Why You May Not Want to Skip Health Insurance

Health insurance is often something people overlook, but it’s a valuable tool when it comes to protecting yourself – both physically and financially. Whether you're young, old, healthy, or managing chronic conditions, the value of health insurance can't be overstated. With many people in the U.S. not insured, they are left vulnerable to major financial setbacks if a medical emergency arises heaven forbid.  While medical bills don’t get as much media attention as credit card debt, car loans, student loans, housing prices, or other area they do remain a big issue. So, how can health insurance help safeguard you from the unknown, and how do you pick the right plan for you and your loved ones?

Why Do You Need Health Insurance?

The short answer: It’s almost always everyone should have it. Regardless of your health status, having insurance could save you from a financial disaster if unexpected health issues happen.  Even if you’re someone who doesn’t need to see the doctor it’s possible a major issue can happen and that’s when the real protection comes.

It’s tempting to think you can skip health insurance if you’re in good health (heck, I’ve been tempted to skip it even), but that’s where the trouble lies.  What seems like a routine medical event – say, having a baby or annual checkup – can quickly rack up a six-figure bill if complications arise.  Life is unpredictable, and conditions like cancer or major accidents don’t announce themselves ahead of time. The chances of a severe health event might be slim, but they’re not zero. That’s what insurance is for: to guard against the things you can’t foresee.

Finding the Right Health Insurance Plan

Now here’s the more fun part…. Choosing the right plan! This can be a difficult puzzle, especially when you're unfamiliar with the terms. Health insurance plans typically fall into two basic categories: high-deductible health plans (HDHP) and traditional plans. Understanding the differences is key to making an informed decision.

First, let’s explain what a deductible is. This is the amount of money you need to pay for medical services before your insurance starts to contribute. A high-deductible plan usually means that you’ll have higher out-of-pocket expenses when you need care, but it often comes with the perk of lower monthly premiums. This can play in favor for some, but worse for others.

A big benefit that can come with High Deductible Plans are their eligibility for Health Savings Accounts (HSAs), which allow you to put away money in a tax-favored way to cover medical costs. For people who are relatively healthy and don’t expect much more than the occasional doctor’s visit, these plans can be a smart option.  Even if you face an unexpected health crisis, having the insurance to help against the major big bills has been financially saving for many.

Plus, opting for a higher-deductible plan can reduce your monthly premiums, while the HSA gives you a tax-friendly way to save for future medical expenses.

But if you know you’re likely to need regular medical care – such as expecting a baby or dealing with a chronic condition – a traditional plan might fit you better at least at this stage of life.  You’ll probably pay more monthly, but you could save big in the long run if you frequently hit your deductible or need to cover multiple expenses. For families, older individuals, or those managing ongoing medical needs, a traditional plan may offer the right balance of cost and coverage.

Smart Ways to Cut Health Insurance Costs

Even after selecting the best plan for your situation, you might still find the cost of health insurance to be a strain. It’s a common complaint. But while there’s no magic fix for the high cost of healthcare in the U.S., there are a few strategies you can use to make things more affordable. 

Start by reviewing all the options available to you. If you have coverage through your employer that can be a great place to get your health coverage, if the options there don’t fit your needs then you may want to shop around for alternatives outside your employer’s offerings. Be cautious, though – health share plans are sometimes marketed as cheaper alternatives to insurance, but they don’t typically have the same legal obligations and might not cover pre-existing conditions or guarantee payments so do your homework!

Once you’ve settled on a plan, make sure you know exactly what’s covered. Understanding the ins and outs of your policy can help you make more informed and cost-effective decisions. The more familiar you are with your coverage, the more you can stretch your healthcare dollars.

The Importance of Having Health Insurance

I haven’t met anyone who likes to pay for health insurance, and it’s easy to feel like you’re forking over money without getting much in return. That’s especially true if you rarely visit the doctor.  But if you’re ever one of the unlucky ones (hopefully not, but happens) who does need extensive care, that insurance could become your lifeline.  In fact, medical bills are a leading cause of personal bankruptcy in the U.S. 

Think of health insurance like a seatbelt in your car – you don’t think about it until you really need it.  When life throws you an unexpected curveball, like an accident or a serious diagnosis, health insurance can protect you from financial ruin. It’s the kind of peace of mind you can’t put a price on.

Choosing the right plan can not only help you save money but also give you access to valuable financial tools like an HSA. Most importantly, it allows you to live your life knowing that an unforeseen medical event won’t upend your finances.

Disclosure:

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy. AI (artificial Intelligence) sourced articles may be prone to error, due to the vast information they assemble from the internet. Always confirm any questions or concerns you may have with an experienced professional. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual