What is the main purpose of health insurance?

The main purpose of health insurance is to mitigate the financial impact of healthcare expenses on individuals. Health insurance is designed to help protect individuals from significant medical costs that can arise from injuries, illnesses, and ongoing healthcare needs. By pooling resources from a large group of insured individuals, health insurance provides a safety net that reduces the financial burden on any single individual when they require medical care.

This is particularly important because healthcare costs can be unpredictable and often quite high, especially for major medical events. With health insurance, individuals have the assurance that they will not face overwhelming expenses during critical times, as the insurance plan assists in covering a significant portion of medical bills and other healthcare-related expenses.

While coverage for preventive services is an important aspect of many plans, health insurance overall encompasses a much broader scope, including hospitalization, surgeries, prescription medications, and specialized treatments. Therefore, focusing solely on preventive care does not capture the complete purpose of health insurance.

Additionally, while discount programs may assist in reducing costs, they do not equate to the comprehensive risk-sharing and coverage structure that health insurance provides. The essence of health insurance lies in its role as a financial safeguard against unexpected health-related expenses.