The Need for Health Insurance
Most of us would agree that good health is an extremely valuable attribute. Those in poor health generally have a lower quality of life as well as a reduced ability to work and earn an income. Good health is frequently the result of biology (the genes you inherit), the life style choices you make (exercise, diet, smoking), and appropriate medical care.
And even the healthiest among us need some medical care. Regular physician and dental visits are a normal part of maintaining good health. Accidents, illness, and simply growing older are other reasons medical care is necessary.
Paying For Medical Care
Medical care in the United Statesis, unquestionably, expensive. According to statistics compiled by the federal government, over 18% of personal consumption expenditures are directed to medical care.1 For those needing medical care, there are three basic choices:
Don’t go: Not seeking medical care when it is needed can result in small, treatable health problems becoming much bigger ones, with sometimes fatal consequences.
- Pay out-of-pocket: Paying for medical care from your own pocket can quickly exhaust your assets.
- Huge medical bills are one reason cited as a cause of personal bankruptcy.
- Health insurance: Although the premiums can be expensive, for many individuals and families, health insurance is the only practical way to provide needed medical care.
Sources of Health Insurance
There are three broad sources of health insurance in theUnited Statestoday:
- Individually owned policies: The individual or family purchases a health policy directly from an insurance company or health maintenance organization. Individual health policies can be relatively expensive compared to group health insurance.
- Group health insurance: Group health insurance is typically provided through an employer or another related group such as a professional association. The premiums for group health policies tend to be less than those for individually owned policies.
- Government programs: For those aged 65 and older, Medicare provides a base level of health insurance. Medicaid provides health care for the impoverished. The federal government has a number of programs to provide medical care to active duty and former military service members.
- Some states have individual programs to provide health insurance to low-income individuals and families.
The Choice Is Yours
While health insurance may be expensive, trying to pay medical costs out of your own pocket, or not seeking medical help when needed, can be much more expensive.
1 Source: Statistical Abstract of theUnited States: 2011. Table No. 676 Personal Consumption Expenditures By Type: 2000 to 2008.