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How To Ruin Your Life Financially – Don’t Carry Health Insurance

I recently wrote about 17 ways to ruin your life financially.   Many of you shared some additional ways too – and they were great!

It is important that we circle back on a few of these because I am passionate about a few of these.   One of them is health insurance.

According to The American Journal of Medicine – more than 50% of all bankruptcies are due to medical bills.   In their report HERE, most of those who filed for bankruptcy were middle-class, well-educated homeowners.

Seriously, with a 100% mortality rate, the chances are pretty high that someone in your family will get ill.   If you do not have health insurance, you are positioning yourself to fail financially instead positioning yourself to prosper!

If you don’t have insurance, GET A QUOTE, find out the cost, and at least get major medical coverage!

Do you have any horror stories of not having health insurance?

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SERIES: Health Insurance – Part Five – The COST Of Not Carrying Insurance

Over the past 21 months, my family has participated in a wild ride with health insurance.   The experience has been enlightening, incredibly frustrating, annoying, confusing and intimidating.   Can I get an Amen! and a witness?!?!   In this series on health insurance, I am going to share my experience AND some helpful tips on saving money on health insurance.

Part Five The COST of not carrying health insurance

This series started out with me sharing my story of dropping maternity insurance coverage only to discover 16 days later that our baby boy was already on the way.   I got the joy of paying about $7,500 extra.

There are several COSTS to not carrying health insurance, some are obvious – others not so much:

  • Monetary penalty This is obvious, of course.   I only had to pay $7,500 extra for my debacle.       I say “only” because I have seen SO MUCH WORSE!   A heart attack costs many multiples of what I had to pay.   Accidents do happen.   My twin brother is an ER doc – and every single day he sees people that are experiencing a life-altering health care crisis.   With a 100% mortality rate, I would say the chances of you or a family member experiencing a large health-care bill in the next ten years is very high.
  • Emotional Stress I meet with people in 1-on-1 financial coaching session all of the time.   One of most common causes of unbelievable stress is unpaid medical bills that were incurred without insurance coverage.   In some cases, the stress has become so great that people begin to lose hope and despair of ever winning with their finances – and it ALL could have been avoided if they had just carried health insurance.
  • Avoid necessary care/Delay visits to doctor When a person does not carry insurance (or do not have money to cover their deductible), they will avoid going to the doctor or emergency room.   Now, in some cases, this is a good thing.   The financial penalty has reduced the number of people going to the doctor for a hangnail.   But in many other cases, people have avoided a doctor’s care for necessary and sometimes urgent care.

What are some other costs you can think of that are a result of NOT carrying health insurance?

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SERIES: Health Insurance – Part Four – Ways To Save

Over the past 21 months, my family has participated in a wild ride with health insurance.   The experience has been enlightening, incredibly frustrating, annoying, confusing and intimidating.   Can I get an Amen! and a witness?!?!   In this series on health insurance, I am going to share my experience AND some helpful tips on saving money on health insurance.

Part Four Ways to save on health insurance

I need health insurance, but I don’t want to have to take out a small business loan to pay for it!   Here are some key ways that I have saved on my health insurance.

Increase the deductible By increasing the deductible, I have assumed more personal risk and decreased the risk being carried by the insurance provider.   This means that they can offer a much lower premium to me.   In chapter 12 of my book, I Was Broke. Now I’m Not., I share how I compare insurance policies using the premiums and deductibles to see which one is the best financial decision.

Live a healthy lifestyle In a large group health insurance plan, you are automatically admitted to the insurance plan.   In an individual plan, you will be accepted/charged according to your personal health history.   We can’t control all of our health, but by controlling what we can, we can have a healthier life and better rated insurance premiums.

Go to work for an employer with group health insurance coverage If you can not obtain coverage or you have health history that is hurting your ability to obtain affordable insurance, obtain a job that offers group health insurance that does not have a clause that excludes your pre-existing c0nditions.

Don’t work, be a complete slob, and live life on the government dole Be broke.   Don’t be productive.   Save nothing.   Go to the hospital and rack up HUGE charges and let all of us tax-paying, law-abiding, hard-working citizens pay it for you.

