A Game of Zeroes: Why You Shouldn’t Go Periods of Time Without Health Insurance
You’re in transition. Whether voluntary or not, whether you lost your job or chose a new one, whether you’re going freelance or waiting for Medicare, the bottom line is: you need health coverage.
Your first option might be to just ignore your other options. You’ll just wait it out. What’s a few months without health coverage, especially if you’re not prone to vertigo-inducing hobbies or any clutch of deadly diseases?
The answer is simple, and we’ll illustrate it with what we like to call the “game of zeroes.”
Say you have a $100 medical emergency. Not the end of the world. You might have preferred pocketing that Benjamin but a bill like that isn’t about to break the bank.
Let’s add a 0 to that sum. Now you’ve got a $1,000 emergency. A set-back? Yes. But again, not enough to bankrupt you. Even if you don’t have that kind of money ready in the bank, paying off $1,000 is not unheard of.
Time to add another zero. Now you’ve got a $10,000 medical bill--equivalent of a few days in the hospital. This hurts. This can turn into a long-term credit nightmare. Still smaller than the average college debt but at least it’s not bigger than your yearly income.
Well, another zero then. Let’s contemplate a cool $100,000. Not a reasonable sum by any stretch of the term, but you know the price of catastrophes can be high. It’s prices like these that health insurance was designed for. And exactly the kind of unexpected sums that can bankrupt the uninsured.
The odds of such catastrophic cases are always low, but it’s their possibility that created the necessity for insurance in the first place. Insurance is the analysis and mitigation of risk, and we all enter into insurance contracts because we know life comes as a bit of a bet. Accidents, allergies, asthmatic attacks--and these are just what’s listed under the letter ‘A.’
If you don’t believe us, just read Steve’s story here.
If you’re ready to look at what options you have besides waiting, we’ll guide you through our short-term solutions (for those who simply are in a transition), long-term solutions (for those who want a bit more control over their health coverage), and alternative solutions (for those who want to supplement or replace traditional health care coverage).
Current Trends in Healthcare Coverage
Let’s take the broad view first: presidential mandates. Obamacare is in effect for the next foreseeable future, but the penalty fee for non-insured has currently been waived by President Trump. While that decision has not yet made its way out of the courts, the fee is not currently a slap-on-the-wrist that the average consumer needs to worry about.
Now, the average person will probably receive health coverage through their place of work. Group policies typically create more affordable premiums, which is why this model became so popular in the first place. However, this may not always be the case.
Before the 1980s, health insurance worked a lot like car insurance--you paid out-of-pocket for smaller expenses like doctor’s visits, but you were covered for hospitalization and the like (similar to how you pay out-of-pocket for oil changes but your auto insurance is there for you in the case of an accident). However, health insurance morphed into what it is today: a full package deal that covers for doctor’s visits, specialists, prescription assistance, hospitalization, telemedicine, and the like. And the more services a company provides, the more they’ll charge. Premiums have continued to rise since the 80s--but will this be the model for the future?
While IRAs, 401(k)s, and other retirement plans are still a large factor in employee benefits, it’s important to think about the needs of the next generation and technological breakthroughs like telemedicine will affect the cost and demand of healthcare coverage. It won't always be one-size-fits all; with demand for personal customization in everything from frozen yogurt to health policies, do you have a good idea of what you want/need going into the next 10 years?
You don’t expect to be out of health coverage for more than a few months. You’re simply waiting. Waiting for your next job’s benefits to kick in, waiting for your retirement check.
Waiting can be a dangerous game--did you know that three-fifths of Americans don’t have enough money saved up for a minor medical emergency (averaging $1,000)?
Thankfully, there are options outside of locking into another long-term health coverage plan. The most straightforward of these is the concept of short-term medical.
Short-term medical plans allow members to choose coverage from anywhere between 1-12 months. Members pay a monthly fee to have access to the same types of services available to them in their traditional health care coverage plans, including:
And what’s a temporary monthly fee compared to a $10,000 medical bill?
In this scenario, you need a long-term solution. The strategies we list here are for those who A) want to keep their current health plan but add to it, or B) want to replace their current health plan (or lack thereof) entirely.
Where do you find yourself?
Let’s return to the game of zeroes. Can you afford a $75 doctor’s visit? Can you afford a $100 gaff or a $1000 accident? Yes--you may not want to, but these aren’t unreasonable emergencies. What we want to avoid--what insurance was really designed for--are these large, unreasonable sums, like $10,000 or even $100,000 medical bills.
There are plans that cover specifically for these types of emergencies. And yes, you can apply for these policies without having to give up your current health plan. Typically broken up by types of medical calamities, the four most popular types of coverage plans are:
Accident insurance: Designed to help pay for out-of-pocket and medical costs that may incur due to an accidental injury. It can even cover for transportation and lodging needs in addition to hospitalization, exams, and the like.
Critical illness insurance: Otherwise known as a dread disease policy, it was initially designed to help elders afford the privilege of growing older--even at the risk of such catastrophes as stroke, heart attacks, organ transplants, coronary bypasses, etc. In addition, critical illness insurance can cover for costs not typically included in traditional health insurance coverage.
Cancer insurance: Sometimes cancer is not included in a critical illness policy (see above) and may be listed under a separate coverage plan.
Disability insurance: Provides income during transitional periods when you might be missing work or making less money because of a narrow set of circumstances.
Because these policies are designed for very specific circumstances, and not as a catch-all where everything but the doctor’s sink is thrown in, they can be very affordable. Not only that, but they account for the emergencies that can truly lead to bankruptcy. They make for great supplements or even affordable replacements for traditional health coverage.
Bonus Solution: Patient Advocacy
A patient advocacy program is available for the uninsured, underinsured, and just plain old insured alike. For a monthly fee, you have access to a network of professionals who will work with carriers and hospitals alike to reduce your out-of-pocket costs incurred due to hospitalization or other patient services. Find out more here!
And don’t forget, every Health Benefits Now quote is quick, free, and painless!