Do I Really Need Health Insurance?


Do I really need health insurance?

You wouldn’t think twice about buying insurance for your car or home, but quite a few people have gone without health insurance, and continue to, even though the Affordable Care Act will start to assess penalties on individuals who do not have health insurance this year. However, health insurance is not just to protect your physical health—it’s key to protecting your financial health as well. Without insurance, medical bills can quickly become insurmountable, which is why they’re the number one cause of bankruptcy in the United States.

So is health insurance the answer to financial woes? If you’re smart about picking an insurance plan that fits in with your finances, it can be.

But I’m healthy—why do I need insurance?

There are two big reasons people in good health should have insurance. It will provide free preventive care to keep you in good health, and it will ensure you get the help you need in case of emergency. After all, no one plans to be in a car accident, but being involved in one could result in tens of thousands of dollars in medical bills. Without an insurance plan, that could all come out of your pocket.

Preventative care can be crucial as well to help you catch problems early when they’re easier to treat. It’s easy to feel invincible when you’re young, but if you do not take care of yourself, that good health will not last. Preventative care that you do not have to pay for out-of-pocket means insured individuals are much more likely to get that care.

What kind of insurance do I need?

The insurance you need depends on your financial situation and ability to pay. While all insurance plans offer what the Affordable Care Act considers essential health benefits, the amount your plan covers, and the cost, can vary greatly.

All plans will require you to pay a monthly premium, regardless of your health needs. If you need medical care, you may be required to pay a fixed co-pay amount for services, or meet a deductible before insurance coverage kicks in. The higher your monthly premium, the lower your co-pay and deductible costs. The trick to picking the right insurance plan, is balancing a premium payment you can afford every month, while also having co-pay and deductible costs you can afford to pay—just in case you should ever need medical care.

Unfortunately, it’s not just the uninsured who can wind up in bankruptcy over medical bills. If you have a plan with a low monthly premium, but a high deductible that you may not be able to afford to pay before coverage kicks in, you could still wind up in financial trouble. So whatever plan you decide on, make sure it’s affordable.

What if I don’t get insurance?

If you don’t get health insurance, you could get stuck paying out-of-pocket for any medical expenses you have. If you have a fall and break your arm, you won’t be able to sign up for a new plan while you’re in the hospital waiting room. You may wind up footing the emergency room bill along with the cost for any follow-up care. The cost of a broken arm averages $7,500, while a day in the hospital averages $10,000. As you know, unexpected bills like that are not easy to swallow.

Additionally, if you do not have health coverage in 2014, you will pay a tax penalty of 1% of your yearly household income or $95 per person ($47.50 per child under 18), whichever is higher. After that, the fee will go up annually to 2% of income or $325 per person in 2015 and 2.5% of income or $695 per person in 2016. After that point, the penalty will be adjusted for inflation, which means it will keep going up.

How can I sign up for insurance?

You may be eligible for insurance through your employer, Medicare, Medicaid, the Children’s Health Insurance Program, TRICARE, or veterans’ health programs like Veterans Health Care Program, VA Civilian Health and Medical Program, and Spina Bifida Health Care Benefits Program.

You may even be eligible for discounts on certain types of insurance programs through a membership you have with a particular organization, like PenFed. PenFed offers member discounts on programs such as On Call Doctor and TRICARE Supplement Plan.

If you’re not eligible for one of these programs, you can visit to explore your insurance options.

What is Open Enrollment?

Most insurance plans (including have a particular time frame in which you need to sign up, called open enrollment. If you do not sign up during this enrollment period, you will need to wait for the following year. However, there are exceptions for individuals who change jobs, get married, or have another major life change.

Open enrollment for has ended for 2014, but enrollment for 2015 plans will begin on November 15, 2014. If you’re eligible for Medicaid or CHIP, you can apply at any time.





Posted in: Personal Finance, Saving Money