Why do you need health insurance?

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Insurance is a fun concept. It’s probably the most expensive thing you own and hope you never have to use. You insure your home, your car, your boat, your belongings, even your pet on occasion, without giving it much thought. Yet when it comes to insurance, many find it unnecessary or too expensive.

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No one expects their house to burn down or their car to be destroyed, but having insurance just in case is imperative. Likewise, no one expects to get sick or hurt themselves, but we will all need medical attention at some point, often when we least expect it. “As we’ve all learned this year with COVID, you never know what’s going to happen,” says Nathan Teater, IFP Sales, Customer Service, and Enrollment Manager for Online Health.

Health insurance may seem expensive, but health care – doctors, hospitals, prescription drugs, rehabilitation, medical equipment and more – is prohibitive. In fact, the health care burden is the leading cause of bankruptcy in the United States, with about two-thirds of all bankruptcy filings including significant medical debt, according to the American Journal of Public Health.

And financial ruin is far from the only risk you face without health insurance.

Follow the money

Let’s start with the money. How much does health care cost? Most people have little or no idea. The Centers for Medicare and Medicaid Services show how easy it is to underestimate the costs of medical care:

  • A broken leg can cost up to $ 7,500 to repair.
  • A three-day hospital stay costs on average about $ 30,000.
  • Comprehensive cancer care can cost hundreds of thousands of dollars.

Young adults often go without health insurance thinking they are invincible. They are of course seriously mistaken. While health problems certainly increase with age, anyone can break a leg, anyone can need hospitalization for an accident, and there is no age limit for cancer. Without health insurance, you are responsible for these costs – like if your car was stolen or if a tree fell on your house.

“Life is happening and we always try to encourage young people to take a second look,” says Linda Greenfeld, Product Manager for LA Care Health Plan. “Being healthy doesn’t mean that life doesn’t exist, and that you don’t break your leg, spend time in the emergency room, and walk away with tens of thousands of dollars in bills. “

An ounce of prevention

Any health insurance policy offered under the Affordable Care Act must, by law, cover 10 essential health benefits:

  1. Outpatient care outside a hospital.
  2. Emergency room visits.
  3. Care of inpatients in a hospital.
  4. Maternity care before and after the birth of your baby.
  5. Mental health and substance use disorder services, including behavioral health treatment, counseling and psychotherapy.
  6. Prescription drugs.
  7. Physiotherapy and occupational therapy, speech therapy, psychiatric rehabilitation and other services that aid in recovery from injury or illness.
  8. Laboratory tests.
  9. Preventive services to keep you healthy and manage chronic illnesses like diabetes or asthma.
  10. Pediatric services, including dental and vision care for children.

Remember how an ounce of prevention is better than a pound of cure? Note in particular the last two health benefits, which are designed to keep you and your children healthy and reduce the risk of more serious and costly problems in the future. These include vaccines, screenings and some exams, as well as vision and dental care for your children. Best of all, these are usually free.

“By preserving your health, you can avoid the higher downstream costs of chronic disease and identify problems you may not be aware of, such as high blood pressure or prediabetes, which are identified in facilities. primary care, ”says Emma Hoo, director of Pacific. Business group on health.

And here’s an important consideration: Anytime a coronavirus vaccine is approved, insurance will likely cover 100% of the cost. “It could be a good investment there. I’m sure it won’t be $ 5. It’s going to be expensive, ”says Karen Pollitz, senior fellow in health and private insurance reform at the Kaiser Family Foundation. “If you are not insured, good luck.”

How insurance saves money

Reduced costs after reaching your deductible. Once you’ve reached your plan’s deductible, market plans cover between 60% and 90% of your covered expenses, depending on your coverage. You pay the rest in coinsurance or co-payments, usually in the range of $ 5 to $ 50 per service.

Maximum expenses. There is a limit to the total amount you will have to pay each year, regardless of the amount of covered care you need. For example, if your plan has a maximum of $ 3,000, after you pay that $ 3,000 in deductibles, coinsurance, and co-payments, the plan pays for all covered care for the rest of the year. This peace of mind, knowing that you will never have to pay more than your maximum, is priceless.

No annual or lifetime limit. All health plans in the ACA market, by law, have no limit on how much they will spend each year or over your lifetime to cover these essential benefits, once you reach your annual deductible. It bears repeating that something like cancer care can, over several years, cost several hundred thousand dollars. Your plan should cover everything.

So it looks good, but the coverage is still expensive, especially for those who don’t get health insurance through their employer and have to buy it themselves, right?

Not necessarily. ACA plans are much cheaper than most people realize. Tax subsidies are available even for high income earners – a single person earning around $ 50,000, a family of four earning over $ 100,000 – which can significantly reduce premium costs. “Famous last words: I can’t afford it,” says Greenfield. “The ACA and the scholarships it creates are a great avenue where people can get grants that make the awards much more affordable. And for those who have lost their jobs and income, Medicaid is available to cover their health care needs if they are eligible.

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