DO YOU NEED A MEDICAL HEALTH INSURANCE? YES, YOU DO

Holy Crap!

Another year and it’s already time to renew my medical health insurance 😥

“Do you ever have the feeling to pay for something that you never use?”

Well, medical health insurance is that thing for me. Health insurance is the 800-pound GORILLA in the room for decisions like this.

Many people don’t want to leave their jobs and adventure in business because of their medical health insurance.

That’s insane!

The reason is simple; COST.

This post explains why I’m going to discontinue my medical health insurance until I’ll be 50 years old, and the reasons why you shouldn’t follow my steps. 

The main point of this article is; “Do I need a medical health insurance? Or… I might of better to invest this money to accumulate personal wealth?”

It might sound the opposite of what you would expect, but the fact is that each decision is the result of different circumstances, financial position and risk tolerance. Therefore, weighting your odds while calculating what is at stake will help you to make the right decision.

And while my decision process might offer you a reason to follow my health insurance advice, this information alone shouldn’t qualify me as someone to follow.

I could be a risk taker. Maybe there is a better way. Or… what if I’m just over optimistic?

Before jumping into my solution, let’s talk about how I reach this breaking point in deciding if keep my health insurance or let it go.

“To be, or not to be… insured”

During my employment years, I had FREE health insurance from my employer. I never cared much for as I was in my 20s, single, strong, healthy and my last worry was to visit a hospital.

In fact, I never had to.

However, with my early retirement at 31, no more FREE medical health insurance. Not only that but I’ve got a family to look after.

No need to say that going from pay 0 to US$3.700 per year is frustrating. The problem in getting insured is the feeling of “gambling”.

It’s like going for a trip to Las Vegas to play in the casino. You drop few thousands of dollars with the hope to win the Jackpot. Instead, with health insurance you drop few thousand of dollars with the hope never need it.

So weird.

And so, the natural question is:

DO I NEED A HEALTH MEDICAL INSURANCE?

The first year of insurance’s premium as a single male in his 30s, I had to pay a mere US$500 per year. No brainer decision. Right?

The next year I married, so I enroll my wife and the premium skyrocket to US$1.200 per year. Dammit! But it was still a good value in my opinion. It’s a mere US$100 per month or a good meal in a restaurant.

Guess what?

This year I’ve got my first baby, so my wife suggests to enroll her too. I contacted my insurance broker in Hong Kong asking for few quotations. I was outraged when I was slapped with a US$3,700 quote.

One question pop up in my mind; “Do I need to pay for medical health insurance?”

Just giving away money doesn’t make much sense. I would rather prefer to invest the money instead of giving away to the insurance company which profit by investing, anyway.

That’s the reason why Warren Buffett loves to buy insurance companies.

Whenever I visit the hospital for a minor issue, like last year when I got diagnosed “Dengue Fever,” I pay the money out of my pocket.

My health insurance has a deductible of US$600 which makes the premium much cheaper. The first US$600 bill for any medical treatment is paid by me, the rest will be paid by the insurance company.

In other words;

In an insurance policy, the deductible is the amount of expenses that must be paid out of pocket before an insurer will pay any expenses. In general usage, the term deductible may be used to describe one of several types of clauses that are used by insurance companies as a threshold for policy payments.

If I opted for no deductible, the premium was around US$3.500 for full cover, which I’m glad I never took.

Now going into my fourth year of private medical health insurance without knowing;

1. What is the probability that I, my wife and my new baby girl would get hospitalized for a critical condition?
2. And what would be the potential financial burden when a condition happen?

I consider severe conditions:

• Cancer
• Tumor
• Need of operation after an accident
• Medical emergency (be in the hospital within 3 days or… Bye Bye
• Life treating disease
• Being run over by a bull while visiting Spain 🙂

To make an informed decision, you need to know the odds and what is at stake.

Our entire lives are governed by decisions that have a statistical quality, although we make these choices for the most part without consciously weighing the odds or even being aware that such a decision is being made.

Vicky is an expert in smart decisions. She does a great job in explaining in simple steps how to maximize satisfaction by reducing regrets.

Having an extra US$3.700 in the pocket helps in satisfying your need for that dream holiday to the Bahamas. Having said that, regretting your decision don’t buy a medical insurance after a car accident, might put your finances under stress.

Also, the stake is high in making a decision in getting a medical insurance; YOUR HEALTH.

So, we don’t think about the odds, or alternative ways or how the insurance company profit from all this. We just pay the insurance premium year after year, hoping never need to use it.

But we never think about the odds of an event to occur, in this case, get ill or have an accident.

The lottery isn’t much different from buy medical insurance, you have got a high stake with low odds.

How many people do you know who has won the lottery?

Probably none.

However, sometimes the odds can be deceiving by the way we collect the information.

MY DAD GOT RUN OVER BY A MOTORBIKE
Unlucky But Lucky

The story of my father while traveling for the seventh time to Asia, it’s an eye opener to odds and information in making a decision.

Spending US$350 over 3 years in travel insurance but avoiding a US$12.000 hospital’s bill, it’s been a great investment.

Two-time per year, my father go on holiday to Asia and for the most time, he spends time with me. Usually, one or two months each trip. I buy for him a travel insurance regularly which cost US$50 each trip.

In the first six trips, nothing has happened, so I blow US$300.

Unfortunately, in the seventh trip, he got run over by a motorbike and rushed to the hospital with a skull’s fraction and an injured shoulder. He got treated in the best hospital available and the insurance paid in full for his hospitalization. Total bill, about US$12.000.

It’s natural to pose questions about the probability of the occurrence.

