This may seem like an obvious answer, but it is a question that is actually posed by customers on a regular basis. When most people think of health insurance, they think of doctor co-pays, prescriptions, and the like. But the fact is, that’s only a fraction of what it means to be insured. True medical insurance is designed to provide coverage in the event of a major medical incident, i.e. a heart attack, cancer, or major accident. Though each person’s probability of suffering such an incident in any given year is relatively small, the potential financial loss can be devastating for all but the wealthiest citizens.

But I’m in good health, so why do I need to worry about this?

This is also a common response to the suggestion of major medical coverage. The fact is, the premiums paid are already calculated based on a healthy person’s risk. In other words, the price you’re paying already takes into account your relatively good health. A person in poor health would have to pay prohibitively high premiums to cover their risk. For example see the premiums offered through the Texas Risk Pool. As you can see, the rates healthy people pay are a bargain in comparison.

If I opt for major medical coverage only, then I’m just paying in, and not getting anything back in return, right?

This could not be further from the truth. As mentioned above, only a portion of a typical co-pay plan’s premium goes to pay for the doctor visits and prescription coverage. The majority goes towards major medical coverage. You can opt to include co-pays on your plan, but the cost will be substantially higher, and for most people, not worth the extra premium. Co-pays are typically only an efficient option for families with children, or young people, who can’t afford the out-of-pocket expense for a doctor visit. The premiums paid for major medical insurance are used to cover losses incurred by all the policyholders in your area. In addition, your major medical policy entitles you to free preventive care (such as physicals including blood work, colonoscopies, mammograms, pap smears, and child well checks including immunizations) that would otherwise cost hundreds of dollars.