get sick and the cost of insurance is too high for the amount of time they'll use the coverage. The health insurance question is only relevant in countries such as the US where health care isn't provided by the government. Some people are wealthy enough that they can afford to only have catastrophic coverage, it has a very high deductible but is relatively inexpensive to purchase.

For the majority of people, a routine illness can mean a round of doctor visits that wouldn't be covered by catastrophic insurance. Uninsured patients pay more for doctor visits than insured patients do, because doctors and hospitals offer lower contracted rates to insurance companies. An uninsured hospital stay can quickly erode a family's assets.

Some people say that they don't need insurance so they don't have anything to lose. Most hospitals do have emergency departments that are obligated to provide care, but they are not obligated to provide any follow-up care. Some people do not survive otherwise-treatable illnesses, all because of a lack of doctors and hospitals that are willing to accept uninsured patients. Many people end up having such high medical bills that they are forced to file for bankruptcy.

Present health is no indicator of future health; young people can and do contract life threatening diseases. Failing to get health insurance leaves your credit rating, future earnings and even your life at risk. At the very least, consider buying catastrophic coverage with the lowest possible deductible. Try to get insurance that covers doctor visits and preventive care.