While the Great Recession has officially ended and the economy seems to have mostly rebounded, many Americans are still jobless and college grads are entering the workforce owing thousands in student loans. Those who are fortunate enough to have work have enough debt to tend to as it is, without having to worry about purchasing health insurance.
If you are facing financial hardship, then Obamacare may be piling on as the new law requires that every American acquire insurance coverage. If you don’t qualify for Medicaid or Medicare then you have to go into the health insurance marketplace to see if you qualify for subsidized health coverage. As you consider your budget and try to plan out for healthcare spending, you may be tempted to just pay for the cheapest option available. Here are some factors to consider before investing in an insurance policy.
Forgoing Insurance Altogether
Determining whether it’s worth it to buy cheap health insurance all comes down to your current situation. For instance, young adults who have a tight-budget and decent health may feel like they are wasting dollars into a health care system they don’t even use. Some say they’re better off paying for medical services as they’re needed and just pay the penalty for the individual mandate. But the problem with this is that every year, you have to spend more and more in penalties, without getting anything back in return.
Back in 2014, the penalty for uninsured individuals was $95 or 1 percent of your income. Then in 2015, this raised to $325 per adult or 2 percent of household income. In 2016, this raised higher to $695 per adult or 2.5 percent of your household income. This will only continue to rise.
When a Cheap Plan is Worth It
The individuals who benefit the most from health coverage are those who are prone to accidents or have health conditions that need regular medical attention. The cost for doctor visits, prescription drugs, surgery and therapy can all stack up, making it very expensive to maintain your health.
However, if you’re a young healthy individual, you should still opt for a cheap health plan over nothing, just in case. You never know when you may get injured in a car accident, on the job or while on vacation. The cost for health plans for youngsters is fairly inexpensive, inside and outside of the health insurance marketplace.
Those who think young healthy people should opt out of dirt-cheap health insurance are short-sighted. Discounted rates are even offered for full cost plans. The reality is that you can never be sure that you will never need health insurance. One bad car accident or a broken leg can really put you in a rut financially. This was the purpose of the Affordable Care Act.
Consider Personal Health Care Needs
All health insurance plans provide basic benefits, have an annual cap for co-pay and offer some free things before cost sharing begins. The great thing about Obamacare is that you can no longer go bankrupt paying for medical care for cancer treatment or rehabilitation after a nasty auto accident. You also can’t be denied coverage because of your condition, either.
Before committing to a health plan, consider what medications your on, your health risks, and likelihood of needing premium care. Balance those needs against the available plans and you may realize that a more “expensive” plan will actually save you money in co-pays and prescriptions drugs down the line.
Health insurance is like any other responsibility you have in life. No one likes to pay rent and car notes, but we enjoy having a place to live and a car to drive. Buying health insurance, cheap or not, is key if you want to safeguard your health.