I Hate Ice (aka: 4 Reasons Health Insurance Is Actually Cheap)

It’s hard to believe it’s almost been two years already. For those of you that weren’t in Southeast South Dakota at the time, April 2013 brought us a very serious ice storm. It was two days of rain that froze as soon as it made contact with anything else. That means it was two days of listening to what sounded like gunshots in my neighborhood as trees shattered under the weight.

With 4 huge trees (70 feet tall or more) in our own yard, we were simply IMG_2215awaiting for the inevitable. Every time we would hear the crack of another breaking branch, we would peer out the window from across the room to see where the branch landed. There was no doubt – this was going to be an expensive little weather event. I was sure we would end up with an ice-covered branch bashing a hole in our roof.

The first night of the storm I decided to be a responsible homeowner and check the roof before I went to bed for the night. So at about 10:30 PM I slid me way down the driveway just far enough to see the roof. As I turned to make a quick inspection, I heard that dreaded crack immediately over my head. I made my best effort to fly like Superman back to the garage but didn’t make it. Long story short, despite having two thick hoods pulled up, I ended up in the emergency room getting 10 staples in my scalp that night.

The irony of it all? On our way to the ER I looked and found not a single tree branch on my roof….

Some health care items we know are coming. Your regular physicals, perhaps routine blood work, eye exams for updated glasses or contacts. Those we know are coming. And then there are moments like the one in my driveway. I was actually trying to be the responsible home owner and look where it got me.

Like it or not, health insurance is a crucial piece in being financially well. It prepares us for those moments we wish wouldn’t happen. Murphy’s Law and the scar on my head both make it pretty clear that life will happen regardless of our plans and best intentions. So how are you going to be prepared? Have children? As the parent of a 5-year old boy, I can tell you that you better be doubly prepared.

I understand that there is no small cost to health care. Here’s why those premiums are cheaper than not paying:

Reduced Bill – When life does happen, the hospital is going to charge someone for the cost. With insurance, you get to share that cost with someone else – the insurance company. You will still have co-pays and deductibles, but I assure you those are less than if you paid the full amount out of pocket.

Take, for example, the young, single mom that I met in one of our budgeting classes. She was working hard to address all of her issues. She had a regular job, was working to get all of her debt sorted out, and was in rehab to get her other demons under control. Looming over all of this was the time she developed a blood infection. After two hospitals, doctors, medications and everything else with no health insurance, she currently owes nearly $500,000 in medical debt. How does a person not get completely overwhelmed with a half million dollars just in medical bills?

Reduced Tax Penalty – With the passing of the Affordable Care Act, our government implemented an incentive for getting health care. Truth be told, it is probably more of a punishment, but it is what it is. Starting in 2015, you will pay a penalty in your income taxes for not having health insurance. Previously, a few have realized that the penalty is cheaper than the insurance premiums. That is about to change. When you file your 2015 income taxes, you will be assessed the greater of either 2% of your income or $325. Oh wait, that’s $325 PER ADULT, PER MONTH that you don’t have qualifying health care. It’s only $162.50 per year PER CHILD without coverage.

I could go on, but I’ll leave this subject with only a single final word – “Ouch”.

Fewer Potential Actual Crises – Many health care plans provide full coverage for routine check-ups; preventative maintenance if you will. If they are going to pay for it, you might as well use it. By proactively seeing your doctor, potential issues will probably be identified before they reach crisis point. When you reach a health crisis, the costs go up faster than the red flags indicating the crisis. Catch them early and save yourself some serious money later.

Deductible Awareness – By having a health care plan in place, you can have a much better idea as to what your out-of-pocket expenses will be. This allows you to take care of one more crucial piece – emergency savings. You now have a specific dollar amount you can save towards. By having your deductibles in savings before the health crisis occurs, you can pay immediately and avoid interest on a credit card or even added fees should the bill go to collections. Don’t fool yourself; hospitals can and do regularly send bills to collectors. Then it not only affects your wallet, but your credit report as well.

Lest I totally vilify the Affordable Care Act for you, there are some very good things the act accomplished. Included in the bill is a patient bill of rights. As listed in an article at Wisebread.com, here is a summary of your rights under the ACA:

  • You qualify for health coverage regardless if you have a pre-existing condition.
  • You can no longer be denied coverage for a mistake on your application.
  • You now have access to out-of-network emergency care (without penalty).
  • You now have the power to choose any physician or pediatrician of choice within your network, and you no longer need a referral for OB-GYN services.
  • Those receiving Medicare get a 50% discount on brand-name drugs.
  • You can stay on a parent’s health plan until the age of 26.
  • Insurance companies can no longer use annual and lifetime dollar limits of benefits.
  • Most plans have to provide free preventive care services, including certain immunizations and screenings for things like women’s services, blood pressure, diabetes, depression, HIV, and more.
  • Insurance companies cannot increase your rate in excess of 10% without public disclosure.

So unless you have an extra $325 per month to pay the government AND more money to cover the full doctor bill, get out and find health insurance. If you do have that extra money to spend, get health insurance anyway and let me know. I’ll find an account you can dump that extra money into.

If you have already been stung by high medical bills, there are options for dealing with it. Our counselors can walk through your debt with you and give you options for dealing with it. It may not be easy or fun, but you will never get out of debt if you don’t do something about it. All you need to do is contact us.

written by Breck Miller

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