Eventually, you’re going to have to ask the inevitable question:
“What do you do about health insurance?”
I hear this question constantly. Health costs are the monster on everyone’s mind.
Normally a person gets health coverage through their boss. How do you insure yourself if you lead an unconventional life?
How Much Can You Spend?
Once upon a time, I thought health insurance was supposed to pay every penny related to health care.
A few years ago, I figured this out: Health insurance isn’t necessarily supposed to pay for your flu shots and teeth cleanings. It saves you from a financial catastrophe related to illness or injury.
Do you follow?
The insurance companies aren’t saying, “Pay me $X and you’ll never spend a dime on a flu shot.”
They’re saying, “Pay me $X and I’ll protect you from six-figure debt.”
You’re not insuring your health. You’re insuring against bankruptcy (or steep debts) due to medical reasons.
Health insurance isn’t supposed to pay for your stomach ache. It’s designed to protect you from serious financial ruin if you’re hit by a truck.
This mental shift makes a huge difference.
Don’t hunt for a plan that spares you from every dime of health spending. Look for a catastrophe-only plan that protects you from going broke in the event of a cancer diagnosis.
I use eHealthInsurance to compare prices. This site lists plans from a huge range of providers. You can set your search criteria based on the premium, the deductible, co-pay, and the yearly out-of-pocket maximum. You can also search based on the insurer’s ranking and popularity.
Long before I ever boot up my computer, I ask myself: “If I got hit by a bus, how much could I pay?”
Voila – that’s my “ideal” deductible.
Here’s what happens too often: A young, healthy person gets a policy with a high deductible and low monthly payments. They reason, “This is worst-case-scenario insurance. I’ll pay for small stuff out-of-pocket.”
Something minor happens: a rash, a violent stomach ache. Any normal person would head to the doctor. But the healthy person with the high deductible says, “I’ll just stay home and look this up on WebMD.”
Then they spend $65 on their cable TV bill.
This is penny-wise and pound-foolish. If you buy a policy that requires you to pay for small expenses out-of-pocket, follow through.
The greatest hurdle is psychological. While I was at my cushy newspaper job, I felt assured knowing I had … something adequate. Maybe. I hope.
You see, I never paid attention to the details of my employer-provided health insurance plan. I assumed – as many people do – that if my insurance is through my company, it must be good. My pseudo-logic went like this: My employer is stable. Therefore, his health insurance must also be stable.
Psychologists call this the “association fallacy.”
I call it “not reading the fine print.”
Fortunately I never got sick, so I never put this assumption to the test. But in hindsight, I’m struck by how many years I spent making a massive – and potentially costly – assumption.
You’re fortunate that you get to CHOOSE your own health insurance. Shop around for something that custom-fits your lifestyle.
The Bottom Line: Health insurance is a big-ticket item, so shop around. Finding an insurance plan that saves you $100 a month is a better use of your time than saving 10 cents at the grocery store.
Your time is limited. Don’t waste it pinching pennies. Go after the “big wins” — including awesome health insurance.
Photo courtesy Army Medicine.