I'm Young & Healthy . . . Do I Really Need Health Insurance?

Essentially, health insurance "insures against the loss associated with a decline in health" (CTU Online, 2006, Presentation, Insurance section). Health insurance comes in a variety of forms and from different places. Your health insurance choices often depend on how you receive your policy. Many people receive health coverage through their employer. However, since the employer shares the cost of these benefits, he or she may only give employees a few health insurance options to choose from. On the other hand, if an individual decides to purchase health insurance on his or her own, there are many more options available (Keown, 2007, p. 292).

Most health insurance policies have a combination of three different types of coverage: "hospital, surgical, and physician expense insurance" (Keown, 2007, p. 292). And depending upon the specific policy, the individual may be able to choose from a variety of other policy options, such as insurance for dental, optical, and accident expenses, at an additional cost. Furthermore, health insurance plans come in two basic forms: (1) fee-for-service (traditional indemnity) or (2) managed health care (prepaid care). Fee-for-service health insurance plans typically allow some freedom with choosing hospitals and doctors and reimburse a fraction (sometimes all) of the money you spend on medical expenses. Managed health care plans, in contrast, normally only allow people to choose from a list of hospitals and doctors, while providing upfront coverage with little need for reimbursements (Keown, 2007, p. 292-295). Finally, health insurance is also offered through the government (i.e., Medicare, Medicaid, and Workers' Compensation) for qualified individuals (Keown, 2007, p. 299-302).

Consequences of Not Having Health Insurance

It was estimated that over 46 million Americans did not have any health insurance in 2007 (Appleby, 2007, Introduction para. 4). Unfortunately, many of these uninsured people have come face to face with the true importance of health insurance. Unexpected illnesses or accidents can easily create medical bills that mount to several thousand dollars or more, bringing an individual or family monstrous money problems that can lead to financial ruin. Also, no health insurance often means a person will not seek the regular medical attention he or she needs to address chronic conditions (Appleby, 2007). Consequently, the Institute of Medicine believes "that 18,000 people in the USA die each year because they lack insurance" (Appleby, 2007, Introduction para. 7). Since no one is immune to serious accidents or illnesses and diseases, every American should have a health insurance policy that meets their own specific needs (Appleby, 2007; Insurance Information Institute, n.d.).

References:

Appleby, J. (2007, March 14). Who's uninsured in 2007? It's more than just the poor. USA TODAY. Retrieved June 9, 2008, from http://www.usatoday.com/money/perfi/insurance/2007-03-14-uninsured-usat_N.htm

CTU Online. (2006). Phase 3 course materials. Retrieved May 25, 2008, from Colorado Technical University Online, PFP110-0802B-05: Personal Finance Concepts: https://campus.ctuonline.edu

Insurance Information Institute. (n.d.). Insurance tools: Life stages. Retrieved June 9, 2008, from http://www.iii.org/static/site/tools /life_stages_frset.htm

Keown, A. J. (2007). Personal finance (4^th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.