Health insurance is also known as medical insurance and it is a type of insurance that covers all the medical and surgical expenses including hospital bills, medical bills, operation bills, etc. Usually, health insurance covers illnesses, injuries, and other physical conditions. It is a contract between the health insurer and the insurance buyer in exchange for a premium. The major advantage of health insurance is; it provides financial protection if there are serious medical conditions, accidents, or illnesses. However, do you really need health insurance or it’s a rip-off especially if you don’t usually visit the doctor or anything?
Insurance works typically by polling money from several people to cover the catastrophic event for a few. Therefore, whether it is a rip-off or not depends on a number of reasons. Over the years, healthcare has become atrociously expensive. So a simple illness might cause you a financial catastrophe. Therefore, it might be worthwhile to carry health insurance unless you have lots of money to cover the excessive expenses. On the other hand, if there is a good public healthcare service then you won’t need health insurance.
What Is Health Insurance?
Health insurance is a very important element of financial health. It helps you to pay for your health care. Usually, health insurance covers various expenses including routine doctor visits, tests, drugs, and treatment services, surgical expenses, dental expenses, and many more. You have to pay a monthly premium to buy your health insurance. If you have health insurance then you only have to pay a portion of the cost of your care each time you receive medical services.
How Health Insurance Can Save Money?
There are many ways health insurance can save money. It allows you to transfer a big financial risk to the insurer in exchange for a monthly premium. In some cases, health insurance is also very expensive but not having health insurance can be financially devastating. So, below are the ways health insurance can save money.
Health insurance is available with an annual deductible and an annual out-of-pocket maximum. Here, the annual deductible is the amount of money the insured must pay over the course of the year before the insurance company takes on greater responsibility for the medical costs. On the other hand, the out-of-pocket maximum is higher than the deductible. Once, you reach the annual out-of-pocket maximum, then the insurance company will be responsible for the remainder of your covered medical expenses. Some health insurances have separate deductibles for prescriptions and medical care. Therefore, if health insurance offers out-of-network coverage then it will have different deductible and out-of-pocket expenses limits.
Usually, the health insurance company determines the cost-sharing depending on how your plan works. Traditional health insurance includes copays and coinsurance. Here, coinsurance means the insurance company will pay a certain percentage of the discounted medical bill. On the other hand, Copays are a set amount of money that the insurance company will pay when they receive health care services. Usually, the set amount depends on prescriptions, primary care visits, specialist visits, and emergency services. There are also High-Deductible Health Plans (HDHPs) with Health Savings Accounts (HSAs) and it is a bit different from common health insurance. HDHPs don’t have any copays and coinsurance. Instead, you use the funds from the HSAs to pay your medical bills.
2. Discounted Rates
This is also a common advantage of having health insurance. If you have health insurance then the health insurance company will negotiate costs directly with hospitals and other medical care providers. Then the discounted rates are included with the health plans offered by the company. Most, Health Insurance companies have their own negotiated rates for in-network providers and all health plans offer coverage for emergency services. If you don’t have any health insurance then you have to pay lots of money because the cost of hospitals and clinics is higher than the negotiated rate. There is a significant difference between the negotiated rate and the standard rate of the hospital, therefore health insurance can save lots of money from the discounted bills.
3. Coverage Options For Young People
Many health insurance companies allow young people to stay under a parent’s plan if it covers dependents until the age of 26. This is very convenient because with single health insurance you can avail yourself of coverage for your children. Moreover, if your children are still in college then they might be able to find health insurance through a student health plan. Student health insurance is a very affordable option but make sure you check the coverage of the insurance and if they are qualifying coverage.
4. Additional Health Services
Many health insurances include additional health services along with insurance coverage which is very convenient. Usually, the following services are included with the insurance –
b) Nurse helplines
c) Care management
These are some very useful health services. Telemedicine allows the insurance holders to work with a doctor over the phone or through video chat in emergencies. Some insurance companies offer this service for free while other companies charge a fee. But, this charge is cheaper than setting an appointment with a doctor or visiting urgent care.
Is Health Insurance Worth It?
If you check how much money your health insurance plan can save then it is definitely worth it to buy health insurance. But you should determine if the cost of monthly premiums is worth the savings. If you have health insurance then make sure you keep track of how much you are spending on medical care, prescriptions, and premiums. Try to assess the total cost of the year and see what would be the total cost without insurance. If the total cost is greater than your insurance payment then it is worth having the insurance. However, if the total cost is less than the insurance payment then it is not worth having the health insurance.
Advantages And Disadvantages Of Health Insurance
|Advantages Of Health Insurance||Disadvantages Of Health Insurance|
|It provides financial protections||Health insurance premiums increase with age|
|Provide various health care facilities||Health insurance has a waiting period for existing health problems|
|Cashless hospitalization and claims||Health insurance has a co-pay or deductible clause|
|Health insurance plans come with NCB||Sometimes the cost of health insurance is greater than the required medical cost|
|Provides add-ons or riders facilities||Health insurance policies don’t offer coverage for all types of diseases and health conditions|
|Having health insurance also provides health benefits||Some health insurance requires completing various official formalities for receiving the claims|
|Health insurance also provides an immense feeling of safety|
FAQs About Is Health Insurance A Rip Off, Especially If You Don’t Usually Go To The Doctor Or Anything
Is It Cheaper To Have Health Insurance Or Pay Out Of Pocket?
The answer to this question depends on the medical condition of your health. Sometimes it is cheaper to pay out of pocket than to have health insurance. But, over the years, medical expenses have increased a lot. So, if you have a severe medical condition then health insurance will be much cheaper and it will save lots of money.
Is It Worth Buying Health Insurance?
If you consider the present medical expenses, then it is worth buying health insurance. Having health insurance means you can receive medical care without blowing up your savings. Nowadays, health insurance also provides lots of facilities apart from hospitalization expenses. So, if you consider the advantages of health insurance then it is definitely worth buying health insurance.
How Much Should I Expect To Pay For Health Insurance?
In the USA, the average national cost for health insurance is $495 for an individual and $1265 for a family per month for the year 2021. However, the actual cost of health insurance might vary depending on the wide selection of health plans.
Can I Go Without Health Insurance?
Yes, you can go without health insurance because no law enforces you to must have health insurance. The federal authority also removes the tax penalty for not having health insurance; so there is no longer a fine for being uninsured. Therefore, it is totally up to you whether you want health insurance or not.
How Much Is Health Insurance A Month For A Single Person?
The cost of health insurance for a single person might vary depending on the state you live in. If you are a single person without dependents and living in NSW then you might have to pay between $110.50 and $142.30 a month for basic health insurance.
How Do I Pick The Right Insurance Plan?
If you are trying to pick the right insurance plan for you then you should try to find the right coverage for your medical condition. It is always better to pick family insurance than individual insurance if you are married or have a family. Moreover, you should try to pick a health insurance plan that comes with lifetime renewability.
Last Updated on February 7, 2022 by
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.