Am I Crazy for Not Paying for Health Insurance?

I'm retired so I don't get health insurance from my employer, and my income precludes ACA subsidy. If I want health insurance, I'll have to pay the full amount out of pocket. I decided it wasn't worth it. Here's my reasoning.

First, we know that the aggregate cost of health insurance exceeds the aggregate cost of health care for the population as a whole. This must be true or health insurance companies would all go bankrupt. Not only do health insurance companies need to charge enough to pay for all the healthcare costs of their customers, they have to charge an additional amount to pay for all their own overhead costs (employees, facilities, etc.). And, on top of that, they have to make a profit for their shareholders.

Which means that the cost of health insurance for the "average" individual exceeds the value of their health care over their lifetime. By average I mean a person whose healthcare costs are equal to the total healthcare costs of the nation divided by the population.

Furthermore, most people require less than the "average" amount of healthcare. A small percentage of people, through no fault of their own, require a lot of ongoing, expensive healthcare, whereas most people require a relatively smaller amount. ("Median" individual healthcare cost is less than "average.") Being a person of at least "average" health, I can therefore reasonably expect my total lifetime healthcare costs to be less than "average." And, more importantly, I can reasonably expect my total lifetime health care costs to be less–probably far less–than a lifetime of health insurance costs. There's no reason to expect that health insurance will save me money over the long term; on the contrary, it will almost certainly cost me. A lot.

Also, it turns out that something like 2/3 to 3/4 of our total healthcare costs are spent on people in their last year or two of life. So if I'm willing to forego my last year or two of life (the quality of which is likely to be poor anyway), my lifetime healthcare costs will be reduced by a significant amount, thereby further increasing the gap between my expected health care costs and potential health insurance costs.

I should point out that I have enough savings to cover sudden, unexpected, significant healthcare costs. Which is what "insurance" is actually supposed to do: cover sudden, unexpected, significant healthcare costs.

So, given that I'm in good health, have the wherewhithal to cover unexpected healthcare costs, and am willing to forego my last year or two of life, am I foolish for not paying for health insurance?

submitted by /u/Mr_Deltoid
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