Good health is a right bestowed on us by our Creator.
Health insurance is there to help cover many of the expenses that come with what we sometimes need to keep ourselves healthy. But with the American health-insurance market in a shambles by many reports, the question does arise: Do I really need health insurance after all, or am I better off paying the “tax penalty” for not having coverage according to the Affordable Care Act?
There is an expectation for everyone to have health insurance, but whether you need it individually depends on your situation.
First of all, health insurance does not guarantee you health care. It is not a voucher for health care – you can always get health care whenever you need it. The key word here is “insurance” – which means it exists to pay for major costs that might otherwise bankrupt your family yet is deemed necessary for your health (major surgery such as a transplant, cancer treatments, etc.).
Before the Affordable Care Act was implemented, many people had two kinds of policies that fit the bill in protecting families from huge expenses from major doctor and hospital costs – the Health Savings Account, and a catastrophic-coverage policy that covered major medical events and emergencies. Thanks to the ACA, these types of policies have been greatly restricted and even eliminated in some markets.
If you are currently sitting down and thinking about or discussing health coverage and whether it is a need in your household budget, consider asking yourself some questions:
- What is your annual household income?
- Do you have debts (including a mortgage)?
- Do you have a medical history?
- Do you have an emergency fund of savings (four to six months of expenses)?
- Do you have children? How many, and ages?
- What is the health history of your children?
- Do you have a religious or moral objection to health insurance?
- What is the value of your assets?
There is a lot of commentary that health insurance is a necessity, even for regular checkups and routine follow-up exams. Believe it or not, cash can go a long way to keep medical costs down, and regular office visits and check-ups are not so expensive as to challenge family budgets. Whether you need insurance depends on your personal situation based on the questions above.
While insurers are required to pay for follow-up care as well as annual checkups, you don’t need insurance for those events. Some compare health insurance to car insurance, which is only similar in that it is supposed to protect your assets from large bills or lawsuit judgments. But if you have a large enough income, sizable savings and a lot of assets, you could be considered “self-insured,” which means you won’t need health insurance. Also, if you use alternative methods of health care outside of modern medicine (such as acupuncture, chiropractic, Christian Science or other faith-based healing treatments), you won’t necessarily need health insurance either, as many of these alternative providers don’t take health insurance or their treatments are inexpensive and can be covered in family budgets.
Insurance comes down to your household and whether you want to protect your “stuff” in order to keep your family healthy. This is something that will involve an honest discussion with a financial planner who can walk you through your financial situation and can help you determine if the government-compliant health insurance is truly necessary.