Obtain health insurance if you are self employed

Health insurance is one of the most controversial forms of insurance because of the conflict between the need for the insurance company to remain solvent versus the need of its customers to remain healthy, which many view as a basic human right. This conflict exists in a liberal healthcare system because of the unpredictability of how patients respond to medical treatment.

Suppose a large number of customers of a particular insurance company were to contract a rare disease costing 100 million dollars to fight for each patient. The insurance company would be faced with the choice of either charging all its future customers astronomical premiums (thus losing customers and going out of business), paying all claims without complaint (thus going out of business) or fighting the customers in an attempt to deny the costly treatment (thus outraging patients and their families, and becoming a target for lawsuits and legislation).

Today, most comprehensive private health insurance programs cover the cost of routine, preventative, and emergency health care procedures, and also most prescription drugs, but this was not always the case. Back in the late 19th century, early health insurance was actually disability insurance, in the sense that it covered only the cost of emergency care for catastrophic injuries that could (and often did) lead to a disability.

This artifact of history persisted right up to the start of the 21st century in some jurisdictions (like California), where all laws regulating health insurance actually referred to disability insurance. Patients were expected to pay all other health care costs out of their own pockets, under what is known as the fee-for-service business model. As the Industrial Revolution matured during the middle-to-late 20th century, traditional disability insurance evolved into modern health insurance as both employers and governments recognized the value of encouraging patients to seek regular checkups and preventative care from primary care physicians. It is usually much cheaper to treat diseases like cancer if they are diagnosed early.

Many countries have made the societal choice to avoid this important conflict by nationalizing the health industry so that doctors, nurses, and other medical workers become state employees, all funded by taxes; or setting up a national health insurance plan that all citizens pay into with tax or quasi-tax payments, and which pays private doctors for health care. These national health care systems also have their problems.

Some of these countries have citizen groups which protest bureaucracy and cost-cutting measures that unduly delay medical treatment. Similar issues exist with private health management insurances (HMO) in countries with privately funded medicine.

In the United States, health insurance is made more complicated by Federal Medicare/Medicaid programs, which have had the unintended consequence of determining the price of medical procedures. Many suspect that these prices are set independently of medical necessity or actual cost. A physician who refuses to accept a Medicare/Medicaid payment will be banned from accepting any such payments for a number of years, regardless of the reason for rejecting the payment or the amount offered. In either case, this means that private insurers have little incentive to pay more than the government does.