Let’s look at the three crucial mistakes people make with their health insurance. We’ll address the reasons people make these mistakes and how to prevent them from occurring.
Assuming You Don’t Need Health Insurance
Many healthy people assume they don’t need health insurance. They can pay for their rare doctor’s appointments as necessary. What they forget is that traditional health insurance is like the mandatory minimum of auto insurance – it is there to cover you during catastrophes like car wrecks and disasters that would otherwise bankrupt you.
You don’t need health insurance to pay for birth control pills, annual health exams and vaccinations. You need it in case you are in a car wreck and sent to the ER, have a heart attack or are assaulted.
The emergency room is legally required to stabilize you, but the bill will be expensive. And the emergency room visit doesn’t handle the long term costs of physical rehabilitation, follow up doctor’s visits and prescriptions.
Only Looking at the Premium and Deductible
One of the biggest mistakes people make with health insurance is looking at the premium and deductible. Many people pick the lowest monthly or per paycheck cost, not running the numbers to see what they’d pay for routine care or the expected number of doctor’s visits per year. They may ignore the deductible thinking it is irrelevant, when that’s how much they’ll owe in case of a serious incident. Look at the numbers and calculate how much you’ll likely pay with the insurance policy given your recent history. Many insurance websites have calculators to help you run these numbers and make a comparison of plans’ final costs based on expected usage.
Failing to Get Supplemental Health Insurance When You’re Likely to Need It
Health insurance is expensive, a cost that has only gone up by double digits since Obamacare passed. This makes the idea of supplemental health insurance seem ludicrous – just having a health insurance policy is expensive enough. Who could justify signing up for supplemental health insurance?
The first major group that needs supplemental health insurance is anyone signing up for Medicare. Medicare doesn’t cover your deductible, co-insurance or copayments. It does not cover long term care at all nor most dental care. It rarely covers hearing aids, routine foot care and eye exams. Supplemental health insurance helps cover the cost of what Medicare doesn’t, something you should consider as you approach retirement age and the odds of repeat or extended hospitalizations grow.
You can also sign up for specific supplemental health insurance plans like vision and dental plans if your employer only offers health insurance.
Supplemental health insurance plans can make sense if you have a high deductible health insurance plan. While it hurts to pay a thousand a month or more for an Obamacare health insurance that doesn’t kick in until after you’ve paid thousands of dollars under the deductible, a supplemental health insurance plan can help fill in that gap.
Summary
Don’t assume you don’t need insurance, and don’t base the purchase on the deductible and premiums alone. Shop around, because you cannot assume COBRA is the best deal. Understand the rules and restrictions for your health insurance plan and pick the one that fits your needs. You can sign up for supplemental health insurance to cover what your health insurance plan or Medicare doesn’t cover or add another layer of insurance to prevent a financial wipeout after a medical emergency.