Health insurance protects your assets from the high costs of health care. Without them, his savings could be wiped out by a medical bill of 300,000 dollars. In fact, health care costs are the main cause of failure.
It is very complicated, and many people are overwhelmed and upset by the process. Here’s a statement from health insurance, and how it became the dominant supply vehicle for health care in the United States.
Why you need health insurance
You need Health insurance unless you are very rich, over 65 or very poor. The rich can also afford exceptional emergency or chronic medical care. People over 65 paid for medicare. The poor can qualify for Medicaid.
Everyone should take out health insurance or risk medical failure. As is customary, many people have lost sight of their underlying purpose. It’s like insurance for your car, your house or your apartment. You are supposed to protect your life savings from the devastating costs of a serious accident, medical emergency or chronic illness.
But unlike other insurance policies, health insurance allows you to get this health care when you need it.
How choose health insurance
Health insurance companies offer many possibilities. But before you decide on a plan, you’ll need to go through various combinations of deductibles, co-payments, co-insurance, and premiums.
- Monthly premiums. Like car insurance or homeowners, you pay even if you never make a claim. This provides cash flow so that insurance companies can pay the daily expenses.
- Franchising. That’s what you pay before the insurance pays a penny. The deductibles can range from USD 500 to USD 10,000 or more per year. The lowest deductibles are only available on company-sponsored plans. They are annual, which means that you start again every year on January 1.
- A co-payment for each visit. A typical co-payment is 20 dollars for a doctor’s visit, 50 dollars for a hospital visit and 10 to 40 dollars for each prescription. You pay 100% for the visit as long as the deductible is respected.
- Co-insurance. This is a percentage you pay for procedures such as surgery or hospitalization. When the doctor visits her in the hospital, she can make a co-payment for the visit and co-insurance for the hospital stay.
Why do insurance companies require deductibles, co-payments and co-insurance? They want to stop you from singing to the doctor for every smell. They feared that their costs would skyrocket if health care was 100 percent free. Under the Affordable Care Act, these costs cannot exceed a maximum of 6,600 dollars for individuals or 13,200 dollars for a family. After that, the insurance pays 100 percent.
All these options make the choice of health insurance very complicated. You have to be a trustee for your health.
For example, you are willing to pay a higher monthly premium for a lower percentage of co-insurance and/or a lower deductible. It would make sense if you have a chronic disease, such as diabetes, and you know that you often go to your doctor.
On the other hand, healthy people may want the lowest possible premium and higher deductible. They are willing to take the opportunity to pay more for health care because they believe the chances are slim. The lower the deductible, the higher the premium, share or co-insurance. As health care costs rise, more and more people are opting for higher deductible plans just to keep their monthly premiums affordable. Obamacare has failed to fix this underlying flaw in the health insurance system.
Why the U.S. relies on health insurance to pay for health care
Before World War II, most Americans did not have health insurance. The existing policies only covered the costs of the health room and the pension. After the war, the federal government imposed a wage freeze to curb inflation. But that meant companies couldn’t give increases to get the best employees. Instead, they offered benefits, including health insurance.
In 1954, the Internal Revenue Service collected non-taxable health insurance premiums. This has made an additional dollar of health insurance more valuable than a taxable dollar. The Tax Policy Center estimates that this tax exemption alone increases the US deficit by USD 250 billion per year. But politicians are unlikely to be re-elected if they propose eliminating them.
This is all the more true because this tax exemption is effective when it comes to providing a state insurance subsidy to the upper middle class and the rich. The Tax Policy Center found that the average tax-free health insurance allowance for a family in the 15 percent tax bracket was about .281. But the benefit is 374 dollars for those in the 25 percent tax bracket.
Alternatives to health insurance
Many countries are committed to universal health care. Here, the government pays for health care, education and defense. It’s like extending Medicare or Medicaid to everyone. When the French or Germans go to the doctor or the hospital, the government collects most or all of the bill. The downside is that it takes a long time to see a specialist or to get emergency surgery. On the other hand, no one has to worry about dying from a disease because they cannot afford treatment.
When Hillarycare tried to introduce universal health care in the United States, the medical profession and health insurance companies beat her. Obamacare was originally introduced as universal health care. But the insurance companies have changed it to one that depended on their products.
An alternative to health insurance is self-payment. If people were to pay for their health care, they would negotiate the price to get the best deal. This would reduce the cost of health care in general. You could borrow for expensive procedures, such as making a car or a house. they would have cared more about their health to prevent preventable diseases such as diabetes.
On the other hand, it could force low-income people to choose between food and medicine. Access to health care is now part of today’s American dream. Research has shown that the higher your income, the better your health.