importance-of-financial-planning

What President Obama Can Teach Us About Health Insurance

importance of financial planning

“Money is a good servant but a bad master.”

Sir Francis Bacon

Health Insurance | Importance of Financial Planning

Money.

Few words have the power to evoke strong human emotion.

I’m not going to sit here and type up a huge introduction on the history of money or even write about the metaphysical aspects of money or even discuss the corruptions plaguing our current fiat system.

You already know what it is. However, very few know what to do with it. Or how to protect it.

I present to you

*cue the trumpets*

The Brave Money Pyramid

It’s a very very easy concept.

I created this pyramid after putting together a lot of information + I’m a visual person = Awesome pyramid for everyone! Yay, strategic financial planning!

OKAY, In the next couple of weeks, I will break down each block of the pyramid and every aspect. First, let’s discuss what I believe is the most important block: Heath Insurance, Life Insurance, Disability Insurance, and Fixed Annuities.

The reason why I wholeheartedly believe this is the most important block is the fact that if you even have one of those aspects missing (with the exception of Fixed Annuities) you are pretty much screwed.

No health insurance? You have a freak accident, go to hospital for a week, get MRIs, EKGs, emergency surgery, get admitted into intensive care unit and a week later, your hospital bill is over $150,000. BOOM. From one freak accident, you’re in the hole $150K. The lovely thing about hospital bills, is that they WILL place liens on your properties and any other investments you have…they will do everything in their power to collect their money. That was sarcasm by the way. It isn’t lovely. It’s actually quite horrible.

no-health-insurance

Get health insurance from your job. ALWAYS. ALWAYS. ALWAYS. If you have to pay extra for the best policy available with the lowest deductible…DO IT. Do not gamble with your health or your family’s financial wellbeing.

It should be common sense, but I can’t even tell you how many people I’ve met who refuse to get health insurance through their job because they want to save money. Dumbest thing I have ever heard. Always get health insurance through your employer. ALWAYS. If your job does not offer health insurance OR you are self-employed, you only have 4 options: Affordable Care Act Policies, Indemnity Policies, Short Term Medical Policies, or the Pay-Out-Of-Pocket Route.

 

Short Term Medical Policy: I don’t recommend Short Term Major Medical Policies. I mean it is real insurance with real health providers, it’s just that they are typically very expensive and you have to meet your entire deductible before it covers anything outside of a doctor visit. That means you are paying for everything out-of-pocket until you reach a deductible of $2,500 all the way up to $10,000 (depends on the deductible you select).

short-term-health-insurance

What is a deductible? That is an agreed price between yourself and the health insurance carrier. It is the price you agree to pay before the carrier will step in and help you out.

The lower your monthly premium, the higher your deductible.

The good news, ever time you spend money for doctor visits or prescriptions, it will chip away the deductible.

However, after you reach your i.e. $5,000 deductible, you will then have a 70/30 or 80/20 split. Meaning, the carrier will cover 70% or 80% of the bill while you cover 30% or 20% of the bill. But remember, you must cover THE ENTIRE DEDUCTIBLE before it kicks in! So even after you cover the deductible, you are still shelling out money. I have some more awesome news for you…because it is a “short term policy”, you have to select whether you want the policy for 6 months or 12 months. After the agreed time is over, you have to start over on your deductible. For example, you select a 6 month policy. After the 6 months are over, you have to START OVER on your deductible. Doesn’t matter if you paid the entire thing….you have to start over! If you hate our government/president or you are super old fashioned or you are court ordered to pay health insurance for a family member you do not care about (people are bad, yes I know)….get a short term policy.

Affordable Care Act Policy: If you have no qualms regarding President Obama/U.S. government OR you do have issues with our government but you don’t give a rat buttocks because you know our government is not real (I fall into this category ;-), then line right up for an Affordable Care Act policy AKA Obamacare! As much as I dislike our government…I sure do love my Obamacare policy. Seriously. No sarcasm.

This is the first time in our free hand market where insurance carriers have to compete for your business. Big boy carriers such as Blue Cross Blue Shield, United Healthcare, Humana, Aetna etc are offering amazing policies that they don’t offer even to workplaces. They must be competitive to receive your business through the Affordable Care Act Marketplace. It’s a beautiful thing.

Also, the polices premiums are created based on a specific algorithm. Your age, your income, your zip code, and your overall household (do you have a spouse, kids, etc). These are the determining factors for what you will pay monthly for your premium. No inusrance carrier on The Marketplace can discrimitae against you because you are too old or because you have diabetes and no other health insurer carry will approve you.

obamacare-awesome

Many policies allow you to completely BYPASS paying your deductible. For example, doctor visits, specialist doctor visits, emergency room visits, prescriptions are NOT subject to your deductible. You do not have to pay an entire $5,000 deductible before your policy covers doctor visits, specialist doctor visists, prescriptions, emergency room visits. For example, a policy via Short Term or even some workplace policies, require you pay that entire $5,000 deductible before covering an XRAY. So that means, you have to pay for an XRAY completely out of pocket…to the tune of $300+ for each XRAY shot. An Affordable Care Act policies allow you to bypass the deductible and go right into a copay.

You also get a tax break for getting an Affordable Care Act Policy. I recommend ACA policies because the premiums are very competitive, you are insuring with a huge insurance carrier, and it allows you the freedom and flexibility to become self employed without having to rely on an employer for health insurance.

Indemnity Policies: Horrible, horrible, horrible idea. These policies only cover you AFTER you’ve been billed. That means, you get into a freak accident, go to hospital and create a $150K hospital bill. Your indemnity carrier, for example MultiPlan Indemnities, calls up the hospital and tries to negotiate your bill to a lower price point. After they attempt to lower your bill, the MupltiPlan carrier will call you and tell you how much they are willing to cover. For example they convince your hospital to lower your bill to $142,000. Then MultiPlan will cover only $2,000 of the bill, while you are stuck with a $140K hospital bill. Keep in mind, the hospital DOES NOT have to agree to negotiations. They can tell MultiPlan to screw off! These are also known as Discount Policies….it is not even considered health insurance. Prior to The Healthcare Reform, these policies were issued to people who found out they had cancer and no insurance provider would pick them up because they have a major pre-existing condition. After the Healthcare Reform, health insurance providers through The Marketplace AKA Affordable Care Act, have to pick every applicant up regardless of their pre-existing medical condition. So these polices are complete dead wood. They honestly should be phased out of the industry but there are very confused people who do not understand the Healthcare Reform or are anti-government. Hey, go right ahead and pay $300+ for a policy that may or may not pick up your hospital bill.

Pay-As-You-Go: I love these people. You talk to them and they tell you, “Hey! Screw my job’s insurance, screw the government, screw short term private insurance! I pay as I go!” These people not intelligent. OK, great, you can pay for your doctor’s visit or your prescriptions out of pocket, but all you need is that one…THAT ONE…freak accident that sends you to the hospital. You are done. Finito. Your house will have a lien or they will garnish your wages. I would never put my family or kids in that situation. Ever. Or, you go to the doctor and he tells you have the beginning stages of cancer and you need chemotherapy immediately. Once again, you…are…done.

Oprah and Bill Gates have health insurance. These individuals can actually pay medical expenses out of pocket and afford it. If these multi-billionaires have health insurance, what makes you think you don’t need it.

“The secret of getting ahead is getting started.”

Mark Twain

So that’s Step One:

Get health insurance. All you need is that one mishap and your finances will be finito for years to come. If your job offers it, take it. If not, get an Affordable Care Act Policy or a Short Term Policy.

Protect yo self before you wreck yo self.

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