The different ways in which health insurance safeguards your personal finances!
Health is something that cannot be predicted. Also, the costs of medical procedures, surgeries, prescription drugs, emergency care, and hospitalization, etc. are really high. Such costs can drain your emergency fund as well as savings and even result in bankruptcy. Moreover, if medical debt lands up in collections then it can adversely impact your credit score. Due to all these factors, it is a better option to get health insurance even if you are healthy.
Listed below are the different ways in which health insurance safeguards your personal finances as well as protects you and your family.
- Simplification of Financial Planning
Making a budget helps you to keep a track of the monthly expenses as well as direct the funds to the necessities. Health insurance decreases costs for preventive care and medications and does away with unexpected costs. It comes with a known amount that you will pay each year, thereby contributing to easy financial planning. It is important to regularly visit the main healthcare provider to keep in good health. Such trips are particularly crucial for children when they are growing and require vaccinations. Such expenses typically occur once a year and hence can be planned in the budget. But it may be noted that there are several health insurance policies that provider coverage for preventive care such as check-ups and immunizations. Thus, you do not have to keep money aside in the budget for such expenditures. Prescription drug prices are constantly rising and this can quickly total up to a big amount for people who take daily medicines. Health insurance offers discounted rates, out-of-pocket maximum, and cost sharing which can considerably decrease the monthly bill for medications. The adverse effect of continuous rise in the price of prescriptions on the wallet can be reduced with health insurance. Cost sharing and discounts make drugs affordable and compatible with the budget. It also helps free cash which can be used for other expenditures and for savings.
- Counteracting costly and sudden emergency expenses
Sudden visits to the emergency room, unforeseen medical procedures, and unexpected surgeries can wreak havoc on the budget. It may sometime be possible to plan surgeries, etc., but there is no way to plan for medical emergencies such as accidents, etc. The costs for such care can be really high for people with no health insurance. Emergency room service costs are dependent on the type of service that a patient avails. Without health insurance, a visit to the emergency room can cost anywhere between $175 and $3,200. Cost sharing and discounted rates offered by insurance can considerable decrease the cost of such unexpected emergency room visits, thereby easing the burden on the budget. Each medical procedure or surgery comes with money that needs to be paid to the doctor and other medical professionals, for anesthesia, and for use of medical equipment and/or recovery room. These costs can total up to be a very large amount.
- Savings for the future
HSA-compatible HDHP’s or High-deductible health plans are available with certain health insurance plans. You can deposit funds in an HSA for medical costs. Such deposits are cash free and the money does not lapse on year end. HSA accounts earn a nominal interest and they can be invested. At the age of 65 years, HSAs begin working like normal IRA when funds can be used for non-medical expenditures. But such withdrawals are not tax free. HSA compatible HDHPs generally feature lower premium payments. But since the deductibles are high, the insured will have to bear more financial burden to pay for medical expenses before meeting the full deductible. This plan can be a good option for people who stay healthy, do not fall ill, do not require excessive health coverage, and may never attain the deductible. Their money will instead flourish in the HSAs for use in the future.