1 in 10 People Land in a Hospital Each Year
Costing $9,000, On Average, Per Hospitalization
And that’s just the cost of hospitalization. If you get into an accident, have a chronic condition like diabetes, or a serious illness like cancer or heart disease, the cost of doctor visits, diagnostic tests, and prescription drugs can quickly eat up a your life savings and leave you broke.
Your chance of being hospitalized increases as you grow older.
|Age||Annual Hospitalization Rate|
|65 and over||4 out of 10|
|45 to 64||1.5 out of 10|
|15 to 44||1 out of 10|
What You Get and What You Pay
(What You Pay is More Than the Monthly Premium!)
What you get: Health insurance limits the amount you must pay out-of-pocket for medical care – so an unexpected hip-fracture or appendix removal won’t bankrupt you. Most plans cover hospitalizations, doctor visits, emergency care, and prescription drugs.
What you pay: Your monthly insurance premiums are just part of your total medical expenses.
- Copayments: fixed fees you pay for some services, such as $20 for every office visit and fixed percentages you pay for other services, such as 20% of the cost of prescription drugs or 10% of the cost of surgery.
- Annual deductibles: set-amounts that you must pay before insurance company starts paying your bills. For example, your plan might specify that you are responsible for first $1,000 of covered expenses.
- Out-of-pocket limits: Most insurance plans limit the deductibles and copayments you are required to pay in a single year. For example, your plan might cover 100% of your medical expenses after you have spent $2,000 on coinsurance and deductibles.
You Can Pay Less In Monthly Premiums
If You Take On More Risk Or Limit Your Options
The average worker paid $345 per month for family medical insurance in 2011. High deductible plans were about $45 less.
You can pay lower monthly premiums in exchange for higher deductibles and copayments, which results in higher out-of-pocket costs should you need a lot of care.
- If you can handle a rash of “minor” medical expenses without insurance, consider a plan with higher deductibles and copayments and lower monthly premiums.
- If you value predictable medical expenses, you might nevertheless pick a plan with lower deductibles and copayments, in exchange for a higher monthly premium.
You can also pay lower monthly premiums in a managed care plan, like a HMO (Health Maintenance Organization) or PPO (Preferred Provider Organization), that restricts you to using hospitals and doctors in the plan and generally requires a referral from your primary-care doctor to see specialists or get medical tests.
- If you find the care provided by an HMO or PPO acceptable, opt for the lower monthly premium.
- If you value the freedom to choose doctors, hospitals, or treatments, expect to pay more – higher premiums, deductibles, and/or copayments.
Are You Eligible For Government Insurance?
Medicare, Medicaid, and Veteran Benefits
If you can’t afford any insurance plan, you might qualify for Medicaid. Medicaid is a state-run insurance program for low-income individuals and families. Even if you don’t qualify for Medicaid, your children may qualify for state-subsidized medical insurance.
Medicaid has different names in different states: MediCal in California, MassHealth in Massachusetts, and SoonerCare in Oklahoma
If you’re over 65 and have worked 10 or more years, you should qualify for Medicare. Medicare is a federal insurance program that covers most (but not all) of the cost of medical care for seniors. See Learn More About Medical Expenses in Retirement.
If you are a veteran, or the dependent of a veteran, you should qualify for Veterans’ Administration health care, which provides comprehensive health and disability coverage.
For more information, visit healthcare.gov, a website brought to you by the Department of Health and Human Services.