I know this is a very hot political topic right now, but I'm not here to talk about reform or how expensive health insurance is. I'm talking about this because this is a vital part of having a solid financial foundation. As I mentioned in my tip of the week, medical debt is the number one reason why people declare personal bankruptcy. This is totally a preventable reason if you are prepared with an emergency fund and of course have health insurance. Now I know some of you are thinking, I can't afford health insurance or I don't qualify for it. These are probably the top 2 reasons why people don't have it to begin with.
First up, "I can't afford it". Frankly, this is one thing that you can't afford not to have. There is a certain number of you who may have coverage offered at work but you don't make enough to afford it. I'm talking about the family who is below the poverty level. If this is the case, you probably qualify for Medicaid. I am not endorsing using Medicaid permanently as a means of life, merely as a stepping stone until you can improve your education, get a better paying job or find other ways to increase your income. Another common problem is if you lose your job or are self-employed. Paying for COBRA insurance through your previous employer is probably not feasible since you don't have an income. These plans are usually out of reach for most. You're better off to buy a private insurance plan. Find an agent who can shop around different types of policies for you. There are many options to choose from. Higher deductible plans might not be ideal for you permanently but they can be customized with office visit coverage and are much cheaper than other more traditional plans. Use this where possible when you are between jobs or between college and a career. This is where HSAs are very convenient to have, like I talked about last week. I'd rather have you be looking at $5,000 or $10,000 worth of medical expenses with a high deductible plan than tens or hundreds of thousands because you didn't have any coverage.
The other main reason why people don't have insurance is because they have really expensive coverage at work, but don't qualify for a private policy. Many chronic medical conditions as well as most mental health conditions are deemed uncoverable by individual plans. I know this because my husband has been denied individual health coverage. For these reasons, most if not all states have a group pool health insurance plan that you can buy into. The rates are more expensive, but it is a great alternative for those who otherwise would not be covered.
I decided to write about health insurance this week because of a story I saw on the news recently. A young married woman was standing on the side walk waiting for the bus to start her final semester of college. An impaired driver jumped the curb and plowed into where she was standing, completely destroying her knee. She was a dance major and loved teaching ballet. If this weren't bad enough, sadly, her husband just graduated from college a few weeks ago and they were no longer covered by health insurance. This poor couple will be impacted for years to come, not only physically and emotionally, but financially. Things like this happen everyday. Please take the necessary steps to prevent and prepare for such things. It's really that important.
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