Let me preface my question by saying I hope that I can generate some factual replies and not launch into an endless debate. I really am looking for some genuine answers on what is admittedly, one of the hottest hot button topics.
Why does health insurance make any sense for consumers?
It seems to me that the vast majority of people – upwards of 95 percent – pay more out in premiums than they consume in health care. According to USA Today, the average cost of individual coverage was $4,824, and the average family plan $13,375. If you are relatively healthy, an annual physical and a few sick visits would only cost about 25% of what you actually pay. It makes more sense to pay out of pocket.
Of course, the reflex answer is that you need insurance in case of a catastrophic illness. But, as anyone who has actually experienced such a thing can tell you, insurance companies set limits (30-days of hospitilization, annual $ max, etc.) that only cover a small portion of the expenses in such circumstances. And if a catstrophic illness is going to force you into bankruptcy (60% of US bankruptcies are driven by medical bills, 75% of those people had insurance), it doesn’t really matter if insurance pays the first $100,000 of your $500,000 hospital bill… you are still going to lose all of your assets.
The only way that you can anticipate to break even, to get as much in services as you pay for, is if you have some sort of chronic condition. But again, the health insurance companies simply drop people with expensive ailments.
So help me to understand… as a consumer, how does it ever make sense to pay for health insurance?