Late Stage Capitalism

So, how come people don’t just skip insurance?

Like so many other things in life, the answer is: It's complicated. But also, a great many people DO skip health insurance.

Is there some stupid law that forces you to have insurance?

Not on a national/federal level, no.

Or is insurance somehow cheaper?

The answer here is very complicated and literally varies from person to person and also how you define "cheaper". Overall, the answer is no.

On average, health insurance is not cheaper when you consider the total cost of the plans. These are for-profit companies, many/most are incredibly profitable with high margins of profit, which by definition means they make more on the the plans than they pay out. For that to happen, it means they cost more than they pay out (aka not cheaper).

On an individual basis, however, the equation can go either way. For some people and for some years, a person can come out ahead by having health insurance in the sense that the cost of the plan + the out-of-pocket cost of treatments is less than the out-of-pocket expenses they would have paid if they were not insured. Usually this is because the person has a lot of health issues, had a child that year, was diagnosed with cancer, and things like that.

Another aspect of the equation is that employer sponsored health insurance is nearly always less expensive than getting private insurance on your own for comparable plans. The health insurance companies give employers special group discounts on plans, as a starter. In addition, most employers subsidize some amount of the cost of the plans, so that the employees aren't directly paying the full price. Obviously that gets nebulous pretty quickly so I'm not going to dig too much into the weeds here, but wanted to mention this. On a surface level, this means an employee might pay $200 for their insurance plan, employer might pay $500, and a comparable plan on the open market would be $1,000 (but the group discount means that the insurance company is only charging the employer $700 for it).

Additionally, health insurance is a hedge against catastrophic health issues like cancer, because they typically have a cap on how much a person is expected to pay each year for medical treatment (aka max out of pocket). So, even if it doesn't strictly save you money, it gives you a reasonably accurate maximum bound on how much you'll have to pay that year.

Another consideration for health insurance is that it acts as a "get in the door" card for some amount of health care. Outside of emergency care, most everything else has an upfront cost, and if you don't have that money, you don't get treatment. With insurance, that upfront cost is typically a fixed copay (like $50 to see a doctor). Without insurance, most/many doctors will require you to pay in full upfront before you get seen (so like $350). In the USA, that difference in cost between a copay and full price is the difference between getting treatment or not even if the overall picture is that insurance is more expensive.

My medication will cost $1000 a month without it. When I was sick with something else I would have paid $700 a pill I had to take every day for a month.