Yes, travel insurance is essential for a trip through Ushuaia, and doubly so if an Antarctic cruise is part of the plan. Ushuaia bills itself as the world's southernmost city and is Tierra del Fuego's main gateway, but its real significance for insurance purposes is as the embarkation point for expedition cruises crossing the Drake Passage toward Antarctica - a genuinely different risk category from anything else in Patagonia.
Ushuaia itself has reasonable hospital care for a city of its size, with more specialized treatment generally available in Buenos Aires, Argentina's capital and the country's main medical hub, a significant flight north. That distance matters far less, though, than what happens once a ship leaves port: once you are in Antarctic or Southern Ocean waters, there is no real medical infrastructure at all, and any serious case means a difficult, costly evacuation by ship diversion or helicopter, if one is even possible depending on conditions.
This is precisely why most Antarctic cruise operators require proof of adequate medical evacuation insurance with a genuinely high coverage limit before allowing anyone to board - a routine travel policy sized for a city trip is rarely enough. Confirm your policy explicitly names Antarctic or polar cruising and carries an evacuation limit that meets your specific operator's stated minimum, and check this well before final payment, since it can affect whether you are permitted to sail at all.
Patagonia's winter, roughly June through August, brings genuine cold, snow, and rougher Drake Passage conditions if you are traveling outside the main cruise season, which mostly runs during the austral summer. Keep any clinic paperwork, ship's medical log excerpts, and receipts for delayed travel or unplanned accommodation in Ushuaia or Buenos Aires if your trip is disrupted, and check whether your existing health cover extends abroad at all before assuming a standalone policy is optional.