It's great to hear somebody say "Break a Leg" if you're an actor about to start a performance. That's how people in the theatrical world have traditionally wished one another good luck. But what if you really did break a leg?

  • Who would pay for the costs related to your accident?
  • What might the cost be?
  • What could you do to reduce your personal financial liability?
  • What are the potential costs and benefits of medical insurance?
  • What are the trends in the cost of medical care in the United States?


In this lesson you will learn about the basic components and terminology of individual health insurance. You will make decisions about the value of insurance protection and you will identify trends in the cost of medical care in the United States.


Billy Boarddude was doing an "ollie" while next-door neighbor Homer Smith was walking his dog. Sadly, Homer didn't hear or see Billy in time to avoid the crash which broke Billy's leg.ollie

Billy called 911 from his cell phone and was taken to the ER at the local hospital. Five days later, Billy was released to return home. It would be six long weeks until he could "ollie" again.

Before leaving the hospital, Billy's Mom and Dad went to the hospital's business office to get their bill. In the car on their way home, they told Billy that he would have to give up the board and get a job to help his folks pay for the $20,000 bill.

If Billy's parents had no health insurance they would be liable for the whole amount, but for this lesson we will assume they did have insurance.

  1. Read the article Health care Costs are Up Here are The Culprits for a brief history of American health insurance and the major problems plaguing it. This should have been assigned the day before by your teacher as a lead in assignment to this lesson.
  2. You will need to know how health insurance works, To get started on that read How Major Medical Insurance Works and How Insurance Works . For a more refined look at how health insurance works using the North Dakota Blue Cross Blue Shield as an example.
  3. On this Break a Leg Worksheet there are several scenarios of different insurance policies Billy's parents could hold. Read each policy and calculate what Billy's parents financial responsibility would be with their $20,000 bill. To become familiar with the terms in these scenarios, check the definitions provided at the Health Insurance Glossary .

  4. From your calculations in the worksheet, what conclusions can you come up with regarding insurance policies? Do the readings and calculations make you feel less inclined to take risks? From our readings we find that someone always has to pay the full price for medical treatment. With that in mind, would practicing "risk aversion" be a good way to help keep the price of health insurance down?
  5. Now that you have some insight into the mechanics of insurance policies, read some information about the state of American health insurance today and how other people feel about it. For a list of American insurance facts, read Facts on Health Care Costs .

Lastly, what would health insurance cost for you? Visit the Health Insurance Center to receive quotes from many different insurance providers.


You should be able to answer the following questions, using information from the readings in this lesson:

  1. Should a family budget money for the purchase of an individual health insurance policy?
  2. What are co-payments?
  3. What are deductibles?
  4. What are covered expenses?
  5. What are claims?
  6. What are exclusions?
  7. What are premiums?
  8. Do U.S. consumers spend too much on health care and receive less benefit from those expenditures than we should?


Answer the following questions:

  1. What are three reasons for the extraordinarily high health care costs in the United States?
  2. What percentage of U.S. Gross Domestic Product (GDP) is devoted to health care?
  3. Why does the United States have a shortage of primary care physicians?
  4. How might that shortage contribute to inflation in the United States?
  5. Does the United States provide universal health care coverage for its citizens?
  6. Should the United States provide universal health care coverage for its citizens?
  7. What might have to happen to force change in United States Health care policy?