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Is Health Insurance Worth It?

Posted February 3rd, 2012 in Insurance by Jeremy Waller

Is Health Insurance Worth It?

Health insurance is one of the most important types of insurance you can have. Heath care costs in the U.S. are ridiculous! Even a simple inpatient procedure can cost you in excess of $10,000. If you don’t have insurance one trip to the hospital could put you under serious financial strain at best and could bankrupt you at worst.

Last year my wife and I had the tremendous blessing of welcoming two perfectly healthy twin boys into the world. Since it was twins her pregnancy was monitored closely, but there were never any serious issues. The birth went off without a hitch, the boys were healthy and didn’t have to go to the NICU. We were only in the hosipital 2 nights.

Total cost for the entire pregnancy and birth? $37,831.70.

Nearly $40 thousand dollars is insane! Without insurance that would have seriously rocked our financial world. Thankfully insurance paid for nearly 90% of everything.

Our $40,000 Bundles of Joy

Something like this is just the tip of the iceberg. We have some friends whose little girl had to spend 2 weeks in the NICU after she was born. Their bill was over $100,000.

Serious health issues can cost even more.

I’m not exaggerating when I say that not having health insurance can bankrupt you.

But Health Insurance Is Expensive

I know – insurance is one of the biggest expenses in our budget. But, it has saved us tens of thousands of dollars.

I think it’s possible to include health insurance in almost any budget. I even include it in my recommended budget for college students.

You don’t have to get the most expensive plan out there (obviously). In fact, with a lot of the more expensive plans you may be paying for more than you need.

Many of these plans that run $500 to $1,000 per month or more cover everything from doctor visits to eye exams to prescriptions. It isn’t really necessary to cover these types of expenses that you can afford to pay out of pocket. The biggest reason you need insurance is to cover the events that would destroy you financially. Insurance that only provides coverage for these type of events can actually be pretty reasonable.

High Deductible Health Plan With An HSA

If you do not have insurance coverage now because of the cost, you should consider a high deductible plan coupled with a health savings account at a minimum. It is one of the best low cost health plans you can get. Depending on your age and health you can find a high deductible plan for a little as $200 per month.

The insurance itself is designed to cover catastrophic events while you pay for smaller expenses out of your health savings account (HSA). You can contribute to your HSA on a pre-tax basis and can use the account to pay for qualified medical expenses.

If you don’t have health insurance now, you should at least get a few health insurance quotes. You may be very surprised at how affordable a health insurance can be if you are just looking to cover catastrophic events.

So is health insurance worth it? It absolutely is.

Do you have health insurance now? What kind of plan do you have? What lead to you choose that kind of coverage?

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8 Responses so far.

  1. I have health insurance through my work, but even if I didn’t, I would pay for private health insurance. It is definitively worth it.

  2. It is incredibly important to have health insurance as well as disability and life insurance as well.

  3. My family is trying the value insurance option. The jury is still out, but I do have some reservation about the shift cost to consumer plans.

    It assumes that consumers can figure out their costs. However, coverage can be very complicated. Often, you find yourself in a situation where you think you are covered only to find out otherwise. HSA’s need to simplify their coverage structure if they really want consumers to manage costs better.

    • I don’t know that I’ve ever seen an insurance plan that was simple. I worked as a life and health insurance agent for two years. It took me almost that long to really understand the ins and outs of most of the policies we sold.

  4. I hate paying our insurance premiums every other week. It always seemed like such a waste of money. Last year, however, our family had 5 medical emergencies. Even though we still had to come out of pocket to the tune of around $10k, it would have been significantly higher (almost $70k) without insurance.

    As such, right now I am a big fan of insurance!

  5. In my opinion, there is no greater way to decimate your total financial picture than to incur a serious health issue and not have the proper insurance to cover it. Not only could you have limited ability to earn income, but you are also draining your assets on medical care. Must have insurance.

  6. Is it a racket? says:

    The medical community has inflated costs because they expect to bill an insurance company and not an individual. When an insurance company is billed, they generally bargain the cost down with the practice or hospital and don’t actually pay what they are billed, so if your bill says your twins would have cost you 37,000$, and you probably paid some of that out of pocket, and your insurance company most likely paid less than 70% of whatever was leftover. Not to say that is not still a lot of money, but it looks scarier to consumers. Also, most folks who are insured pass their bill right along to their insurance company and pay their copay amount without looking at the itemized bill, but the last few times I used a hospitals services ( a broken arms for one kid and stitches for another) their were charges for services and provisions that we never received. We all have to get smarter about this. We cannot expect large corporations to put people over profits, or our government to put people before corporations, especially those with large donations available.

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