For many people, one of the milestones signifying that they have reached adulthood is selecting health insurance. Health insurance is certainly not something you think about as a teenager or a child, but once you become an adult, you find that health insurance is one of the most important purchases you can make. And when you have children, not only does health insurance become even more important, but you will also find that you will probably need to re-evaluate your health insurance choice. Making the right decision will be key to ensuring your financial security.
What makes insurance so important to your financial well-being? Well, without insurance, you could face some extremely large bills if you have a medical problem. Even routine coverage and care will be expensive. The cost of visiting a hospital without insurance can range from $200-thousands of dollars. Consider that is just the cost for a single visit – imagine what that looks like if you have multiple family members making multiple trips per year.
In short, if you don’t have good health insurance, you’re going to find yourself with a number of pricey bills to pay. But simply having health insurance is not enough. Once you have children, you need to make sure you have the right kind of insurance.
If you have had health insurance for just yourself, or yourself and your spouse, then you have probably had a plan that includes a high deductible but low monthly or twice-monthly payments. In fact, data shows that the number of people opting for high deductible plans has risen significantly. This type of plan makes sense for younger policyholders, because they are less likely to need to visit the doctor as often as an older person, and they are less likely to have as many emergencies as well.
But even though this type of plan makes sense for a younger policyholder, it makes much less sense for a parent – especially a new one. Your first year with your new child will be filled with doctor’s visits, regardless of whether or not the child is healthy. Even healthy kids need to visit the doctor several times to ensure they are progressing as needed. Your new baby will need at least 11 visits in the first year of life, so you can see where out of pocket expenses will pile up fast while you wait to reach your deductible. Bear in mind this is only the number of visits for a healthy child – one with a medical challenge will need even more, which means more expense if you have a high deductible plan. However a plan with a higher monthly payment will allow you to save on deductibles, so instead of waiting for copay after copay to add up to the deductible you have (which is likely thousands of dollars) you can avoid those large out of pocket expenses upfront.
The Affordable Care Act has helped shrink the number of uninsured people in the United States. In fact, there are 20.5 million fewer uninsured people in the U.S. today than there were in 2010. But the Trump administration threatens to disrupt that progress by repealing the ACA. And while the efforts to repeal it have gone unsuccessful thus far, Trump is taking whatever action he can to subvert the plan. In October of 2017, he passed an executive order that he states is designed to help make it more affordable for small businesses to buy coverage. So if he continues to damage the ACA, then many parents will need to begin looking at pricing our health insurance from other types of providers.
Do not overlook the importance of health insurance, and do not ignore the need to make sure you have the right kind of insurance for a new family. A lower deductible plan will allow you to save money on out of pocket expenses, even if the premium you pay is higher. The amount you save, particularly if there is a serious medical issue, will be meaningful. A higher deductible option may appear to offer savings on a monthly basis, but as a parent you will not want to assume the risk associated with a high deductible insurance plan.