Why Is Health Insurance Important? Protection From High Medical Costs
Health insurance helps protect you and your family from unexpected and potentially overwhelming medical expenses.
Shanti
9/19/20262 min read
Why Is Health Insurance Important? Protection From High Medical Costs
When people are healthy, they may wonder why they should pay a monthly premium for health insurance they may not use very often. However, one of the most important reasons to have health insurance goes beyond simply helping with the cost of doctor visits or prescription medications.
Health insurance helps protect you and your family from unexpected and potentially overwhelming medical expenses.
An accident, serious illness, or hospital stay can quickly result in medical bills that may be difficult for many families to afford without insurance.
Medical Costs Can Be Much Higher Than You Expect. Health care costs in the United States can add up quickly.
For example:
Treatment for a broken leg can cost up to approximately $7,500.
The average cost of a three day hospital stay can be around $30,000.
Comprehensive cancer treatment can cost hundreds of thousands of dollars.
Without health insurance, being responsible for these expenses can create significant financial pressure and, in some cases, lead to substantial medical debt or other serious financial difficulties.
How Does Marketplace Health Insurance Protect You?
Marketplace health insurance plans provide several important protections against high medical expenses.
1. After the Deductible, Your Insurance Company Helps Pay for Covered Care
A deductible is the amount you generally pay for covered health care services before your insurance plan begins paying its share of many covered expenses.
For example, if your plan has a $1,000 deductible, you may need to pay the first $1,000 of eligible covered medical expenses yourself.
After that, depending on your plan, the insurance company pays a portion of covered expenses and you generally pay your share through coinsurance or copayments.
This is why you should not choose a health insurance plan based only on its monthly premium. The deductible, copays, and coinsurance can also have a significant impact on how much you actually pay for health care.
2. The Out of Pocket Maximum Protects You From Very High Costs
One of the most important features of health insurance is the out of pocket maximum.
This is a limit on the amount you are responsible for paying during a plan year for covered services that count toward this limit.
For example, if your plan has a $3,000 out of pocket maximum and your eligible deductible, copays, and coinsurance reach that amount, your health plan generally pays for covered services for the remainder of the plan year according to the terms of your policy.
This protection can be especially important if you experience a serious illness, major accident, or other costly medical situation.
3. No Annual or Lifetime Dollar Limits on Essential Health Benefits
Marketplace health insurance plans cannot place annual or lifetime dollar limits on the amount they pay for Essential Health Benefits.
These benefits include important categories of health care such as hospital care, doctor services, prescription medications, maternity and newborn care, and mental health services.
This protection can be particularly important for people facing serious or long term medical conditions.
Health Insurance Is Not Only for When You Are Sick
The purpose of health insurance is not to make sure you receive more in medical services every year than you pay in premiums.
Health insurance is primarily a form of financial protection against risk.
You may remain healthy for years and use very little of your insurance coverage. However, an unexpected accident or diagnosis of a serious illness can change your circumstances very quickly.
Having appropriate health insurance coverage can help prevent a medical problem from becoming a financial crisis for you and your family.
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