Why Do I Need Health Insurance?

Open Enrollment for the health insurance marketplace is upon us again. As a licensed health insurance agent, I find that this time of year is extremely stressful for people because the insurance is written in language that the average person has a difficult time making sense of it, much like taxes. In an effort to help people understand their choices, I have written a series of short articles to explain what insurance is, how it works, and what you should look for in a good plan. Please look for the other articles to assist you with this as well. If at any point you feel confused, overwhelmed or need someone to explain things to you or just look at your choices from a different point of view, please feel free to call me at (919)920-6765. As an advisor, it is my job to help people understand. 

This is the first in that series of articles. I hope you find it helpful.

Most people’s initial response to this is “DUH!, to help me pay my medical bills.” While that is true, there is a more to the story. It is designed to protect the assets that you have worked so hard to get. Medical bills are always one of the top reasons why people lose homes, bankruptcy, etc. 

Our view of medical insurance has changed over the years. In years past, people understood that health insurance was designed to protect these assets in the event of a major medical crisis. Since the Affordable Care Act was enacted, however, people have a different view. Because the ACA plans now include preventative care and often copays at the doctor or pharmacist, many people now feel that insurance is there to provide them with medical care for little or no money. 

While that is understandable with the new health insurance rates being so high, it is not accurate. The purpose of health insurance is the same as it ever was. The change in the plans have made the change in many people’s perception. 

I often get asked “why should I pay for insurance if I am going to have to pay at the doctor’s office too.” I completely understand the question. It seems unfair. If you will notice with the plans available in the marketplace, there are multiple options. The lower costs plans have high deductibles with often no benefits until you meet that deductible. These are usually the bronze plans. They allow you to save money monthly to pay toward the day to day stuff and really are simply to cover the catastrophic.  The lower the deductible and copays, the higher the cost of the plan. As you can see, health insurance is not there to cover everything, but is more about helping you schedule your daily out of pocket expenses such as doctor’s visits and medication in a way that is easiest to manage for you based on your health situation and your financial situation and to protect your assets in the event of something catastrophic.

The second reason is not so easily seen until you have a catastrophic event. It is to provide you access to medical attention in a catastrophic event. Now it is true that if you have an emergency, the ER is required by law to take care of the immediate need and stabilize you regardless of your ability to pay. That’s not the issue. The question is if your loved one gets cancer and you have no insurance, are they required by law to provide chemotherapy regardless of your ability to pay? 

The long and the short of that is…..no. I found this out when my sister was diagnosed with Hepatitis C and Liver Cancer. The only thing that would save her is a liver transplant. She had to have health insurance to even be put on the transplant LIST. The cost of the transplant was $500,000. So there is the most important reason to have health insurance.   If it were your loved one who needed life saving surgery like my sister, do you have $500,000 to pay out of pocket? If not, you absolutely need health insurance to make sure they will be taken care of. 

So once you have decided that you need health insurance, what kind should you get? That will be the topic of my next article. Please feel free to share this and all posts to your social media pages or with friends. There are so many questions about health insurance and my mission during open enrollment is to give them some answers.