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SERIES: Health Insurance – Part Three – Group Plans

Over the past 21 months, my family has participated in a wild ride with health insurance.   The experience has been enlightening, incredibly frustrating, annoying, confusing and intimidating.   Can I get an “Amen!” and a witness?!?!   In this series on health insurance, I am going to share my experience AND some helpful tips on saving money on health insurance.

Part Three Group Plans (even when you are an individual)

Sometimes group plans are less costly and offer better benefits than individual policies – and individuals sometimes have opportunities to participate in a group plan if they are part of a network or business group.   For example, I am part of my local Chamber of Commerce.   They offer the opportunity for me to participate in a group health insurance plan.   Small business networks, home builder groups, and other membership organizations will offer group health insurance to their members.

It gets even better when you can obtain lower premiums by obtaining group health insurance AND it is a High Deductible Health Plan (HDHP) with a Health Savings Account (HSA) – which was Part Two of this series!

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SERIES: Health Insurance – Part Two – HDHP with HSA

Over the past 21 months, my family has participated in a wild ride with health insurance.   The experience has been enlightening, incredibly frustrating, annoying, confusing and intimidating.   Can I get an “Amen!” and a witness?!?!   In this series on health insurance, I am going to share my experience AND some helpful tips on saving money on health insurance.

Part Two High Deductible Health Plan with Health Savings Account (HSA)

I was first introduced to a high deductible health plan (HDHP) with a health savings account (HSA) when I was an employee.   My first reaction was, “My deductible is that HIGH?!!”   Upon further review, I found out that it was a terrific deal – for me as an employee as well as my employer.   Let me explain how a HDHP with a HSA works.

  • High Deductible Health Plan (HDHP) According to IRS publication 969, the minimum deductible eligible for establishing an HSA is $1,200 for an individual and $2,400 for a family.   In other words, the insurance policy must require the covered individual or family to pay the deductible before the insurance company pays any health care costs (with some exceptions related to preventive care – see IRS Publication 969)
  • Health Savings Account (HSA) This is a savings account that you can establish at a bank that is used solely for paying for health care expenses.   I have established my account at a local bank.   Each year, I am able to contribute an amount equal to the annual deductible of my insurance.   Here is the GREAT NEWS – whatever I contribute to my HSA is tax-deductible!   This saves me TONS of money!   Additionally, the money I have in my HSA is not a “use-it-or-lose-it” account.   If I do not use all of the money I have placed within my HSA, the money remains in my account until I actually need it.

As I have embarked onto this crusade full-time, I have had to obtain my own individual insurance policy.   HDHP with HSAs were by far the best option for my family.   We checked out the rates at eHealthInsurance and a local insurance agent.   The rates were the same, but using eHealthInsurance I was personally able to easily compare policies.

A HDHP is less costly to the insurance company because they substantially decrease their risk by forcing the consumer to shoulder the burden of the initial deductible.   For most people, this causes them to avoid running to the emergency room every single time there is a health care need.   Because the individual is going to have to pay for the entire ER visit, they become what I call a powerful person – an INFORMED and AWARE consumer!   This means that the individual will instead go to an urgent care facility which will charge less than 1/4th of the cost of an ER visit.   This is better for the individual AND the insurance company – and results in a lower premium.

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SERIES: Health Insurance – Part One – Intro

Over the past 21 months, my family has participated in a wild ride with health insurance.   The experience has been enlightening, incredibly frustrating, annoying, confusing and intimidating.   Can I get an “Amen!” and a witness?!?!   In this series on health insurance, I am going to share my experience AND some helpful tips on saving money on health insurance.

Part One Introduction

If you have been a regular reader of JosephSangl.com for awhile, you know that our family has witnessed an incredible miracle over the past year with the arrival of our son, Keaton.

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He showed up after ten years of trying for a second child – including an IVF attempt.   By a miracle of God, Keaton showed up.   By the ridiculous nature of health insurance, we got to pay thousands of dollars in medical bills.

In fact, I wrote about it in my Sunday newspaper article.   I will let that article be the introduction to this series.   I know that it is a bit long, but I think it really sets up this series well.

