How Health Insurance Plays A Role In Your Personal Financial Plan

It’s always good to have a financial plan–a fiscal blueprint that provides you with a step-by-step path to your monetary goals. Something to strive for. A plan of attack.

But what happens when an unforeseen obstacle pops up, blocking your path? Without adequate safety measures in place, you could find your goals, suddenly, nowhere in sight. Completely out of reach.

Thankfully, you can protect yourself against many of these roadblocks. And one important way to do this is to secure the right type of health insurance.

A Healthy You is an Earning You

Despite the Affordable Care Act’s attempts to ensure that all Americans obtain health insurance, approximately 30 million remain without coverage. Not only does this mean that their financial wellness could be jeopardized by an unexpected accident or illness, but it also means that they are less likely to seek preventive health care measures that could preserve their long-term health.

Under the ACA, plans that have not been grandfathered must offer ten essential benefits–many of which are designed to safeguard the individual’s health and promote the early detection of illness. Forbes’ “Essential Health Benefits Under the Affordable Care Act” states that these mandatory categories of coverage include “Ambulatory Patient Services, Emergency Services, Hospitalization, Laboratory Services, Maternity and Newborn Care, Mental Health Services and addiction treatment, Rehabilitative Services and Devices, Pediatric Services, Prescription Drugs, and Preventive and Wellness Services and Chronic Disease Treatment.

Without access to covered laboratory testing and wellness programs, uninsured individuals put themselves at greater risk for health problems. These problems could translate into lengthy absences from work, decreased hours, or, perhaps, having to abandon the workforce completely–all of which mean a significantly lower earning potential. Lower earnings mean less money to put towards your goals. And a decreased ability to see your plan through to the end.

A Nasty Break Could Leave You Broke

According to Today’s “Biggest Cause of Personal Bankruptcy: Medical Bills,” roughly 1.7 million American households filed bankruptcy in 2013 due to medical bills, making health care costs the largest contributor to personal insolvency. The best way to protect yourself from suffering this same fate is to ensure that you have the most suitable health insurance coverage for your given health and financial situation.

And, do not delude yourself into thinking that one’s youth and high level of physical fitness will protect you from astounding medical costs. One accident or nasty viral infection could wind up draining your bank accounts at an alarming rate. No one is indestructible.

For instance, your appendix could burst. The Business Insider’s “This $55,000 Bill is the Perfect Example of Our Broken Hospital System” presents the case of a Sacramento resident’s appendectomy stay resulting in over $55,000 in medical expenses. That’s a big chunk of change for most people. And, according to the Huffington Post’s “Six Charts that Illustrate Just How Much Higher Health Care Costs are for Americans,” in 2013, the average daily cost of a hospital stay was $4,287–and it can be more than twice that amount. That can add up to a substantial bill in very little time.

You Could Qualify For Tax Credits

If you live in fear of a hefty health insurance premium, you may be in for a pleasant surprise. Thanks to the Affordable Care Act, several states have expanded their Medicaid program, which means that you may now qualify. There is an Obamacare Medicaid Expansion that can help you find out if your state has opted to participate in this expansion and get more information about qualifying.

Even if you do not qualify for Medicaid, you may be able to receive a tax credit or subsidy when purchasing insurance sold through the Health Insurance Marketplace, otherwise known as the Exchange. A visit to the Obamacare Subsidies page will provide you with all of the information you need to determine how much you and your family qualifies for, including a link to a handy subsidies calculator.

So, not only may you be able to purchase health insurance at an affordable price, but by doing so, you will be able to prevent several massive stumbling blocks from hampering your financial success. “Bye, bye” chronic condition that could have easily been prevented by regular check-ups. And, “Adios” crippling emergency room visit bills. Thanks to your health insurance policy, your path is clear and your monetary goals will come to fruition.

If you are currently uninsured and need gap coverage, you will want to check out “How Short-Term Health Coverage Can Keep You from a Financial Catastrophe.” You will be glad you did.

Kimberley Laws is a freelance writer, avid blogger, and former Personal Banking Account Manager. You can follow her at The Embiggens Project.

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