Why Buy Private Health Insurance Now?

With the apparent inevitability of some type of government forced health reform, maybe it seems that buying your own coverage right now doesn’t make sense, and you believe you should wait to see what the government is going to give you first. Before we can address that thought, let’s talk about why you need health insurance and the reasons why people who don’t have health insurance right now, don’t.

The obvious reason to have health insurance in the first place is to shift a portion of the financial burden for your health care costs to the insurance company. You pay premiums, co-pays, deductibles, and co-insurance, as defined in your plan, and the insurance company pays the rest. Few people could afford to pay for a five or six figure medical bill when services are rendered, and structuring a long term payoff of such a staggering amount, would be like paying the mortgage on a second property. There is probably no other situation in which any individual can run up such an astronomical bill as from the treatment and hospitalization for a catastrophic sickness, illness, or injury. Sure, we may like the feature of only paying a small co-pay for doctor visits or prescription drugs, but our real fear is for the possibility of something big actually happening to us. Maybe that is why younger adults tend to opt out of health insurance more as a group, because of their perceived immunity to something catastrophic ever happening to them.

There are only two main reasons why someone would not have health insurance: health or money issues. Group plans have provisions to take people with health risks, so if you work at a company who offers you group coverage, you have pre-existing conditions, and you choose not to take it, you are declining your best chance of getting health insurance. Even if you have to contribute to the cost, there are advantages to getting covered under a group plan now. If you leave your job while covered under a group plan, you will be able to continue coverage for months or even years under either COBRA or a state continuation plan. When you get a new job, and you are once again offered access to a group plan, because you have had continual coverage, all of your pre-existing conditions will be immediately included. In addition, some individual plans may accept proof of continual coverage and waive pre-existing conditions from temporary exclusion.

If you don’t have access to a group plan, then your insurance options are individual plans, and many of those can be expensive. To get the premium down, you may have to drop the coverage limits, or increase the co-pays, co-insurance, or deductibles. You may think, that if you could still end up with a $15,000 out of pocket expense with insurance, in a catastrophic situation you don’t believe is likely, it is not worth the annual expense of the premiums for such a lean plan. Plus, to get individual coverage, you have to qualify health wise, and if you have some ongoing health concerns, you may get turned down, or have certain treatments or conditions excluded for a waiting period.

Let’s face it. If you really can’t afford the few hundred dollars a month to cover yourself with a basic plan, then you really don’t have much of a choice. Or, if you have a chronic illness which would prevent you from getting individual coverage, then your only hope of getting insurance is to get a job at a company with a good group plan. But, if you willingly choose to save the few dollars of premium each month, on the hope that “nothing will ever happen to you,” that is a risk that could negatively impact your entire financial future. Plus, if you were diagnosed with some dread disease like cancer, diabetes, or any other expensive condition, while you were covered, then as long as you maintain health coverage somewhere, without a gap, you assure that you can keep coverage for those expensive treatments for the rest of your life.

Knowing for sure what the government will end up doing for your health care coverage is as uncertain as whether or not you will have a catastrophic claim in the near future. What is certain is that if you have to face that expense on your own, it will be devastating. Just because a county hospital will treat you if you don't have insurance does not mean they treat you for free. They will pursue you with every means possible to collect that bill. More bankruptcies in this country are due to the burden of huge medical bills than any other reason. There are two things you don't want to take chances with: your health and your money. Having no health insurance exposes you on both of those fronts. Find out what your options are by talking to an agent who offers the products and see if there isn't some level you can access within your budget. You can always upgrade or make changes once you are part of the system.