As the saying goes, health is wealth. However, if not taken care of properly, our health can lead us to bankruptcy. Who would not want to be perfectly fit at all times? Everyone does. We enrolled in fitness classes, research about healthy tips, and work on how to prepare dishes that are good for our well-being to avoid diseases. Still somehow, at some point, sickness is inevitable. Or let’s say, we’ve prevented diseases by being health conscious, but how about those unpredicted misfortunes we do not wish to occur? There are health-crippling circumstances that we cannot control, what would we do then to prepare ourselves when it happens?
Before WWII, a program to help people prepare for future health expenses is not familiar to many. However, after the war, the government mandated a wage freeze as their response to inflation. Due to this crisis, companies cannot give a salary increase to their employees, so they look for alternative compensation to address this. This is how health insurance was born.
Health insurance is a term used to represent any form of guaranteed assistance to protect you against the costs of medical services. It is the same insurance you got for your apartment or car. The only difference is that health insurance covers the most valuable subject, which is our wellness. This type of insurance works best by defending your life savings from being wiped out due to unforeseen major accidents, chronic diseases, and other medical emergencies. Indeed, this can save you from spending your entire savings due to the expensive cost of medical care, which leads most Americans to bankruptcy.
Furthermore, unlike other insurance, health insurance is an irreplaceable necessity that you should not delay. Like for example, if you do not have car insurance, you can ride the bus until you have your car fixed. However, when you broke your neck, you cannot temporarily fix it by yourself until you have earned enough funds to see a doctor.
Depending on your needs, different kinds of health insurance provides a different level of financial protection. Make sure to choose an adequate plan that meets your needs. Before you select your type of care, you have to be familiar with the following terms first.
1. Coinsurance – is the percentage of the bill you pay in case there was a surgical procedure conducted or for hospital stays. There are also instances where you have to copay the doctor’s visit and hospitalization. Usually, a copay for a doctor’s appointment is $20, around $50 for the hospital visit, and $10 to $40 for each prescription.
2. Deductibles – this is an annual contribution you have to pay before the insurance company provides their assistance. This payment can range from $500 to more or less $10,000, which starts over every January 1 of the year. Deductibles can be at low cost if you have a company-sponsored plan.
3. Monthly Premiums – this is a monthly payment that insurance companies collect even if you don’t make a claim
According to the Affordable Care Act, personal spending for health care should not exceed above $6,000 for one person and should be limited to $13,200 for one family. After subtracting these out-of-pocket costs, the insurance company should pay the rest of it 100 percent.
However, how do premiums, copayment, and deductible works? Well, the higher you pay for the monthly premium, the lower you pay for deductibles and coinsurance, and vice versa. Many believe that the chance to get sick is small, so they opt to pay for a more economical premium, which leads them later to a problematic scene when they bump into unpredictable health issues because they are obliged to pay for the costly deductibles and copays.
If you have a chronic illness like kidney failure and you know you’ll have to be seeing your doctor regularly, it would be recommendable for you to choose to pay higher premiums than spend more on the deductibles and copay per your appointment.
In general, there exist public and private insurance. Public insurance such as Medicare and Medicaid is available for seniors and low-income families who meet the eligibility requirements. While private health insurance is for everyone and can be acquired through the following:
a. Large Businesses – most health insurance is sponsored by employers as part of the employee-benefit package they offer. Employers paid for the monthly contributions on behalf of their employees. Typically, the employer grants up to 85% of the premium for their employees and 75% for their employees’ family, and the employee himself shoulders the rest of the premium.
b. Small Businesses – some employers do not have the same financial state to incorporate their employees’ health benefits plan. Instead of contracting health insurance company, they fund their own health care programs for their employees.
Many universities and colleges, even graduate, professional, and trade school, sponsor health insurance plan when you enroll.
If you are self-employed, you are most likely to purchase your health insurance plan directly from a health insurance company.
a. Traditional fee-for-service health insurance plans – the most expensive, yet you have the freedom to choose your health care provider.
b. Health maintenance organizations (HMOs) – this offers less extra copayments, but your chance to select a particular health care provider is reduced to those part of HMO only.
c. Preferred provider organizations (PPOs) – gives the same advantage as HMO, but your choice of health care provider is extended to many without restriction.
Health insurance provides plenty of benefits, not only for our health but also to our pockets. You may think that enrolling to a health care plan is an additional burden aside from our bills, but when you are a person of preparation, this benefit is a lifetime investment.
Love your health, and your health will love you back. Invest in a health care plan, and you’ll reap the fruit by the time you need it. Health is truly an investment. If one wishes to become rich, they must put their health on top of their priority list.