Reasons to get health insurance in Canada | RNL Blog

A few years before 2018, if you didn't have insurance, you would have to pay an additional fee when you filed for individual benefit tax filing under the Affordable Care Act (ACA). As of 2019, the only state penalty is gone, which means there is no cost to not having health insurance, right?





It's not very fast. Even if you're young, healthy, and don't fear the tax collector, there are still plenty of reasons why buying health insurance is a smart thing to do.



Insurance reduces the cost of unexpected health bills

According to the Peter G. Peterson Foundation, the United States has some of the most expensive healthcare services in the world, and the cost of healthcare in the United States is expected to increase. The National Health Spending Account estimate that US healthcare spending will increase 4.6% in 2019 to approximately $11,582 per capita, or a total of $3.8 trillion.

When you are not insured, you find it difficult to pay any health bills on your own. If you only pay for annual checkups or a course of antibiotics, these bills may not be very high. However, if something happens to you, such as an injury or an acute medical condition such as a kidney stone, you will be responsible for all costs of treatment and care.

While medical expenses can vary widely based on your location and the type of provider you see, HealthCare.gov states that some common medical expenses are as follows:

  • Broken leg: $7,500
  • Cancer treatment: more than $100,000
  • Hospital stay for three days: $30,000

At this point, you could argue that most health insurance plans have waivers that you pay out of pocket and are billed for treatment and care before your coverage begins. This is right and wrong.

Cadillac health insurance plans are likely to get a discount unless you purchase the Platinum Plan. The deductible varies depending on the type of plan you purchase and whether you purchase an individual plan or a plan through your employer. The deductible amounts also vary if you have a family or individual plan.

If you break your leg and need a splint or other treatment and have an exemption plan, you must pay for any exemptions before your insurance will cover them. So if your exemption is $6,150—and you have no co-payments or coinsurance—and it costs you $7,500 to treat your broken leg, you pay $6,150 and insurance pays $1,350.

If you need any other medical care during that year, the insurance will bill you as long as you go to an in-network provider. If you have coinsurance or co-payments, you will still need to pay these amounts after paying the full exemption until you reach your out-of-pocket limit for the year.

However, there are cases where insurance will cancel and cover your costs even if you haven't covered your deductible yet. Insurance plans are required to cover the costs of preventive care, such as annual flu shots, Pap smear exams, and health screenings.

For example, under the agreement, the doctor may accept a $150 payment to treat sinus problems. If you still owe, you'll have to pay your deductible, but you'll end up saving $200.

Pro tip: You can also use a health vital savings account (HSA) if you choose a higher deductible plan to lower your monthly premiums. An HSA allows you to save on medical expenses while reducing your taxable income.



Insurance reduces the risk of bankruptcy

According to US courts, 659,881 non-business bankruptcies occurred in the 12 months that ended June 30, 2020. While US courts do not have data on the number of bankruptcies filed for medical expenses, CNBC reports that medical cases play a role in more than two-thirds of bankruptcies.

A 2018 study published in the New England Journal of Medicine showed an association between hospitalization and filing for bankruptcy. The likelihood of someone filing for bankruptcy tends to increase in the years following hospitalization.

Having health insurance coverage does not prevent you from paying medical bills or going to the emergency room. But it helps you avoid bankruptcy by putting an end to those bills. Most individual health insurance plans have deductibles, coinsurance, or subscriptions, with a maximum out-of-pocket payment per year.

You may also be responsible for coinsurance, which is a percentage of health care costs that you must pay after paying the full exemption. Some plans also include co-payments for certain goods and services, such as non-preventive doctor's appointments and prescription drugs.

Your plan also includes a maximum of one out-of-pocket amount for the year. Once you reach the out-of-pocket limit, all costs of in-network care must be covered by your insurance company.

For example, you have a $4,000 waiver and coinsurance of 20%. If you break your leg, the hospital pays $7,500 to your insurance company. You will pay the full $4,000 and 20% of the remaining $3,500, which is $700.

Let's say you had a really bad year and you broke your leg again. Since you already paid $4,000 for your exemption for the year, you're about to get 20% of your coin insurance in this case, which is $1,500.

However, if your plan goes over $5,000 and you pay $4,700 during the year to fix your first broken leg, you'll only have $300 left before you hit the limit. You pay $300 and the insurance company pays the balance of $7,200.

