This is Part II in a series called Health Insurance for the Self-Employed: When doing what you love doesn’t come with health insurance. The posts in this series focus on the importance of health insurance and finding, evaluating, and enrolling in individual health insurance. I’ll also discuss strategies to save money and different ways to access health insurance or find health care.
I considered going without health insurance once.
It was the summer after my senior year of college. My first job wasn’t starting until September and my student health insurance ended that June. After reading more, I learned how incredibly risky that would be. So I found an individual policy online for about $60/month. I signed up for the month-to-month plan that I canceled at the end of that summer.
I ended up never using it, but the peace of mind was worth every cent of the monthly premium.
There is no question in my mind that health insurance is important. The number one cause of bankruptcy in the U.S. is unpaid medical bills.
Unfortunately, having health insurance in the U.S. does not protect one from bankruptcy from high medical bills. In a 2007 survey of over two thousand bankruptcy filings, 75% of people who filed bankruptcy due to medical expenses had health insurance. That fact is incredibly infuriating, confusing, and sad.
But there are actions we can take to lower, if not eliminate, our chances of financial meltdown, such as having adequate health insurance and long-term disability insurance – a topic of a future post.
The following are questions I’ve asked myself to prepare for self-employment and no longer having employer-sponsored health insurance:
Why is it important to enroll in health insurance? Medical emergencies happen to everyone. Even to those who are healthy. By enrolling in a health insurance plan, you are pooling your resources (and risk) with all of other people who are also enrolled with your insurer. Insurance helps mitigate risk amongst a large group of people because not everyone will need to access the resources at the same time. But when one person in the group needs helps, the insurance is there.
Health insurance could mean the difference between paying a monthly premium and up to an annual maximum versus the full price of medical services.
What is the full sticker price of medical bills without health insurance? Here’s a sample of average costs of different services and procedures. I found these using the Healthcare Blue Book, a guide to fair healthcare pricing in the U.S.
- office visit with a physician for 10 minutes, $68 per visit
- physical therapy evaluation, $135 for the first visit and $72 for each follow-up
- individual mental health counseling for 40-50 minutes, $173 per session
- in-hospital treatment for acute leukemia with eleven day hospital stay, $35,712
- coronary bypass surgery with ten day hospital stay and anesthesia, $63,648
- one emergency room visit for a minor to a life-threatening problem, $431 to $3495, prices do not include staying overnight in the hospital
Another resource for finding the fair price of various health care services is Fair Health Consumer.
Listing the prices above is not meant to scare you. I just want to underscore the importance of insurance.
You may be able to negotiate hospital bills. And hospitals may offer discounts or payment programs for people without health insurance. But a fraction of an expensive medical procedure may still mean tens of thousands of dollars in medical bills.
In the next part of this series, I’ll explore the cost of health insurance and what to look for in an appropriate policy for you.
Other posts in this health insurance series:
Part II: Why enroll in health insurance? (current post)
Part III: How much does health insurance cost? (upcoming post)
Part IV: 8 ways to save on health insurance or health care (upcoming post)