The Covid-19 pandemic has changed how we view our financial priorities. Now more than ever we need to take a second look at the fine print on our health insurance policies.
If your monthly health insurance bill is something you pay and forget, and if the booklet explaining your coverage went straight to the bottom of your filing cabinet, now is a good time to chat with an insurance agent for guidance.
Fair Health, an independent non-profit that collects data on health insurance claims, reported on the huge financial impact that Covid-19 could have on the average consumer.
“We found the average charge per Covid-19 patient requiring a hospital stay to be $73,300. That charge is the estimated cost for a patient with no health insurance. It’s also the cost for a patient seeing an out-of-network provider and whose health plan has no out-of-network benefit,” the Fair Health Site reported.
According to data from the Kaiser Family Foundation, a non-profit organization focusing on national health issues, approximately 10 percent of the United States population under the age of 65 has no health insurance.
Although the cost for those with insurance seeking care within their insurance covered network is still hefty, Fair Health’s data shows it is far less than those who don’t carry any insurance at all. Fair Health reported that the average estimated expenditure per privately insured patients is $38,221.
If you compare that to the $73,300 bill an uninsured patient received on average, it’s easy to see the importance of carrying health insurance.
“Health insurance is expensive, and you want to be covered and protected from those large bills from a catastrophic event and you also want it to cover your well-care and minor sickness and injuries,” said Tim Lom, Licensed Health and Life Insurance Agent and Adviser. “But to have a plan that covers everything really well is really expensive, so most people opt to find a plan that is cheaper.”
However, Lom points out, cheaper is not always better for the consumer in the end.
“You need to find a compromise in cost, coverage, and your financial exposure (max out of pocket.),” he explained. “In the end, you typically can afford to pay some toward your minor sickness and injury and your well-care, but you cannot afford paying for that catastrophic event. So, you should be concentrating on the max out of pocket on a plan to make sure you are protected.”
According to a press release issued in April 2020 by the U.S. Bureau of Labor Statistics, “Median weekly earnings of the nation’s 115.9 million full-time wage and salary workers were $957 in the first quarter of 2020 (not seasonally adjusted).”
Using those figures, it would take the average American worker over 19 months to pay back the average Covid-19 uninsured hospital bill, assuming they devoted all their earnings to that bill alone.
It is easy to see the importance of having high quality health insurance as part of a solid plan for financial stability when those numbers are presented to us.
“Some people get hung up on deductibles and copays. Though they may be important, in my opinion the max out of pocket number is the most important number besides your premium cost,” Lom explained. “It is important to have a plan that has a true max out of pocket number so no matter what the bill is, you will only owe a set amount. That set amount can be $3,000 or $20,000 depending on what you want and can afford, but when you need $1 million in chemo, you will only owe that max out of pocket number and the insurance company will pay the rest. There are a lot of cheap plans out there that are not protecting you properly and it is human nature to make decisions on price alone and that is the wrong way to look at it.”
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