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3 Biggest Health Insurance Myths

Insurance often feels like a waste of money or a "hedge your bets" gamble that something bad will happen. While there may be a thousand ways to spend your hard earned cash, going without health insurance can be the costliest gamble you'll ever make. The law forces us to purchase car insurance, but health insurance is voluntary. Health insurance, however, protects our most valuable asset, our health. The question is, what is the best way to protect your most valuable asset?

Myth #1: It is always better to have employer-sponsored health insurance.
Traditionally, the majority of Americans receive health insurance through their employer. Including health benefits with a compensation package has always made sense because large groups can negotiate better prices than individuals, right? Well, maybe not. The cost of employer-sponsored coverage has been steadily increasing and employers are faced with fewer options. This is great for individuals with chronic medical conditions, but it means higher out-of-pocket costs for all employees, even the healthy ones who never go to the doctor. Due to double-digit increases in health care premiums [1], employers are facing a tough choice; either pass the costs onto employees or reduce benefit levels. Many employees have noticed copays and prescription drug costs increasing while simultaneously contributing more and more to cover themselves and their families. It can definitely feel like a waste of money if you hardly use your insurance, so why not look for a plan that meets your specific needs rather than overpaying for a group policy that includes coverage you wont use?

Myth #2: Health insurance is too expensive to buy on your own.
By identifying your medical needs, you can determine the level of coverage you should have need. Once you've determined how your health care money should be spent, you can comparison shop for plans from a variety of carriers. Employer sponsored insurance can be a pretty good deal for the employee, but the dependents tend to pay much more for that coverage. For most people, it has become a habit to periodically check on car insurance rates. Health insurance should be viewed the same way. You have to have it, but why spend more than you need to? By identifying your medical needs, you can decide if a more affordable plan is right for you. It makes sense to save the money you would have spent on high premiums to cover necessary medical expenses until your deductible is reached. If you never have medical expenses, that savings is just money in the bank! As health insurance costs continue to rise, you can save money by spending a few minutes researching insurance rates. You could be in for a surprise if you're overpaying for health insurance you don't use.

Myth #3: Health insurance is a waste of money for the young and healthy.
It is true that different people need different levels of insurance. It does not make sense to pay for prescription drug coverage or maternity benefits if you know you don't need it. A surprising number of people are paying for insurance benefits they don't need. Health insurance should be viewed like car insurance. Would you pay a high premium to insure a car that isn't worth very much money? Of course not! So why do people pay for "Cadillac" health insurance when all they really need is financial protection in case they get seriously injured? There are options. Younger and healthier people may benefit more from a low cost health plan with a high deductible. Emergency room services are extremely expensive and it makes sense to protect yourself from the financial havoc that can result from injuries beyond your control. For many people, the only reason to have health insurance is financial protection. Clearly, if you're in a car accident or injured while snowboarding or white water rafting or hiking, you are going to want medical attention. Don't let unexpected injuries from your favorite activities cost you your financial security; get the insurance you need to protect your future.

[1] "Employer Health Benefits 2004," Kaiser Family Foundation and Health Research and Education Trust, released September 9, 2004.

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