A friend of the blog e-mailed me a question about short term plans and young invincibles:
At age 30, what conditions would, a) have a >~1% chance of occurring, b) will cost you >$25K OOP, and c) get covered under those shitty plans. Presumably a young, invinicible would want to know that.
As I read through, my former 30 yo self is saying, self, “why are you spending $150/mos?” The coverage is not worth a thing?
This is a damn good question. There are very few things that meet all criteria. Young adults who can pass underwriting are basically insuring against meteors.
I have one caveat, not all underwritten plans are inherently bad. Some are, some aren’t. Let’s assume that the rest of the answer is for someone on a non-scam underwritten plan that actually offers “decent” coverage where the pricing advantage is mostly based on excluding people highly likely to need services instead of excluding massive sections of services.
I can think of three immediate scenarios where a healthy late 20 something male could run up a $25,000 charge that would be covered under most underwritten plans.
In an odd way, I was a semi-professional athlete. I paid the mortgage on my house by refereeing and then I started to pay for day care for a child by refereeing as I ended my twenties and entered my thirties. I had my fair share of injuries: hip flexors, ankle sprains, and plantar fasciasitis were the injuries that slowed me down the most. I pushed myself hard but I pulled back when I had a soft tissue injury because I would rather lose a week or two of a season to rest and physical therapy than a season or two to surgery. Thankfully lots of things stretched and strained but nothing popped.
ACL’s popping was always a concern. I lucked out as an ACL replacement can easily cost between $20,000 to $50,000 without insurance. Things going pop in the knees is a risk for young invincibles. If it is done in an athletic compeition, some underwritten plans may exclude coverage but this is still a risk during snow shoveling.
Jamison Taillon, a starting pitcher for the Pittsburgh Pirates, missed a good chunk of last year because he had testicular cancer. He is 25. Testicular cancer is fairly common for younger men. It is not a disease of old age.
Finally, and to be morbid, people get shot. It is not hard for the first day of emergency treatment to run up $30,000 in charges. Any rehabilitation or complications can push total charges into the six figures quickly.
These were the first three scenarios that I would have told my 29 year old self if I had to convince him to get insurance even if it was underwritten insurance with some exclusions. I am still mainly insuring myself against unknown meteors hitting me in the head, and those were three meteors that crossed my orbit.