Your Complete Guide to Health Insurance
Insurance is often seen as a gamble, something you purchase to protect you against a worst-case scenario. If it doesn’t happen, you don’t suffer; if it does, at least you’re covered. But where health insurance is concerned, you’re gambling when you don’t have it.
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According to the CDC, 20% of Americans visit the ER at least once per year while the average American spends more than $10,000 a year on healthcare. 1 out of every 4 US deaths is related to heart disease, 1 in 2 Americans will get cancer, and the cost of treating these two issues is in excess of $10,000 a month.
It’s one of the most essential types of insurance and something that all Americans need.
Health Insurance Benefits
A standard health insurance policy will typically cover you for:
- Outpatient care (treatment that doesn’t require a hospital visit).
- Inpatient care.
- Pre- and post-natal care.
- Visits to the emergency room.
- Prescription drugs.
- Pediatric care (including dental and vision-related services)
- Preventative/diagnostic treatment and services.
- Substance abuse disorders.
- Rehabilitation and recovery.
- Mental health issues.
Any time you have an accident, suffer an injury, require emergency medical care, spend time in a hospital, or need medication—you’re covered. Some health insurance plans will also cover you for dental and maternity, but this isn’t always the case.
If you are pregnant or plan on getting pregnant, this is something that you need to look into. It is provided by the Affordable Care Act and offered to policyholders even if they are pregnant before coverage begins. But it is an expensive service and is not added to all policies as standard.
Where Can You Get Health Insurance?
The Affordable Care Act provides families with affordable health insurance, covering everything from dental to maternity and giving Americans more choice and transparency when applying for health insurance.
Some of the benefits of ACA include:
- Children can stay on family policies until they turn 26.
- No refusals for applicants with existing medical conditions.
- No lifetime or annual limits.
You can get all of the following health insurance types:
- Group: A work-based health insurance selected by your employer. There will be an open enrollment period in which you can enroll.
- Individual: A plan that you purchase yourself. It can cover you and your family and be purchased directly or through your state marketplace.
- Medicare: Mostly aimed at individuals over the age of 65.
- Medicaid: Insurance plans for low-income families.
- Children’s Health Insurance Program (CHIP): Provides cover for children in families that earn too much to qualify for Medicaid.
- Short-Term: These plans provide emergency cover for when you’re in-between plans or need to wait for an enrollment period.
What Happens When You Don’t Have Health Insurance?
Health insurance is necessary not just for your financial security, but for the security of the healthcare sector on the whole. If you’re hit with a 6-figure medical bill that you can’t afford and you’re not insured, there’s very little hope that the hospital will get any money from you. A long, drawn-out process will commence, during which your debt will be sold cheaply to a collections agency and the hospital will essentially lose all the money they paid to treat you.
Not a big problem, right? After all, everyone thinks that healthcare costs are massively inflated and hospitals make lots of money. Except, that isn’t always the case. It’s true that healthcare is more expensive in the US than it is elsewhere and that it’s possible to be charged thousands of dollars for something you could get for free in Canada, but US hospitals also have to contend with medical malpractice lawsuits, which cost billions.
If patients aren’t covered, the hospitals don’t get paid, which means their bottom line suffers and the jobs of nurses, doctors, surgeons, and specialists are at risk.
You Probably Won’t be Penalized
As of 2019, there is no tax penalty for not having health insurance. Just a year earlier, the penalty was the greater of 5 or 2% of your income for adults and 7.50 for children. This was partly designed to prevent people taking a risk by not opting for health insurance, which could lead to disastrous consequences. This rule was scrapped by the Trump administration, but there may still be penalties on a state level, including:
- D.C: The capital signed a law that went into effect in 2019, penalizing those without insurance.
- New Jersey: A health insurance penalty was initiated in 2019 and is fixed according to the state’s bronze-level policies.
- Vermont: A penalty was first introduced in 2020.
- Massachusetts: The Bay State has had a penalty in place since 2006.
You’re at Risk of Financial Ruin
Medical debt is the number 1 cause of personal bankruptcy in the United States. The US is the richest country in the world, but it also places a premium on the health of its citizens and everyone is one health crisis away from complete financial destruction.
What’s normal to us is anathema to people living in Europe, Australia, New Zealand, and pretty much every other developed nation. The United States is one of the few countries in the world where you can be the victim of an unprovoked attack or drunk driver and be left to foot the bill.
In most countries, if you wake up in the hospital following an accident, the only thing you have to worry about is getting back on your feet as quickly as possible; in the US, you have the looming threat of a life-changing medical bill hanging over you and know that every test, every tablet, and every night spent in a hospital bed takes you one step closer to financial ruin.
Health insurance won’t cover you for everything and treatment won’t stop being expensive, nor will it cease to have a significant effect on your finances. But it won’t be life changing, it won’t leave you with mountains of debt and no way to pay it.
Getting a Health Insurance Quote
If you’re purchasing an individual insurance plan, you can compare multiple policies to find the right one for you. There are a few things you need to look out for when shopping for a suitable health insurance quote:
- Deductible: The deductible is the amount you need to pay before your health insurance policy takes effect. If you’re receiving expensive treatment, you may need to pay this all at once; the higher it is, the more strain it will place on your finances. You can reduce the price of the policy by increasing the deductible, but this is only advisable if you’re confident you can cover the extra amount should the need arise.
- Prescription Medication Coverage: If you require a lot of prescription medication, or believe you will in the future, it may benefit you to increase the premium to reduce the cost of those refills. Otherwise, you could be paying out-of-pocket every time.
- Look for Maternity and Dental: Make sure you are covered for these two options if you or someone in your family needs them.
- Check the Network: It’s important to make sure the provider’s network encompasses hospitals and doctors in your area. Leaving this area to receive care could be costly.
As for Medicaid, CHIP, and other options, you can visit the government’s website and complete a simple form to see if you qualify.
Conclusion: Your Health is at Stake
A study in 2018 found that as many as 6 out of 10 Americans delay healthcare because they’re concerned about medical bills, while 2 out of 10 skip it altogether. You don’t need us to tell you how dangerous this is—your health and your life are at stake.
Modern medicine has advanced leaps and bounds in the last couple of decades. Cancers are being cured faster and better than ever before and we’re all destined to live longer as a result. But this is only true if you get the help when you need it—medical science can’t help you if you hide from doctors and hospitals, cross your fingers, and hope it will go away.
Make sure you and your family are covered with an appropriate health insurance policy and don’t think twice about getting checked and treated.