The U.S. spends almost three times more on healthcare than any other country in the world — and that’s never been more important to remember than during an ongoing pandemic.
What’s more, even those who have decent healthcare insurance coverage may still face significant costs. But if you don’t have insurance, you could easily find yourself swimming in thousands of dollars of medical debt in the event of an emergency.
That’s why it’s so essential to take advantage of the open enrollment period, which runs until December 15 in many places. Since 82% of Americans find one extra hour of sleep to be valuable, you’ll be able to sleep well at night knowing you’re protected if you get sick or experience an injury.
However, if you’re signing up for health insurance for the first time or you aren’t able to receive coverage through your employer, what do you need to know?
It May Not Be Required, But It’s Smart
Originally, the Affordable Care Act required every American to sign up for health insurance or face a fine. While Congress did away with the individual mandate penalty on the federal level in 2017, a number of states have their own individual mandates.
If you don’t live in an area that’s affected by that, you might think you’re free and clear to simply opt out of health insurance. During an international health crisis, however, that’s not the smartest idea. Healthcare is significantly more expensive than most people realize — and if you’re already dealing with student loan debt, you probably won’t want to risk adding any more to the pile of what you owe.
Just one medical emergency could completely derail your finances if you don’t have a safety net. With so many plans available, it’s important to do your research and see what you can afford. In most cases, having at least some coverage is better than none.
Weigh Your Options
If you’re obtaining insurance through the marketplace, you might become overwhelmed with the choices in front of you. But you’ll want to look at a few main factors when determining the right coverage for you: the monthly premium, the deductible, and the co-pay.
Your premium is what you’ll be responsible for paying each month for your coverage, regardless of whether or not you actually use any healthcare services. Think of it like a subscription fee. The higher this number is, the lower your other costs (like what you’ll pay for doctors’ visits or prescriptions) will typically be.
Your deductible is what you have to pay in out-of-pocket costs before your health insurance kicks in. With some higher-tier plans, you may not need to pay a deductible for certain services; in the event of an emergency hospitalization or other urgent matter, this will probably play a more important role.
Co-pays are what you’ll pay at a doctor’s or specialist’s office for a service; it represents the small portion of the cost you’re personally responsible for. Plans with higher premiums may offer anywhere from a $15 to $30 co-pay, in many cases, while these costs will be higher if you pay less for your plan every month.
There are other factors to consider here, such as what’s listed on the drug formulary. Depending on the tier of the drug, this will determine how much you might pay for a specific prescription. You’ll also want to check whether your current doctors are within your network, as this could have major ramifications for your out-of-pocket costs.
Most people will generally need to find a balance between what they can feasibly afford to pay for health insurance each month and what they could potentially pay for healthcare services. If you’re generally healthy and don’t see a doctor more than a couple of times per year, you might be better off going with a plan that offers a lower premium and open a Health Savings Account (HSA) that you could dip into in the event of an emergency. But if you have the means to pay a little more each month and regularly visit a specialist, a higher-level plan is typically a better bet.
You Can Get Help Making Your Decision
In 2018, around 42% of 110,400 employed underwriters worked with direct insurance carriers. But when you’re choosing a plan from an insurance carrier, you don’t have to make this decision on your own.
You can actually get help for free. There are lots of online resources available to you, but you can also consult a broker or insurance agent. They’ll earn a commission on sales of plans, so you aren’t paying them directly, but keep in mind that they may not always be looking out for your best interests.
It’s often better to contact non-profit organizations or so-called “assisters,” who can help you navigate the marketplace. They’re paid by government grants, so they’re more impartial. You can find someone to help you in your local area right on the Healthcare.gov website, which can come in handy if you’re feeling overwhelmed.
The truth is that signing up for health insurance is stressful and confusing for everyone. You’ll never know in advance that you’ve made the right decision. But if you give yourself enough time to explore your options and educate yourself on the gaps in your own knowledge, you’ll feel more confident about your choice.