Insurance, beyond insuring you, does something perhaps more important: they negotiate massive discounts with all medical practices/hospitals/etc. My insurer negotiated that to something reasonable (approx $35k, though memory fails me); I could even afford that if I needed to. Crucially (and I understand this is fucking stupid; go 'murica), uninsured people pay way more than insured people even including what the insurance pays. Like integer multiples greater than 3 and up to 20 times more.
Or maybe even real multiples. :)
A minor but important correction is they are billed way more, not necessarily pay way more.
For example I dated a girl who just out of high school with no insurance had a really badly broken arm (car accident IIRC) and the hospital "charged" her, in total, $100K+ as an imaginary amount, complained at her for awhile, and then they wrote her off after some token payment (more than they would have gotten in bankruptcy, less than it would have cost her in legal fees to file bankruptcy, but a moderately huge amount of money at part time minimum wage income).
Now whats important is the difference between the imaginary retail price of $100K and what it actually cost to provide services is incredibly valuable from an accounting standpoint. Also from a marketing standpoint her "$100K" of services was donated by a gracious company to the poor, they sure as heck don't publicize the actual cost of providing that service was only $10K even including minor surgery and recuperation. They did a good job, by the time I met her, I had no idea her arm had been so ruined just a year or two ago until she told me and showed me her arm, by no means did they cheap out on her care or recovery just because she was uninsured.
Finally the hope is that if they charged that poor girl a fair $10K then it would be hanging over her head for years until she could pay it off or more likely bankruptcy filing fees costing less than $10K they'd get nothing at all, but if they "charge" $100K then they might jackpot and she could qualify for some govt grant or fundraiser or whatever. If they know she's going to declare bankruptcy no matter what they charge and they're going to get $0 revenue, then game theory shows they should ask for $100M on the off chance by a miracle she wins the lottery, or qualifies from some weird govt grant or school support fund or something.
I think something foreigners often don't understand is we charge poor people $100K for a broken arm but we only charge them like $2K to file bankruptcy, so there are no acute medical problems that cost more than $2K, and for chronic problems they make life hell until either the chronic problem goes away and so do the bankruptcy bills, or the victim dies, but its not really expensive. The business model ruins middle class aspirations (how will I have the vacation home and RV if I file bankruptcy?) but we solved that problem by shipping off all the middle clss jobs to China, not having a middle class means not having to worry about a middle class anymore, there's just really rich people and peasants who own nothing.
1. Bankruptcy can only be filed once every 7 years. What happens if there are medical complications and you are re-hospitalized after you filed for bankruptcy? Answer: You are screwed.
2. It's usually far cheaper and less hassle to purchase an ACA policy to prevent being presented with these large bills in the first place.
First: hospitals are required by law to stabilize you regardless of your ability to pay. Stabilize. They are not required to treat you beyond getting you to the point you won't die on your way out of the ER.
Second: many of the better medical practices, UCSF Ortho for example, will not treat you if you don't have insurance.
Third: bankruptcy is not quite as straightforward as you make it sound, and if you have any assets, you may well lose them. You can have $10 or $20k and still find a $100k surgery very expensive. For example, in CA, you can only protect $3k or $5k, depending, of value in your car during bankruptcy. And there isn't a $3k or $5k car in the US worth a damn.
The procedure itself, plus the related office appointments and tests, was around $50,000 (after insurance discounts). That included separate bills from the surgery center, the hospital (I was admitted overnight), the cardiologist, and the anesthesiologist.
That's for a one-off problem that is now corrected. If it were cancer, or something else that required ongoing treatment, costs rise rapidly.
* To the degree that any medical issue can be minor; my life was never in danger and risk permanent disability was low.
The market for private insurance is somewhat better now with Obamacare (depending heavily upon the state you live in) but it still can be very expensive. Especially if you're unemployed.
If you have a family member in poor health, employer-sponsored health coverage can be worth an order of magnitude more than your cash salary. If not more.
Many providers, including public providers, are exceptionally reluctant to see uninsured patients. If push comes to shove they cannot outright refuse, but they can be highly disinclined.
Insurance isn't just "we cover your bills", but "we negotiate rates with providers". Much healthcare billing is basically funny money. Or more specifically, there are huge fixed costs, but charges are based on specific services billed (HMOs excepted, though internally they likely operate somewhat similarly), so that what in a tremendous number of cases, the healthcare provider cannot tell you, as a private individual, what you'd be billed for treatment. But some hospital procedure or stay can billed entirely differently depending on who paying, with hugely varying rates.
And, since the uninsured has zero effective bargaining leverage (health plans can threaten to drop a provider or apply other leverage), they get the highest rates.
On top of all this, billing is tremendously disaggregated. You might see charges for facility, individual supplies, labs, transport, and individual medical personnel who charge independently. Many (if not most) doctors aren't employees of a hospital, but are independent service providers who charge separately.
It's a mess.
And a distressingly ineffective one. There's been very little real improvement in health outcomes since the 1950s (and for quite some time they got worse). Much of the improvement can be chalked up to improved environmental and lifestyle factors (removing lead from paint and gasoline, asbestos, less smoking and drinking). It's been improved health outcomes for the poor and minorities which account for much of the life expectancy gains as well. Earlier improvements largely came from public health measures: fresh, clean drinking water, sewerage systems, municipal waste removal, and quarantines for infectious disease. Even vaccinations and antibiotics were relatively late and minor interventions by comparison.
Example: I needed a sinoplasty/septoplasty. The procedure was $26k if I was uninsured. My insurance company had negotiated the procedure to $4k. I owed 10% of the procedure cost at $400. This is for a minor outpatient procedure. So, losing insurance means paying 6500% more for healthcare in this case.