The "Break-Even" Analysis
Unlike car insurance (where you hope never to use it), health insurance is usage-based. You will go to the dentist. You will likely need antibiotics at some point.
The question is: Do the benefits outweigh the premiums?
Who Needs It?
1. The Self-Employed
You don't have an employer paying for your benefits. Not only does insurance cover your costs, but self-employed individuals may be able to deduct the premiums as a business expense (talk to your accountant).
2. Retirees
When you retire, you often lose your company benefits. As we age, our medical costs generally increase. Securing a plan immediately after retirement (via a Conversion Plan) ensures you aren't left vulnerable to high drug costs later.
3. Families with Kids
Children need frequent dental checkups, potentially braces, and glasses. A family plan spreads the risk and cost across multiple members.
Who Might Not Need It?
If you are single, young, highly healthy, and have no prescription needs, the math might not work.
- Scenario: Premium is $100/month ($1,200/year). Your only expense is two teeth cleanings ($400/year).
- Verdict: You might be better off putting that $100/month into a "Health Savings Account" for yourself. However, you risk not having coverage if a sudden expensive diagnosis arises.