You may already be familiar with the blog Zen Habits. It’s a very popular site with hundreds of thousands of readers. It’s written by Leo Babauta, who has authored numerous ebooks and paper books and has over a hundred thousand followers on Twitter (he’s following three people – all those followers he has are just interested in what he has to say). When he writes something, it gets read and shared and talked about. I’ve been reading – and enjoying – his site for a few years, and I usually find myself nodding in agreement with whatever he’s written.
But his most recent post threw me for a bit of a loop. He explains his rationale for not having health insurance for his family (he and his wife and six kids), and goes into a detailed description of how you, too, can make health insurance a bad bet.
I have no idea what his full financial situation looks like. He often writes about being a minimalist, so I know he’s not spending lots of money on material stuff. They do like to travel and recently spent several weeks in Europe – that doesn’t come cheap, but it’s a great experience for adults and children alike. He has a very successful blog and several books, so I have to imagine he’s not poor. And yet Leo Babauta considers going without health insurance to be a reasonable risk.
To be fair, I agree wholeheartedly with the tips he gives for “making health insurance a bad bet“. Things like eating well, exercising, avoiding excess alcohol, not smoking, driving safely, managing stress, safe sex, not sharing needles, etc. are all great ideas. They’re all things that our family does every day. I’ve been told I’m a health nut, and I don’t shy away from the accusation. I make green smoothies (kale and veggies and fruit all blended up – drink up!), exercise nearly every day and refuse to drive if I’ve had even a single glass of wine. I fully plan on living to be a hundred. But I would never ever go without health insurance for myself or my family.
I agree with Leo that it’s highly unlikely for people who take very good care of themselves to need significant medical care. In the last decade, our family has only had a handful of medical claims – mostly accident/injury related (lessons learned: mountain unicycling can be a dangerous activity, and doors can be rough on little fingers). Our babies were born at home and have never needed any care other than well-child visits and the one finger-in-door stitches event. Month in and month out, we pay our health insurance premiums and have no claims at all. When we do have a claim, it’s usually a well-child check, which is pretty inexpensive (and yes, it’s something that we could pay for out of pocket if we chose to go without health insurance, but even high deductible policies cover well-child care with no cost sharing).
Yet, I can’t imagine going without health insurance. Leo claims that my position is motivated simply by fear. I suppose that’s one way of looking at it, but I think it’s more accurate to say that we’re motivated by a desire to protect our family’s future against our own personal black swan events. Sure, it’s rare for a perfectly healthy person to suddenly need hundreds of thousands of dollars worth of medical care. But if it happens to you, it doesn’t matter how rare it is. Because without health insurance, you’re in a world of hurt.
My father is a good example. He was always exceptionally healthy. He never missed a day of work for illness in his entire career. No smoking, very little alcohol, plenty of exercise, a great diet – he did everything right. And yet, at the age of 54, he was diagnosed with Wegener’s Granulomatosis, a rare autoimmune disease. It destroyed his kidneys in the summer of 2001 and he was on dialysis for 11 years, until this past summer when he got a kidney transplant. It took several years to get the autoimmune disease to go into remission, and during that time he experienced numerous flares and a hospitalization that lasted three months (that hospital stay alone was half a million dollars). People with end stage renal failure are eligible for Medicare regardless of their age, but most people with Wegener’s Granulomatosis don’t have kidney failure. Instead, the disease usually attacks the respiratory system. I shudder to think of a person trying to tackle the bills that go along with such an illness, without the help of health insurance. My parents’ health insurance paid for the first couple years of my father’s treatments, and then once he switched to Medicare, his Medigap supplement helped to pick up the portion that wasn’t covered by Medicare. Without health insurance, my parents would have been bankrupted by now. And my father was in excellent health for 54 years prior to his diagnosis.
I know that my father’s situation is rare. I know that most people who are perfectly healthy and taking great care of themselves at 54 will still be healthy and in great shape well into their senior years, possibly still with little in the way of medical expenses. My mother is almost 67 and other than needing a brief hospital stay when she fell off the roof she was repairing a couple years ago and broke her femur, has had no medical bills other than preventive care in her entire life. When people are focused on health and wellness, I’m sure that my mother’s situation is more common than my father’s. But my father’s experience would have financially devastated our family if it hadn’t been for health insurance coverage.
Leo’s solutions for how he would deal with an expensive medical condition that could arise despite his best efforts include selling his website, creating a product to sell on his website (and asking for help from his vast community of readers), or going broke. I have no doubt that his website is a very valuable asset. But in terms of taking advice or emulating him when it comes to health insurance advice, most people don’t have an asset of that caliber that they could readily sell without leaving themselves homeless. I’m reminded of Rush Limbaugh casually noting that the cost of his medical treatment was “less than the price of a car” – as if that’s no big deal. To Rush, sure. To most people? Not so much. I’m also sure that Leo’s community of followers would happily band together to help him raise money if need be. Again, most of us don’t have that sort of social networking clout. And his last resort – “go broke and start again anew” – strikes me as selfish and a naive. First of all, “going broke” with regards to healthcare presumably means declaring bankruptcy in order to make the bills disappear. If you had the means to pay for health insurance and chose not to, it’s hard to see how that amounts to anything other than stealing. And it has real consequences for the hospitals that provide care to uninsured patients. And second of all, “going broke” doesn’t do much to help you get ongoing care if you – or your kids – end up in a situation where you need extensive care that isn’t considered an emergency. It’s true that an emergency room won’t leave you dying of a gunshot wound on their doorstep if you’re uninsured. But try getting multiple rounds of chemo or an organ transplant with no health insurance. It may be a pretty tough sell. Once you’re all the way impoverished you might qualify for Medicaid, but that depends on your state and eligibility can be a challenge for even very poor people.
To summarize and make a long story short: Although I agree that we should all do whatever we can to keep ourselves as healthy as possible, we can’t predict the future and we can’t know whether or not we’ll need expensive medical care despite our best efforts to avoid it. A freak illness or injury may be a very rare thing among people who make their health a priority. But if it does happen to you, it doesn’t matter how rare it is. Without health insurance, you may find that both your health and your finances are in pretty rough shape. We never recommend very low deductible “bells and whistles” health insurance. It’s possible and probably optimal to self insure the small stuff. Small stuff means things that you could readily pay for immediately or on a payment plan over a few years. But for most of us, expenses that start to get into six figures (or even five figures) would be a crushing blow. That’s what health insurance is for.