If you somehow break your leg for the third time that same year, your insurance company will bill the full $7,500 to an in-network provider.



Taking out insurance can encourage you to take better care of your health

It is a myth that health insurance is only for people who have a chronic and serious illness or who are at higher risk of illness or injury. Health insurance also applies to people who are in excellent health. If you've been in the best health of your life, buying a health insurance plan can help you stay healthy.

According to HealthCare.gov, these services fall into three categories: services for all adults, services for children, and services for women.



Some notable examples of preventive maintenance services include:

  • Cholesterol control
  • Screening for type 2 diabetes
  • HIV screening
  • Certain vaccines (such as the flu vaccine, HPV vaccine, tetanus vaccine, and chickenpox vaccine)
  • Tuberculosis examination
  • Smoking cessation services and screening
  • A folic acid supplement for pregnant women or women who may become pregnant
  • Pap smear
  • Screening for sexually transmitted diseases
  • Contraception

Having preventive services available to you for free from an in-network provider isn't just good news and fits within your budget.

For example, if your doctor orders a cholesterol test and the results show a slight increase in your cholesterol level, you can act immediately. Your doctor may recommend dietary changes or an exercise routine to help lower your cholesterol. If you wait to get tested, your cholesterol level may have continued to rise so that it can only be controlled with medication and medical care.

The longer you stay healthy, the harder it will be to work and keep doing the things you love. If a condition is caught early and treated with lifestyle changes, you don't need to take time off from work for intensive treatments.

It is also much less expensive to treat the conditions through lifestyle changes or minimally invasive procedures than invasive options such as surgery or holistic medical treatments.



What should you do if your health insurance premiums are too elevated?

The benefits of having health insurance are clear. But what can you do if paying $300 or more per month for a premium seems too high?

If the cost of monthly health insurance seems too high for your budget, you have options to lower your premium.

1. Find out if you qualify for a loan

If you purchase an individual or family plan through the HealthCare.gov marketplace, you will likely qualify for a tax credit or benefit that will reduce your monthly premium. For example, according to the Department of Health and Human Services, 85% of individuals chose a financial aid plan during the 2016 open enrollment period.

The size of your loan and whether you qualify depends on your family size, situation, and income level. According to the IRS, loans are given to people whose income is between 100% and 400% of the federal poverty line based on family size. Larger loans are available for people on lower incomes.

Some individuals qualify for a tax credit in addition to cost-sharing assistance for lower deductibles and currency insurance.


2. Select a plan with a more elevated discount

Higher discount plans usually have lower monthly payments compared to low or no discount plans. A higher deductible plan usually makes sense unless you anticipate a need beyond basic health care and preventive services in the next year.


3. Select HMO

Premiums received by HMO plans are generally less expensive than those received by preferred provider organizations (PPOs). With the HMO, you choose a primary care provider and need referrals to meet with specialists.

You also have to find out which providers are on the plan's network to get coverage. HMO plan requirements and restrictions help keep costs down.


4. Choose a disaster plan

Some people are also suitable for disaster plans. With a disaster plan, you can see your primary care provider three times a year before meeting your deductible. Preventive services are also free as part of disaster plans. According to HealthCare.gov, these plans are only for people who estimate they will need medical care in a "worst-case scenario."

Disaster plans have higher waivers than other plans—$8,550 for 2021. They're also usually for people under 30 or people in financial hardship. The premiums are usually much lower than other plan options, but they don't qualify for tax credits.


5. Regard a plan with a health savings account

Another way to help lower your healthcare costs while getting the coverage you need is to consider purchasing a plan with an HSA associated with it. HSAs are often added to health insurance plans with high exclusions. If your employer does not offer an HSA, you can set up an HSA with Lively.

Contributions you make to an HSA must be used to cover medical and health care costs. Covered costs include subscriptions or coinsurance insurance, deductibles, and the cost of prescription drugs. When you deposit money into an HSA, the amount you contribute to the account can be deducted from your taxable income for that year, which helps lower your tax bill.

The money you put into the HSA stays there until you need to use it. You can save a significant amount if you start contributing to an HSA when you are healthy.

Contributing to an HSA now means you have money to cover the cost of Medicare in the future and will help you avoid medical debt and potential bankruptcy.
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