Weighing the Risks of Going without Health Insurance - Essay Example

In general, Bernard’s argument is agreeable except that present health insurance costs too much to cover the potential health risk.
Let us consider the argument of her numbers and follow her train of the argument of comparing cost with benefit. For simplicity, let us take the person she mentioned in her article who is 25 to 34 years old (insured or not), who has 5 percent of incurring medical bills of at least $27,000 in 2011 according to the Kaiser Family Foundation. The same source revealed that the chance of getting a medical bill that exceeds $13,000 was 10 percent.

Now let us compare it with a typical medical insurance coverage cost to determine if cost corresponds to protection. We could use the typical silver plan coverage which Bernard used in her article. In this plan, a young person nearly in the category of 25 to 30 years old (28 to 30 years old in her article) would incur a cost of an annual premium of $2,800, and in New York City that could be $4,600. This insurance cost is supposed to protect an individual from the 5% probability of incurring at least a $27,000 medical bill and the 10% probability of incurring medical costs of more than $13,000. Now let us compare the cost of the premium versus the probable benefit or coverage. $2,800 premium is around 10% (rounded to for simplicity) of $27,000 and 16% for the same coverage if one is living in New York City. The problem here is that there is only a probability of 5% that such risk will happen or %10 for a $13,000 medical bill. The cost is more than double compared to the corresponding risk it is supposed to cover.

Considering these figures, the question redounds to Will it is worth the risk?” $2,800 or $4,800 (depending on where you are living) for a 5% probability of incurring a $27,000 bill and a 10% probability of incurring a $13,000 medical bill or in short, paying 10% of the potential risk ($27,000 medical bill) with a 5% probability to happen. Inferring in these figures, the cost for the risk seems to be a lot because it redounds to paying 10% of the cost of the risk that could happen 5% of the time. The odds here are in favor of the insurer or underwriter. And the cost of the premium is also likely to increase because there are co-pays, deductibles, and other associated costs which would add to the 10% that would only cover a 5% risk to age 28-35 Americans. Read More