Do You Have the Right Health Insurance?

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Throughout your life you will go through various levels of necessity regarding health insurance and insurance in general. When you are young and single and healthy you will not need mountains of life insurance or health insurance. But, as we all know, the older you get the more of both of those you will need and want. 

Where you are in your life will determine how much insurance you would carry whether life or health. Many young married and single people carry zero life insurance and some carry just enough to have themselves buried. And that makes sense. Especially if they are just starting out in their careers and money is tight and they have no dependents.

As a Nashville health insurance agent I try to ensure that my clients are making the right decision regarding their health insurance. I have found that many young people are quite healthy and rarely have a need to see a doctor and if they do, they can usually pay that bill out of pocket. For that reason they will forgo health insurance all together and take the risk that they can pay cash for the health and wellness expenses. I was one of those young people. 

In fact, I get calls from anxious parents quite regularly about their adult children that refuse to get health insurance due to the cost. Even with their employer providing plans it is still unaffordable. And because they have the option to get coverage through their employer they no longer qualify for subsidized programs with the government.

Many young people have never had to visit an ER or spend a few days in the hospital and then have to confront the massive bills that come with that. Likely their parents have never had to do that either. So why health insurance? Why spend what would be a new car payment on something I may never need? Again, I tend to agree with this thinking.

As for those anxious parents? They have never gone uninsured. They have had the same job for 30 years and have never had to go without or ever shop for insurance on their own. They get an employer sponsored plan that is partially or fully paid for and that is how it has been for many years. It is probably hard for the parent understand the hesitancy of their children to invest in health insurance.

The problem is that there are so many options that it is confusing to the young person and sometimes the older crowd that for the first time has to search for their own insurance. The older crowd wants major medical, low deductibles and co-pays just like they were offered through their employer. But, those plans are hard to find at affordable rates for the young person.

The reason that the older folks want that kind of coverage is that they have a lot to lose. Meaning they have worked a long time and have invested in various assets that are in jeopardy if the incur a huge medical bill. So they want insurance with almost unlimited benefits that limits their own out of pocket costs. This is what “major medical” insurance is.

This is the traditional health insurance plan that nearly 60% of Americans see with their employer coverage. It is what everyone wants but not everyone can afford. And I would say that not everyone needs it. What? Yes, not everyone needs millions and millions of dollars of health insurance. The odds that even an older, very ill person with a very unusual condition would incur such expenses.

How do I know? Well statistically only about 2% of all medical bills even exceed $50,000. So what are the odds of getting a six figure hospital bill? Seven figure? The odds are lower and lower. For someone under the age of 30 the chances of having an incident like that are tiny. When I consult the younger crowd that have no dependents or are just starting a family I tell them to consider something other than a major medical plan. It is always better to have some kind of coverage than to have none.

There are health insurance options that are more affordable and still offer some level of financial protection. Since the majority of claims are less than $50k you could purchase a limited benefits plan and feel comfortable knowing the majority of you expenses would be covered in the event of hospitalization or an accident and a trip to the ER. 

Be careful in choosing a limited benefits plan. Some are great and others are pretty weak. There are no “deals” in health insurance. Which means all insurance companies have the same risk and liabilities. The only way you get cheaper health insurance (outside of a subsidy) is that you get less benefits. And I would only recommend carrying one of these plans for a short duration until you are able to get onto a more comprehensive plan.

These are not short-term plans, but limited benefits plans. Meaning there is a limit to how much the insurance will pay and no limit to how much you could pay. So you are not protected against massive medical bills from kidney failure or cancer however minor surgeries and short hospital stays should not lead you to bankruptcy.

If you are relatively healthy and find yourself stretched thin and your parents are all over you about getting coverage you can find many viable options to satisfy your pesky parents and protect your bank account.

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