What is a potential disadvantage if a 'waiting period' is present in a health insurance policy?

The presence of a 'waiting period' in a health insurance policy can lead to delayed access to coverage for certain medical services or treatments. During this waiting period, which is typically stipulated in the terms of the policy, the insured individual may not be able to claim benefits for specific conditions or treatments. This can be particularly concerning for those who require immediate medical attention or who are managing ongoing health issues, as the waiting period postpones the financial assistance that the insurance would provide.

In essence, while waiting periods can serve to mitigate moral hazard and prevent individuals from signing up for insurance only when they anticipate needing care, they also create a gap in coverage that could result in out-of-pocket expenses for the insured if they require treatment during that time. Understanding this aspect is crucial for individuals contemplating different health insurance policies, as it emphasizes the importance of reviewing the specific terms regarding waiting periods.