argument Tara Siegel Bernard’s article en d “Weighing the Risks of Going Without Health Insurance” is basically a cost-benefit analysis whether to get or not to get a health insurance. Her argument is grounded on the assumption that there is a corresponding cost to protection from medical bills which is economically sound and that without health insurance, people run the risk of not getting the needed health care when they needed the most. 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 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 as a 5 percent of incurring medical bills of at least $27,000 in 2011 according to 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 of at least $27,000 medical bill and the 10% probability of incurring medical cost 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 be worth the risk? ” $2,800 or $4,800 (depending on where you are living) for a 5% probability of incurring $27,000 bill and 10% probability for incurring $13,000 medical bill or in short, pay 10% of the potential risk ($27,000 medical bill) with a 5% probability to happen.
Inferring in this 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 cost which would add to the 10% that would only cover a 5% risk to age 28-35 Americans. Ideally, cost of risk should be equal to the risk. This inequality in cost and benefit of medical insurance coverage probably explains why the President is so bent on reforming the insurance industry and the reason why there are an estimated six million Americans who are projected to take the risk of not being insured. Conclusion Tara Siegel Bernard’s conclusion that a “10 percent risk is a meaningful possibility” is true but the cost is too much.
She concluded with a generalization and in the abstract without backing it up with the numbers she herself provided. The 10% chance of incurring more than $30,000 in medical bills is an over generalization because it included all Americans under 65 years old when she previously mentioned that Americans age 38-35 years old has only a 5% chance of incurring medical bill of $27,000.
She just added $5,000 without any basis of where she got the number and instantly, all the population in the study is already covered. In general, Tara Siegel Bernard’s article is grounded on sound economic basis except for her conclusion which made an inaccurate sweeping generalization of the risk and its corresponding cost. The risk of getting sick is real but the cost of the premium does not correspond to the extent of the risk.
Ideally, it should be lowered for the cost to equal the risk. At present, people pay 10% for a 5% risk which has a huge 50% imbalance. This explains why there are a lot of people opted out of a medical insurance if they are not covered by their employers because its cost does not justify the potential benefit. Bibliography Bernard, Tara Sigel. "Weighing the Risks of Going Without Health Insurance. " New York Times. http: //www. nytimes. com/2013/11/20/your-money/weighing-the-risks-of-going-without-health-insurance. html? _r=1& (accessed February 12, 2014).