This is one of the big questions I hear these days that scares a lot of people away from going out on their own into the arena Contracting or Consulting, and that is just a sad commentary on how the broken the medical insurance system is in this country, that it is a factor in making the decision of whether or not to go into business for yourself.

Basically there are a couple different answers depending on your personal and family situation. For the younger healthier single crowd, there is one answer, and for everyone else there is a 2nd answer that has more variables in play and thus is a more difficult decision.

If you are younger, still in your 20's, and single, then you are typically healthy and medical insurance isn't really too much of a thought or concern, but I would recommend in anyhow, but you can structure it differently.

You can buy insurance for it's intended purpose, as an insurance policy against the unexpected, not as a fund to pay for all your everyday medical expenses like it has become for most Americans these days.

Here is an analogy that I like to use. When you have insurance for your car, that is to be used when you are in an accident. You would never expect to file a claim with your insurance company to pay to have routine maintenance, like replacing the tires or a 30,000 mile checkup or changing the oil.

Your automobile insurance company would just laugh if they received a claim like that, but for some reason medical insurance in this country has become just that; all encompassing for every conceivable medical expense, and that is why it has become so outrageously expensive.

I believe that since you are young and healthy, you are much better off saving significantly on premiums and going with a high deductible, catastrophic plan and then self insuring for the small stuff like the annual checkups or when you have a cold. That way you keep insurance for an accident or major medical condition like it was intended. In those years where you don't have any issues and don't use the coverage, you will save a ton of money on premiums, which you can put aside into an account like an HSA (Healthcare Savings Account) which I will discuss in a future article, for the years when you do end up needing to use the insurance for a major occurrence.

For those of us that no longer fit into the single and healthy crowd, then it is a bit more complicated and I will discuss that in a future post. What are your thoughts on the subject? I'd love to hear about your experiences.

By Paul Monax

Independent Contracting Resources
http://www.IndependentContractingResources.com/