I've seen a lot of debate recently about the cost of health insurance and whether a young healthy person should even get it. Let me first say that health insurance is a need in modern society, regardless of your age. The old notion "I'm young and don't get sick, why do I need insurance?" doesn't apply anymore. It's actually never applied. I've seen many young people get into accidents that can be financially ruinous. They eventually have to declare bankruptcy in order to climb out of the hole.
Yes it's true that your chances of getting the big ones of heart disease and cancer at a younger age is lower, but I've seen this also. According to the CDC, there's over a 6% chance that you will be injured to the point that you can't work for an extended period of time. Now this may not seem like much, but over your working career of say 30 years, there's well over a 100% chance that you will need health insurance at some point during your working career.
So let's a take a look at what health insurance is going to cost you based upon ehealthinsurance.com rates, across a broad range of people.
All of these prices are for woman in the Orlando, FL (men rates appear to be similar) area who don't smoke because if you still do that you you're a dumbass:
30 year old women: $198 high deductible HSA
Starting salary for a teacher in the area is $37,000 and you get no subsidy with the plan. If you do not get insurance you are fined $277 per year. Since it qualifies for an HSA, you could receive a tax benefit of $495 per year. Dropping your monthly cost to $156.75.
40 year old women: $223 high deductible HSA
Her salary is $47,000 and she gets no subsidy with the plan. If you do not get insurance you are fined $352 per year. Since it qualifies for an HSA she would receive a tax benefit of $825. With the tax benefit her plan comes down to $154.25.
50 year old women: $311.75 high deductible HSA
Her salary is $57,000 and she gets no subsidy with the plan. Her penalty for not having insurance would be $427 per year. She qualifies for an HSA she would receive a tax benefit of $825 per year. Which brings her monthly payment down to $243 per month.
60 year old women: $474 high deductible HSA
Her salary is $67,000 and she gets no subsidy with the plan. Her penalty for not having insurance would be $502. Since she qualifies for an HSA she would receive a tax benefit of $825 per year. Which brings her monthly payment down to $405.25.
The people that this probably benefits the most are those who are poor and old or also young. The subsidy should knock the price down considerably to almost nothing. Supposedly the way the law is written is that nobody should have to pay more than 10% of their income for insurance. This still strikes me as high, but it's the law now, so whatever.
It looks like there might be a good loophole for a person who makes around say $40k and who is also in decent health while still being under 40. That way you get the tax break of the HSA, but you also get reasonable rates. Regardless, you're still probably paying 50% more per month than the cheapest plan last year. The good news is that it's better coverage in case something does happen.
Another reminder is that when going with high deductible plans be sure to have enough in your emergency fund in case something bad does happen. High deductibles really suck when you can't pay the deductible.
Yes it's true that your chances of getting the big ones of heart disease and cancer at a younger age is lower, but I've seen this also. According to the CDC, there's over a 6% chance that you will be injured to the point that you can't work for an extended period of time. Now this may not seem like much, but over your working career of say 30 years, there's well over a 100% chance that you will need health insurance at some point during your working career.
So let's a take a look at what health insurance is going to cost you based upon ehealthinsurance.com rates, across a broad range of people.
All of these prices are for woman in the Orlando, FL (men rates appear to be similar) area who don't smoke because if you still do that you you're a dumbass:
30 year old women: $198 high deductible HSA
Starting salary for a teacher in the area is $37,000 and you get no subsidy with the plan. If you do not get insurance you are fined $277 per year. Since it qualifies for an HSA, you could receive a tax benefit of $495 per year. Dropping your monthly cost to $156.75.
40 year old women: $223 high deductible HSA
Her salary is $47,000 and she gets no subsidy with the plan. If you do not get insurance you are fined $352 per year. Since it qualifies for an HSA she would receive a tax benefit of $825. With the tax benefit her plan comes down to $154.25.
50 year old women: $311.75 high deductible HSA
Her salary is $57,000 and she gets no subsidy with the plan. Her penalty for not having insurance would be $427 per year. She qualifies for an HSA she would receive a tax benefit of $825 per year. Which brings her monthly payment down to $243 per month.
60 year old women: $474 high deductible HSA
Her salary is $67,000 and she gets no subsidy with the plan. Her penalty for not having insurance would be $502. Since she qualifies for an HSA she would receive a tax benefit of $825 per year. Which brings her monthly payment down to $405.25.
The people that this probably benefits the most are those who are poor and old or also young. The subsidy should knock the price down considerably to almost nothing. Supposedly the way the law is written is that nobody should have to pay more than 10% of their income for insurance. This still strikes me as high, but it's the law now, so whatever.
It looks like there might be a good loophole for a person who makes around say $40k and who is also in decent health while still being under 40. That way you get the tax break of the HSA, but you also get reasonable rates. Regardless, you're still probably paying 50% more per month than the cheapest plan last year. The good news is that it's better coverage in case something does happen.
Another reminder is that when going with high deductible plans be sure to have enough in your emergency fund in case something bad does happen. High deductibles really suck when you can't pay the deductible.
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