Since time began, mankind has found safety in numbers health insurance coverage is no different when you sign up for coverage, you join a group of other people to combine your health care purchasing power.
Your insurer covers the whole group rather than individuals, so everyone shares the cost of staying healthy, it’s like an auto insurance company that collects premium payments from its customers, then uses that pool of money to pay accident claims.
Gary takes care of himself and he’s a healthy man, but it’s his first time skiing moments after stepping off the lift. He plummets down the wrong slope and hits a tree, then five more trees, then he slides over the edge of a small cliff and is promptly hit by a falling safe, just then his wife calls to inform him that she’s about to deliver twins.
Gary is about to be buried under snow, because costly medical events like these, even happy ones can be expensive without health insurance. His broken leg and concussion can cost thousands to treat, depending on the circumstances. The birth of his twins could cost anywhere from a few thousand to a hundred thousand or more.
Fortunately, Gary has health insurance. Gary’s share of the cost to treat his injuries and deliver his kids will be a lot less, because his insurer is betting that the money the group pays in will offset the total costs of their health expenditures for the year.
In a sense, the healthy people in the group help pay the costs when someone is sick or injured, knowing that the same help will be there when they need it. So instead of paying thousands of dollars, Gary’s out-of-pocket costs are minimal, he’s only responsible for his copay and his deductible, which vary by insurer.
Sum it up, health coverage pays for preventive care and reduces your risk of financial disaster, because your health care costs are spread across a large group of people.