Insurance policies, whether it be home, health, life or car insurance, are all meant to protect individuals and families from catastrophic financial setbacks. But you pay a lot of money for insurance, especially a healthcare plan. Statistics indicate millions of Americans forgo carrying health insurance because of the monthly cost alone. But what happens if you don’t have health insurance and need medical care?
Like car insurance, healthcare insurance is meant to have your back when the unexpected occurs. No one plans to have a car accident, just like no one plans to become ill. To understand the similarities, here is how health insurance is just like car insurance:
- You have to pay for coverage each month
- You have to pay out of your own pocket up to the deductible amount before the insurance company kicks in to pay the bills
- But, insurance covers you in case of an emergency; and
- Coverage is required by law in almost every instance
Not carrying car insurance is a risk, just like not having health insurance coverage. However, health insurance can seem like the better deal financially when you look at the differences:
- You will most likely use your health insurance more than your auto insurance during your lifetime
- More than 10 essential healthcare services are free. The only thing that might be free on an auto policy is windshield glass replacement or a rental car.
- If your child break his or her arm, you would most likely consider that more important than getting a dented bumper fixed.
- There is no penalty for not carrying car insurance unless you are caught. The penalty for not having health insurance in 2016 is steep: $695 per people per household, $347.50 per child or 2.5% of your income. Since the information is required on your tax return each year, it’s hard to escape the fine unless you can prove you are exempt from paying the penalty.
In 2014, 48% of Americans said they remained uninsured because the cost to carry a health policy was too significant. There are other disparities as well. Some individuals fall in the “Medicaid” gap because their state did not expand federal programs to coincide with the Affordable Care Act. In those states where Medicaid wasn’t expanded (to date, there are 20 of them), an individual living on $11,770 a year is required to buy health insurance at full retail price. If they made more than $16,500 a year, they would receive subsidy dollars to help cover their health insurance cost, sometimes for just $10 or $20 a month.
Being uninsured also means having less access to healthcare when it’s needed most. Emergency rooms are the only facility that are required by federal law to take an uninsured patient. Doctor offices and urgent care clinics can refuse access to individuals without insurance. If an individual is unable to pay their medical bills, many times they are denied access to providers for follow-up treatment. But that’s not the end of the story.
- Individuals without health insurance are billed at a higher rate than people with insurance, making healthcare more expensive.
- Nearly 32% of the uninsured state they have unpaid medical debt they cannot afford.
- Medical bills contribute to 52% of all debt sent to collections.
- Medical debt is still the number one cause for bankruptcy in the United States.
For the first time in decades, more Americans have health insurance than car insurance. Healthcare insurance is a vital part of everyday life, and can be affordable for individuals who qualify for cost assistance through a subsidy or through cost sharing reductions on Silver plans due to their income level. It pays to price shop and investigate what type of healthcare plan can cover yourself or your family, and help avoid not only a tax penalty, but large debt in the future.
The views expressed here are those of the author and do not necessarily represent or reflect the views of Healthcare, Inc. and HealthCare.com.