Prior to the Affordable Care Act (ACA), health insurance was relatively easy to understand and, for the majority of people, more affordable. Remember the days when pretty much every employer offered one plan, and you either opted in or out? Gone are the days of copay only plans, where your employer pulled out a set amount each paycheck and you paid one amount to your doctor and that was it. Now we need to become familiar with words like HMO, PPO, HSA, deductibles, out-of-pocket maximums, and health shares.
Learning enough about health insurance and making an informed decision when purchasing a policy can have a significant impact on your Financial Independence journey. Determining the best policy for your family as well as being able to forecast out-of-pocket expenses can help you budget and allocate funds to make sure you don’t end up delaying Financial Independence needlessly.
Fiology thanks Mandy Sleight of the the FI community for shaping this lesson.
- GOHealth blog at gohealthinsurance.com. This site explains how to navigate health insurance and provides tips on staying healthy.
- Suddenly Deaf: Health Care And Financial Independence from treadlightlyretireearly.com
- A Flexible Plan For Health Insurance In Early Retirement by Chris Mamula of caniretireyet.com
- How to compare and buy health insurance plans in 2018 by Let’s Talk Money Channel on YouTube
- What does the EPO, PPO, HMO, POS stand for in HEALTH INSURANCE? by Let’s Talk Money Channel on YouTube
- Understanding Premiums, Deductibles, Copays and Out-of-Pocket Maximums by PlanSource on YouTube
- Healthcare in the FI Community by Lynn Frair & Jackie Cummings of the thefishow.com
- Review your current coverage and compare that to what is offered in your state marketplace. Compare the deductibles, copays, annual out-of-pocket maximums and finally, the cost per month. If you have an insurance agent you trust, who handles your auto and home insurance, they may also have a health license and understand health insurance coverages. Request them to review your comparisons and recommend the most cost effective plan for you and your family.
- Changing your plan could mean that you will have more money in your budget to put towards your Financial Independence goals, or increase your HSA contributions (if applicable). Do understand, however, the changes in actual coverage. A cheaper plan with inappropriate coverage can add significant risk to your Financial Independence.
- The Marketplace at healthcare.gov. You can determine what carriers and coverages are available in your state.
“It’s no coincidence that four of the six letters in health are ‘heal’.” – Ed Northstrum