Two years ago, my wife and I had our first child. We are both self-employed and buy policies through the individual market. We specifically chose not to buy pregnancy coverage, although coverage for "complications of pregnancy" were standard with our Assurant Health policy.

The reason we didn't want to buy coverage for a normal pregnancy is the same reason everyone should have that choice -- a normal pregnancy is not an "insurable event." An insurable event is defined as something that occurs without warning, is unlikely to occur, and is unwanted.

Consumers understand this concept well in every situation except health insurance. We buy home insurance to pay for losses due to fire, hail storms, tornadoes or theft -- not to pay for repainting the family room or updating the kitchen. We buy auto insurance to pay for accidents, storm damage or vandalism -- not to pay for a new set of tires or an oil change.

Over the years, health insurance has moved away from the concept of insurance and become a complicated financing scheme for everything related to health. That's why it's so expensive.

Labels: Analysis, Insurance

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