Health insurance can seem like an unnecessary financial burden. You’re healthy. You’re not old enough to worry about things like back pain. Your health-care costs consist of that one time your mom finally convinced you to go to the doctor for antibiotics because you caught a virus.Why should you shell out your hard-earned cash for health insurance?
Low-premium – or “catastrophic” – coverage is tempting, whether you’re signing up through healthcare.gov, or selecting a plan from an employer. You’re not looking forward to adding another bill on top of rent and car insurance. May as well go as cheap as possible.
But hold on a second.
I am a severe asthmatic who needs health insurance, and not just because it’s government-mandated. I’ve spent a lot of time thinking about premiums versus out-of-pocket costs, or rather: paying up front for peace of mind versus praying I don’t get sick.That must make me some sort of expert, or at least someone who puts some thought into health care.
So hear me out before you press “enroll” in catastrophic coverage. Aside from your monthly premium, here’s what factors you should consider when thinking about health care coverage.
What is your income and living situation?
Your household size and income could qualify you for discounts on your out-of-pocket costs through the Affordable Care Act. Explore whether or not you meet the threshold, and then make sure you select the right plan to qualify. Paying a higher up-front premium now could actually result in lower health-care costs overall. Also, it’s important to note that certain individuals are eligible for a Premium Tax Credit. Go to the IRS website to find out more about qualifying and obtaining the credit.
How big of a check can you write right now?
If you crash your car, how much do you owe before insurance covers it? I bet you thought about how much you could afford when you chose that deductible. Health insurance works the same way. If you have a deductible, you must pay that amount before coverage kicks in. So if you do have an unexpected expensive hospital visit and your deductible is the federal maximum, can you afford a $6,350 bill right now?
What are your actual health-care costs?
Have you ever added up your health-care costs? Just like those cans of Red Bull, you might be surprised at how much co-payments and medications add up. Get a better idea of your actual health-care costs before you commit to an insurance plan to budget in not just your monthly premium, but out-of-pocket costs, too.
How at-risk are you – really?
Just because you never get sick, break a bone, or need medications doesn’t mean you never will. It’s always best to be prepared, but it also helps to think about your “risk” factors. Do you enjoy sports like skiing? Do you burn the midnight oil and eat a lot of fast food? Are your driving habits, um, questionable? Take a good look at your risks before you assume that you “won’t need health care.” Start with this online health assessment tool.
How important is your health?
Many of us can get by for quite a while without seeing a doctor. Even those of us with lifelong conditions can get by on prescription refills. But could you do better? When I got great insurance through my employer, I jumped at the chance to take full stock of my health. I got a dermatologist to check out that dry skin on my arm. I got a full allergy test. I did physical therapy to strengthen my knee for running.
Sure, you could get by without ever seeing a doctor. But it feels good to take care of yourself. And hey – you’re paying for it, so you may as well take advantage of it.