Covered California
Certified Agent

Why Is Health Insurance Important For Your Household Budget?

Have you ever heard of Maslow’s Hierarchy of Needs? It’s the theory that people prioritize their physiological needs before everything else. In other words, one of the first things we consider when evaluating what to spend our money on is our health. This is one of the main reasons why over 90% of the country’s population has some form of medical insurance. But what’s driving households to budget for health insurance instead of pocketing the money and trying to remain healthy without it?

Here are 3 major reasons why it’s worth factoring health insurance into your household budget.

1. It Protects Low-income Households From Unexpected Medical Expenses

It’s tempting to assume you’ll never face a medical emergency if you keep yourself healthy—but there’s plenty of evidence to suggest otherwise. According to the latest data from the Centers for Disease Control and Prevention, 15% of children under the age of 5 visits the ER at least once a year, and the overall visit rate is on the rise. Evidently, medical emergencies can strike people from all walks of life—even seemingly healthy professional athletes.

Unfortunately, a trip to the emergency department costs $1,220on average if you’re uninsured. In comparison, those with health insurance spend $138 less. This might not seem like much if you earn a high income, but it can significantly impact low-income households. To put things into perspective, the average cost of groceries in the country is approximately $90 per person per week—so budgeting for health insurance could save you a week’s worth of food costs!

2. It Helps You Save Money on Recurring Treatments

A therapist writing in a notebook while speaking with a patient

Do you know anyone that suffers from a chronic illness? If so, you might be aware of how expensive it is for them to obtain adequate long-term medical care. For instance, many people suffering from post-traumatic stress disorder (PTSD) require cognitive therapy to live a pain-free life. This form of therapy is typically delivered over 12 to 16sessions and costs up to $250 per session. If you do the math, this comes out to$3000 to $4,000 in total—and that’s assuming the patient doesn’t require additional interventions recommended by the American Psychological Association.

So, how can households avoid spending thousands of dollars on treatments for chronic illnesses? The answer is simple—take out health insurance. For instance, Ambetter offers a 90% discount on mental health services as part of its Platinum 90 PPO plan, and there’s no limit provided you visit a medical facility within the provider’s network. In other words, households that require recurring treatments for mental health conditions stand to save a massive amount of money by budgeting for this plan’s premiums.

3. It Builds Your Household’s Wealth in the Long Run

A person lying in bed blowing their nose with a tissue

The idea that spending money is a great way to build wealth might sound counterintuitive, but did you know it works in the context of medical insurance? Here’s an example to illustrate this.

Suppose you’re a 30-year-old earning $58,260 per year (the national average across all occupations) which is equivalent to around $173 per day. After speaking with a seasoned insurance agent, you decide to sign up for the Sharp Bronze 60 HDHP HMO Premier plan which costs $346.68 per month for adults aged 30. This plan offers 0% coinsurance on outpatient services, which means members don’t pay a dime out-of-pocket if their deductible is reached.

Now imagine you catch a cold. If you don’t have health insurance, you might be tempted to recover on your own within 10 regular days (or 8 working days), losing 8 x $173 = $1,384 of your income. In contrast, if you were on the Sharp plan we mentioned previously, chances are you’d recover quickly with the help of a doctor and affordable medicines. Assuming you’re fit to work in 7 regular days (5 working days), you’ll pay approximately $87 to the insurance provider (7 regular days’ worth of premiums), but you’ll only lose 5 x $173 = $865. Crunch the numbers and you’ll find that you’ll be $432 better off with medical insurance than without it!

Covered California Certified Agent Aids Households to Select and Apply for Health Insurance Plans Within Their Budgets

People smiling while looking at a laptop on a desk next to a couple of mugs

Now that you know why it’s important for households to budget for health insurance, the question remains—which medical insurance services are worth signing up for? If you’re seeking professional help to decide, come speak to our experienced insurance agents at Covered California Certified Agent.

We’ve helped numerous Californian households sign up for individual and dental insurance according to their budgets. We also assist businesses to safeguard their staff’s health by taking out employer group insurance and strive to provide every client with excellent value.

Dial 800-771-7653 now and give your household budget a boost by selecting cost-effective medical insurance services with the help of our seasoned insurance agents in California.