Health insurance is as crucial as your auto’s insurance. These 2 are very similar in that they buffer you against financial loss due to unforeseen occurrences. The major difference is that a health insurance policy protects you from the risk of medical bankruptcy as a result of expensive surgeries, hospital stays, and prescription drugs.
Is health insurance necessary?
When the Affordable Care Act (popularly dubbed Obamacare) was enacted in 2010, it made it mandatory for all Americans to have health insurance unless they qualified for exemption. Failure to have this cover triggered a tax penalty amounting to $695 (adults) and around $350 (children) or a 2% of your annual income, whichever was bigger.
However, this tax penalty fee was abolished by President Trump when he signed the Tax Cuts and Jobs Act into law. Although some states, including California, Vermont, and the District of Columbia still expect you to obtain health insurance, it’s no longer mandatory at the federal level.
Following the abolishment of the individual mandate, there was a notable increase in the number of Americans who opted out of health insurance. According to a recent report by the US Census Bureau, 29.6 million US citizens (9.2%) didn’t have health insurance coverage as of 2019.
Being uninsured saves you money…
From the surface, not having health insurance is money-saving since there won’t be monthly premiums that add to your list of bills. Recent data shows that average American families spent around $5000 on health coverage for every individual in 2019.
For a young adult, this is a good amount of money that could go into building a stable and secure future.
… But it’s a ticking bomb!
While not having to pay policy premiums leaves some extra dollars in your wallet, this decision comes with dire health and financial risks including;
Overwhelming emergency medical expenses
Not to be taken lightly, healthcare cost is among the key contributors to most average Americans’ downfall. Actually, most studies show that medical-related debts are the main reason why most people file for bankruptcy today. This often triggers a domino effect by leaving you with a bad credit score and lowering the prospects of securing a job in the future.
Lack of timely health care
Timeliness is extremely valuable in our daily lives, and more so when healthcare is involved. The faster you receive the necessary health care, the higher your chances of having a better outcome. Having health insurance coverage means that you are able to access medical care as soon as possible. This helps a lot in preventing illnesses from becoming unbearable.
If you don’t have healthcare coverage, you need to set an emergency fund aside to help you meet an unexpected medical expense. Unfortunately, over 60% of uninsured Americans say that they would not be able to foot a sudden $1000 medical setback from their savings according to a report by Bankrate.
Types of Health Insurance Plans
The average cost of seeing a doctor in the US is $300-$600. Add the ever-rising price of prescription drugs to this figure, and you’d easily be in a bind if you’re uninsured or don’t have a good amount of emergency funds ready. This makes it a smart idea to have health insurance.
Health insurance is a complex industry. It’s common for most people to feel overwhelmed by the process of choosing between different types of health insurance plans. Let’s have a small discussion on the various options available for you;
Managed Health Care Plan
This is a type of insurance plan where an insurance provider signs a contract with a health care provider to provide quality healthcare to the insured individuals at a lower cost. There are 3 different types of Managed Health Care insurance;
Health Maintenance Organizations (HMOs) – this is the cheapest plan, and you’re covered only if you access care within the network.
Preferred Provider Organizations (PPOs) – this allows you to get care both in-network and out-network. You don’t need a referral to visit a specialist.
Point of Service (POS) plans– this is the most expensive of the 3 and it allows you to choose either HMO or PPO whenever you need healthcare.
Traditional Health Insurance
This type of health insurance is also commonly called a Fee-for-service plan today. It’s the least restrictive as it allows autonomy in terms of choosing and changing doctors and hospitals. Importantly, you don’t need permission to see a specialist. The biggest downside to this health insurance plan is that it has the most out-of-pocket expenses. For instance, in most instances, you’ll be required to make a deductible of between $200 and $2500. Even when the insurer kicks in, you may have to pay around 20% of the total bill.
Choosing an insurance plan
No single health insurance plan is superior to others. It boils down to your health, personal preference, and budget. Here are a few variables to consider when choosing between the different options;
Premium– a predetermined contribution that you make monthly
Deductible– the agreed amount of money that you pay at the start of every year before the insurance company can start paying for the services
Co-pay– a percentage or a fixed amount that you have to pay during a doctor’s visit or when paying prescription drugs since it’s not covered by the insurance policy.
Buying Your Prescriptions without Insurance
Paying for your prescriptions out of pocket is scary- we can’t deny that. However, there are lots of ways that can help save on medication without coverage. One of these methods include the use of a coupon card from an Rx company, such as GetDealRX.
These companies save you money by negotiating lower prescription prices on your behalf with the pharmacies near you. In some instances, these coupon cards are cheaper than insurance and can save you up to 80% of the medication cost. Incredibly, these services are free to use, and you don’t have to sign up to be a beneficiary.