It’s hard for me to rationalize paying double for a product or service unless I find some value in paying that premium. There has to be some upside, otherwise, I will go without.
I ask myself these types of questions to consider my options:
»» Is there an alternative product that will give me a similar effect?
»» Is this service worth paying extra for?
»» Can I get by without X, Y, or Z?
»» Why is adulting so hard? Well, maybe not this one, per se.
Generally, I am brand loyal to a certain extent. Though, if the prices start getting ridiculous – I’m out.
Most. Of. The. Time.
This time it’s different. I will give you a rundown as to why my health insurance nearly doubled, but I still paid it!
My Health Insurance Nearly Doubled
I have essential costs each month that I have no choice but to pay. Some of the categories in this bucket include the usual suspects:
- health insurance
When I was working a full-time job, the cost of health insurance was shared with my employer. Those were the days – paying the $35/per pay period for a high-deductible health plan (HDHP). That seems like a great deal at this point. Until I find a job with a company that will help me pay for my health premiums, I have to pay it myself.
When I first started paying for health insurance on my own accord, it cost $173/month. I had the “luxury” of paying this for 5 months at the end of 2016. When I renewed the policy for 2017, there were changes to the ACA which increased costs across the board.
This increase nearly doubled my monthly healthcare premium from $173 to $317/month.
For 2017, I paid in over $3k for a bronze PPO plan that had a $6,800 deductible. Yeah, I know, but it could be worse.
The sad part about this whole thing is that the plan has a “high-deductible”, but it did not qualify for a Health Savings Account (HSA).
If you are new to learning about the HSA, it’s an account that can be funded with pre-tax dollars and has a range of advantages. In order to qualify for this account, you have to enroll in a qualified HDHP. The purpose of the HSA is to help pay for health insurance expenses – but that does not include health premiums (unless for certain purposes, in this case, I don’t qualify for).
My health plan through ACA was not compliant according to IRS standards. Therefore, I wasn’t allowed to contribute to an HSA. There are limits for the maximum allowable deductible, which for 2017, it was $6,550 (individual plan with in-network services).
[My Deductible = $6,800 > Max Deductible per IRS for HDHP = $6.550]
In other words, my deductible is higher than allowed!
Plus, if my health plan had additional services other than preventative care (before meeting the annual deductible), then it would also not qualify as an HDHP. In my case, my ACA plan exceeded the allowable amount of $6,550, so I didn’t need to look any further to see if I qualified.
Related article: Health Savings Account (HSA) – The Super Benefits!
Were There Any Alternatives?
Well, one would say, did you have any health alternatives? You’re married, why not enroll in Mr. FTD’s (aka hubs) plan?
Good questions. I definitely would if it didn’t end up costing me more. It would have cost me around $125 more for basic coverage on his plan. That would have been over $400/month.
Additionally, since I had an option of health insurance through Mr. FTD’s employer, I was disallowed any subsidies for my ACA healthcare. Alternatively, let’s say I didn’t have his health plan as an option – the subsidy would have taken my costs down to under $50/month. Boo!
Generally, health insurance is not affordable if you don’t have it through an employer that pays a portion of it. This is one of the reasons why people feel the need to keep working – to cover those costs.
Why I Pay For Health Insurance
Here’s why I ended up always paying that $317/month for health insurance.
Frankly, the alternative is living without coverage, which in the case of an accident or illness could lead to devastating effects, not just for my livelihood, but for the finances as well. The costs sustained from an injury or an illness can completely ruin one’s financial life.
Health needs are one of those areas that is a future uncertainty. There is a high likelihood that coverage will be needed at some point in the future as I continue to age into the next 50, 60, 70 years. At that point, I will breathe a sigh of relief that I have coverage.
I may find myself complaining about paying monthly healthcare expenses nearing my mortgage payment, but I refuse to go without health insurance. I may have contemplated it a few times during this past year, but that was just my frugal self coming out.
For instance, on my recent 8-hour round-trip drive to a large city, I kept envisioning the possibility that I might get hit by a car. This may have resulted in getting injured to the point where I would have to spend days, weeks, or even months in the hospital. I have an overactive imagination, I suppose.
According to healthcare.gov, the average cost for a 3-day hospital stay is around $30,000.
That would equate to $10,000/ day for hospital stays, aside from the actual costs of care. Personally, it’s terrifying enough just thinking about the likelihood of injuries, but having the thought of no health insurance as a backup makes it even more frightening.
You want to know about something that did happen to me?
It was on January 1st, 2017. To preface, I sometimes make resolutions. Crazy, right? On that day, Mr. FTD and I decided to go on a hike in the mountains. Well, clumsy me, I fell and hurt myself in the middle of the hike. Specifically, it was my ankle. Normally it would be fine, just let it rest until it gets better. Not in this case, we were in the middle of the woods.
There was no way I was calling a medevac. No freakin’ way! That could have cost $25,000! Instead, I half-limped and got half-carried until I made it to the end, which was about 2 hours later. During that time, while Mr. FTD carried me, I could be heard repeating “$6,800 deductible, $6,800 deductible” – just to reiterate the severity of the situation and how dropping me could make it worse.
The moral of this story is this. Things happen, likely outside of my control. Though, sometimes in my case, clumsiness can be a problem. Having health insurance eases my concerns about future occurrences that could be far worse.
The Outlook For 2018
It’s that time of the year for annual enrollment, which in my case rolled around on November 1. Oh, yay.
Of course, I applied through the ACA, because it’s still up in the air if I will land a new role in the coming weeks. Here’s what it looks like – the premium increased from $317 to $349. The plan I have now has a higher deductible which is around $7,000. It’s safe to say at this point that my health insurance doubled from the original $173 – but you know I will pay it anyway – begrudgingly.
The Bottom Line
Health insurance is a necessity to protect yourself and your assets when the unimaginable happens.
It’s necessary for debilitating conditions that could set you back hundreds of thousands of dollars, as well as being available for the basic needs of check-ups or preventative measures.
It makes paying the monthly premium feel slightly better if you think about it like this: your home insurance is there to protect yourself in case your home is damaged or destroyed, so you are able to rebuild without going into bankruptcy.
The same applies to health insurance, which is there to protect yourself in case your body undergoes injury and illness. Consider covering the bases that can foreseeably affect your financial health, and proceed with what makes sense in your life.
Read more about my mission HERE.
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What are your thoughts on this topic? Will you be paying for health insurance no matter what? Please share your views in the comments below!