Healthy Con$equence$

Key Takeaways

  • Medical bills are the number one reason for personal bankruptcy, so take a look at your health insurance options before deciding against coverage.
  • Health insurance helps defray the costs of medical care and is provided through your employer, or bought personally through health care exchanges.
  • Premiums, deductibles, co-pays, and the option for dental and vision coverage are all costs associated with health insurance.
  • Flexible Spending Accounts and Health Savings Accounts are both great tax-advantaged health insurance options.

In 2010, President Obama signed in to law the Patient Protection and Affordable Care Act, otherwise known as Obamacare. It was enacted to provide health insurance for all Americans. While it may provide an avenue for all Americans to have access to health insurance, there is a cost associated with getting coverage.

Before you decide against health care coverage, consider this: the number one reason for personal bankruptcies are medical bills. Yes, that’s even ahead of credit card and mortgage driven bankruptcies!

So, what’s health insurance? It’s a contract that sets forth under an agreement to indemnify you for your costs for doctors and hospital visits, procedures, surgeries, and skilled nursing care. It can be provided by your employer with high or low deductibles, and different kinds of benefit plans that you select. Dental and vision coverage may also be offered, for a cost.

There are premiums associated with the coverage you select, and many times you may pay the majority of it, or maybe your employer does, or some combination of how that is paid based on different factors.

If you can’t get health insurance through your employer or you are unemployed, you can get personal health insurance. You can do that by applying to insurance companies, especially using the state-sponsored healthcare exchanges to get your coverage.Your employer may have a couple of tax-smart plans for you. One of them is a Flexible Spending Account (FSA). With this plan, you can put money away in to an account to be used for certain out-of-pocket healthcare expenses and it is taken out of your pay check, pre-tax. The other plan is a Health Savings Account (HSA) which is a high deductible plan that is also used for out-of-pocket medical expenses and is also pre-tax. Either of these plans are a smart way to go if you have them available to you.The important thing to keep in mind is to get the right deductible and healthcare coverage that fits your cash-flow needs and is certain not to bankrupt you in any manner. That allows you to continue to build your wealth successfully over time.

Until next time, enjoy. Gary


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