Few facts to consider:

• My father in the last 30 years never had an accident.
• Two/thirds of the year he spends in Italy.
• He is 61 years old; the older, the riskier.
• Yearly check-ups.
• No smoking, good habits with food and regular exercise.

When considering the facts above, the likely to occur a medical emergency abroad is minimal compared to an occurrence in my father’s homeland.

Furthermore, because my dad undergoes yearly check ups and get vaccine regularly, it’s safe to assume he will not need a hospital while on holiday.

“But, what about accidents?”

Good question, Pal.

My father for 30 years never had an accident, which suggests the unlikely odds to have an accident while traveling too.

However, the above facts don’t take into consideration third party factors, such risk by visiting a second world country.

“Should we look into my dad’s accident, should we?”

My father drove a bicycle thinking the local people would respect the same road rules as in Italy. Wrong!

Different circustances, unforeseen events.

These unexpected factors are hard to be foreseen and are a risk to our daily life.

I can conclude, even if I and you have an excellent health, we are in our thirties, and the facts are clearly in our favors, the “unknown” external factors are still an unforeseen probability we need medical a medical health insurance before our 50s.

Over 50 years of age, it’s a no-brainer to get an insurance to cover your wealth, but keep in mind the premiums are going to be expensive.

In my father case, having a travel insurance is been worth it.

I can pay the travel insurance for the next 240 trips before break even, assuming a 0% inflation rate which is a wrong assumption. But it’s easy to calculate without making this article too scientific.

So, US$ 12.000/US$50 = 240 times. Which is a cover for 120 years, considering my dad travel twice a year.

What about medical health insurance?

Here the matter gets more complicated than a simple travel insurance.

You see, travel insurance cover mainly accidents instead health medical insurance cover accidents+illnees. 

I did some research to get an idea about costs of treatments better, so we can determine the potential financial loss in the case we need medical assistance.

According to Forbes, this is the cost for the common medical condition in the US.

I’m facing the dilemma to pay US$3.700 premium this year with an increase of 8% yearly (average cost increase for medical policy) until I will be 50 years old.

I choose 50 because the like hood of contracting a medical problem before this age is low. Instead, after the 50s is certain that my partner and I will visit the hospital PERIODICALLY.

I calculate by the age of 50, I would have paid a total insurance premium of US$118.125 for 16 years of health policy.

If my family or I never get hospitalize, the insurance will pocket all the money, but what if we get sick?

Well, one cancer treatment would be enough to cover the investment but the likelihood to contract cancer before 50 is very low.

Stroke? No way.

Artery disease? We don’t eat fat food as we prefer a light diet.

Renal disease is usually reserved for people about 50s.

I can’t forsee much of a reason why I should get a health insurance, considering I can cover the treatment’s cost with my savings.

Also, giving away my money for the promise to receive in the future a benefit, doesn’t reason well with me. So many good companies go bankrupt or get caught in some scandal. Insurance companies aren’t money proof.

I prefer to save that money, invest so I can growth my personal wealth.

This is my personal case, and if you feel confident with your financial position, I recommend to follow my steps.

THE REASONS YOU NEED A MEDICAL HEALTH INSURANCE

Each situation is different. I can attest the benefit of having a medical health insurance which I had for the last 10 years.

So, in which cases do you need health insurance?

1# YOU ARE ON YOUR OWN

You need saving to pay your regular bills plus to pay the hospital. If your savings are below US$100.000, a medical health insurance will take most of the burden away from you.

Your family and friends will always be there. But they might not be able to give you money, for now, the only person you can rely on is yourself.

2# YOU DON’T HAVE A CREDIT CARD

The first thing a hospital ask you when you don’t have a medical health insurance is the credit card. Make sure to have one of the two.

3# YOU LOVE TAKE RISKS

You are an extreme sports fanatic, or you might like car racing, whether you do things which might increase the chances of an accident, you better be insured.

Most of my friends playing football, had some kind of hospitalization. My neighbor loves to experiment with motorbikes and take it to the street for racing. Guess how many times he has been in the hospital.

4# FAMILY TREE WITH GENETIC DISORDERS

My dad had 3 tumors in 10 years. His sister had one and the mother one as well. So, because tumors are genetic disorders, there is a high probability that will get a tumor in my life.

Do you have any family members with genetic disorders? if yes, you are likelihood to develop the condition.

Investigate, and if so, make sure reading your health insurance policy and be covered.

5# YOUR LIFE IS STRESSFUL

It’s no secret that stress is the cause for most health problems. Stress is a silent disease which can’t be seen.

I include this because I have been a victim. In the last two years of my chef career, I develop a form of depression which I wasn’t aware of having.

I felt always tired, but I thought the reason was the long working hours.

That wasn’t the case . I was depressed.

The interesting part is that I never saw a doctor or cure it with any medication. Happy about that.

Sound crazy to tell you this but after my daughter was born, I felt a spark in my body which open my eyes to a new future.

I think, my form of depression was triggered by losing motivation with my chef’s job and unnecessary pressure I put in my life.

I was fortunate, but I saw other people with this terrible disease which need constant medication. It’s expensive.

Stress can affect any part of your body such stomach, increase blood pressure just to name a few.

If you are an executive or super busy business man, get covered with a top notch medical insurance.

CONCLUSION

I hope this article is going to help you to make the right decision about getting a medical health insurance. I can’t answer this question straight as your needs and situation is totally different than mine.

I clearly outline my thinking process on this decision, and show you how I’m evaluating the need for a health insurance.

Got a question? Something to add? Let’s chat in the comments section down below!

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