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The Necessity of Health Insurance

The Necessity of Health Insurance

Nowadays, healthcare costs are increasing considerably, making health insurance one of the most demanding services. However, many people still dismiss health insurance and consider it a pointless investment. So is health insurance really necessary?

Healthcare costs have been rising for decades not only in the United States but also in many parts of the world. According to financial professionals from Bao Viet health insurance, these costs will keep rising in the future, leading to a sharp increase in the amount of money spent on healthcare. A study by the American Medical Association reveals that in 2017, the U.S spent almost $3.5 trillion on healthcare – $11,000 each person. Healthcare costs are estimated to reach $6 trillion in 2027.

Why are healthcare costs so huge?

According to a study from the Journal of the American Medical Association, the massive rise of healthcare costs in the US is associated with 5 factors, including population growth, population aging, disease prevalence or incidence, medical service utilization and service price and intensity.

Growing and aging population

When the life cycle expands, healthcare costs become more expensive. More than half of the increase in healthcare cost comes from increased costs for services, for instance inpatient hospital care.

More chronic illnesses

According to a study from the Journal of American Medical Association, diabetes is the medical condition whose spending increases most significantly. The increased cost of diabetes is $44.4 billion of the total $64.4 billion spent on diabetes treatment. Other conditions which also witnessed a considerable rise in costs include low-back and neck pain, high blood pressure, high cholesterol, depression, urinary disease,…Ambulatory cost, outpatient costs and emergency department costs also go up.

Health insurance rises

Many people perceive rising health insurance premiums the most concerned issue when it comes to rising healthcare costs. According to statistics collected by the National Conference of State Legislatures, the average family healthcare coverage increased by 5% in 2018 to reach the amount of $19,616. For an individual, the average increase reaches the amount of $201. Among all factors, the two most prominent ones contributing to the rise in the healthcare insurance cost are government policy and changes in lifestyle.

The United States’s healthcare programs, including Medicare and Medicaid, contribute greatly to an increase in the demand for medical services, leading to higher prices. Another factor is an increase in the incidence of chronic conditions such as heart disease and diabetes. It directly drives the cost of medical care up.

Increasing out-of-pocket costs

The higher cost of insurance is not all what push up healthcare cost. Americans are paying a record out-of-pocket for healthcare services. People are turning to high-deductible health plans which impose out-of-pocket costs of up to $13,000 for each family. This trend also adds dramatically to the healthcare cost.

In fact, over the decade between 2006 and 2016, the out-of-pocket costs for Americans with employer-sponsored health coverage increased in a rate that was much faster than the costs that their insurers paid.

What could happen if you do not have health insurance?

While the number of people who are uninsured is lowering, many still find their convincing reasons for not having health insurance. The Kaiser Family Foundation carried out a survey on why people do not have health insurance. 48% of all people who were ask refused health insurance because of its high cost while 12% said that their unemployment did not allow them to buy insurance. Only 6% of participants did not think they need health insurance and 3% did not know how to get it.

Here are potential risks of not having health insurance.

Lack of medical services

According to Hector De La Torre, executive director of the Transamerica Center of Health Studies, not having health coverage can keep people from accessing free preventive care. This is easy to understand. When a person buys health insurance, he tends to receive preventive services than the one without health insurance because all the costs are included in the health insurance cost. A report released by the Transamerica Center for Health Studies, 62% of Americans are suffering from chronic diseases such as high blood pressure, being overweight, high cholesterol or obese. 41% of people without health insurance could not afford their routine health expenses.

Preventive care is essential to spotting illness or conditions early. People who have health insurance get preventive care occasionally and receive proper treatment before the conditions develop into full-blown critical problems. Thus, their probability of effective treatments is higher and the healthcare costs are lower.

Medical debt

A cancer diagnosis or car accident can cost people thousands of dollars out-of-pocket. If a person has health insurance, it is the insurance company who pays this huge amount of money. However, without health insurance coverage, the health issue or accident possibly leads to poor credit or in the worst scenario, bankruptcy. According to Dylan Roby, an assistant professor of Health Services Administration at the University of Maryland School of Public Health, nowadays, insurance can cover the maximum of $6,600 for individual and $13,200 for family, but there is no limit for the uninsured.

Medical debt has increasingly been a factor contributing to an individual’s bankruptcy. Even it does not, it still takes a roll on the uninsured. Of all third-party debt collection, medical debt accounts for 38%. This percent is 13% higher than the percentage of student loan and is more than twice than the percentage of credit card debt. People with huge medical debts are unable to save money and are put under great financial strain.

Tax penalties

You still have to pay a particular amount of money for not having health insurance even if you are healthy. This amount of money depends on the income level, which means that the higher income, the higher tax penalties. Some consumers even have to pay thousands of dollars because of being uninsured. Mr Rob Roby suggests people qualify for any available programs to prevent losing a part of tax return due to the lack of health insurance.

Healthcare costs have always expensive even you have health insurance to cover them. Therefore, it is much more beneficial for an individual or a household to have health insurance. If you need advice about health insurance packages, visit ibaohiem and give them any question. 


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