Tuesday, November 18, 2008

I Won't Follow This Advice #4 - Uninsured by Choice

Occasionally, I read commercially published articles which provide advice very different to what I have found successful in my own experience. I will be highlighting these articles periodically in a "I Won't Follow This Advice" segment. These segments represent my opinion and one should consult a professional before making any decisions. Here's segment #4.

While the following article is not giving advice, I am including it to address the issues it shares. Uninsured by Choice? Are they nuts? states that 23% of eligible employees decline their employer's health insurance coverage because of the cost and choose to be uninsured. Most of the remaining 77% turn down health insurance due to being covered on a spouse's policy.

In the article, it seems that people marginalize the risk associated with not having health insurance. Some people rationalized the choice as between health insurance and savings. In another case, the person, who has been very healthy, felt his premiums would be subsidizing those with less healthy lifestyles. Being a healthy individual, I understand the dilemma with paying health insurance premiums and getting very little financial return. Throughout my life, I have rarely gone to the doctor, which could be interpreted as I was "wasting" my insurance premiums.

However, for me, the purpose of insurance is to provide the protection against wealth destruction, not provide a financial return. I realize that I am only one major accident (car, home or sports) or major sickness away from significant medical costs. For me, being uninsured is a risk I don't want to take. I hope to never have a major accident or sickness, but should it happen, the cost can be as high as our total savings, which would far exceed the amount of premiums paid.

Finally, being uninsured may create issues when health insurance is needed, since new policies may not cover pre-existing conditions. Thus, an illness that occurs when uninsured, may be excluded from coverage in future health insurance.

Choosing to decline my employer's insurance and being uninsured is not something I would do.

Here are other articles in the "I won't follow this advice" series:

#1 - Faking Incompetence
#2 - Spend Everything and Don't Save
#3 - High College Debt

For more on Ideas You Can Use, check back every Tuesday for a new segment.

Photo Credit: morgueFile.com, Clara Natoli

This is not financial or insurance advice. Please consult a professional advisor.

Copyright © 2008 Achievement Catalyst, LLC

1 comment:

forHealth said...

I chose to be uninsured, though it wasn't much of a choice. I begged insurance companies to take my money and they denied me. I could have gone to the high risk pool but that presented another type of choice. Live in poverty to pay that insurance premium or find some other way. The only choice I had was to put money away each month to pay for my own health care in cash. Honestly, it is less stressful than dealing with insurance bureaucrats and policies.

So many people look at the uninsured as selfish free loaders. Truth be told most can't pay the ever increasing insurance premiums. You look at insurance as wealth protection. I see the ROI as the green lining of the pockets of insurance CEO's.