One Man’s Wild Ride With Health Insurance – Sunday, 8/2/2010 – Anderson Independent-Mail

There have been enormous amounts of discussion, writing and conversation regarding health insurance reform.   A health care bill has now been passed through Congress and signed into law.  Call me crazy, but when 100-percent of one party is against a bill while nearly all of the opposing party is voting for a bill, it is not in the best interest of the American people.

Most Americans have a health insurance story to tell.  Today I want to tell you my wild journey with health insurance over the past 15 months.   In June 2009, I embarked full-time into this crusade to help others accomplish far more than they ever thought possible with their personal finances.   This meant that I was going to be giving up health insurance from my employer, who had an exemption from providing COBRA benefits.   This is where my problem began.   Because I would be unable to continue insurance via COBRA, I had to find new insurance immediately.   I attempted to obtain an identical individual health insurance plan which included maternity coverage.   The insurance company informed me that because I was purchasing an individual policy, I would be required to start at the beginning to obtain full maternity coverage benefits.   In other words, they would only pay 5-percent of maternity costs if a pregnancy occurred in the first year, 60-percent in the second year and 80-percent in the third year.   Only after four years of paying premiums would I be provided 100-percent coverage for maternity.

The insurance provider established this requirement even though I had maintained (and paid huge money for) full health insurance coverage with maternity benefits included for the previous thirteen years.   They established this requirement even though I had held coverage with their exact company for the previous three years!

Truth be told, my wife and I had given up on having a second child.   It had been ten years since the birth of our only child.   Instead of paying for extremely costly maternity insurance that would provide little payment toward a pregnancy, we opted out.   Guess what happened next?   Of course!   We discovered we were expecting a child just sixteen days after our new policy went into effect.

Our perfect new little boy arrived in February.   We saved substantial money by negotiating on our own with the hospital and doctors and paying within 30 days of receiving the final bills.   The fact that insurance companies would not recognize previous maternity coverage and extend 100-percent coverage from day one ultimately cost us around $7,500.

My experience has made me understand even more the need for continued health care coverage reform.   Even more, I realize how blessed my family has been to be able to pay for our medical bills.   Many people can not withstand such an unbelievably high financial penalty.

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In this series, I will be sharing some key wagon staplers – tools that I believe are essential to keeping one stapled to the wagon – because we all have the potential to fall off the wagon – these wagon staples’ will help keep you on the wagon even in your moments of weakness!

Part Five Reward Yourself For Victories!

It is extremely important to establish key milestones in your financial journey and celebrate as each goal is accomplished!   If you are in an incredible financial mess and are just getting started on your financial journey, make sure you reward yourself for the small (but extremely important) victories.   Victories when you are just getting started out include:

  • Not using the credit card for an entire month
  • Preparing a budget and following it for an entire month (we offer several free ones – they are located HERE!)
  • Getting completely caught up on your bills – no late payments!

Of course, the celebration/reward needs to align with the goal that was accomplished.   Maybe the beginner celebrations would be going out to eat at McDonald’s and using the Dollar Menu.

As you make progress, the celebrations can be greater.   Here are some examples.

  • Paid off all non-house debt! REWARD:   Use the payments you used to make for debt to fund a weekend getaway
  • Hit $100,000 net worth REWARD:   Give $1,000 to a non-profit that you care about greatly
  • Pay off the house! REWARD:   Throw the biggest blow-out mortgage burning party ever and then depart for a 14-day trip to Costa Rica.
  • Pay cash for a new car! REWARD:   Drive the car on scenic three day trip and stay at a different Bed & Breakfast each night
  • Hit $1,000,000 net worth REWARD:   Buy a ski boat and give away the same amount to a cause you care about greatly
  • Pay for kid’s college in cash REWARD:   See your child start out life with ZERO debt AND go visit them regularly and take them and their friends out to eat at really nice restaurants!!!

I can go on and on and on and on … with this subject because I know that encouragement toward goals is what helps us stay on the wagon the most!

QUESTION FOR THE READERS:   What rewards have you given yourself for “staying on the financial wagon” and achieving your goals?

I hope this series has been helpful to you!   If you did not get a chance to read all of the posts, you can click the link below to read them.

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