Why Buy an ACA Health Plan Instead of Self-Insuring One’s Own Medical Expenses?

Simply put, insurance covers against the catastrophic – something that would basically devastate you financially. For example, back in 1997, I ended up with pneumonia; it turned into something extremely bad, and I spent ten days in intensive care. I spent about twenty-eight days in the hospital in total. All said and done the bill charged to the insurance company was close to 700,000 dollars. Luckily, I had insurance because there was no way I was going to be able to pay that back. The insurance paid all or part of it, and the only thing I had to pay was my deductible and my max out-of-pocket. If I was self-insured, I would have been stuck in debt to that hospital.

Medical Expenses Can Lead to Bankruptcy

The inflation on health care costs, as you know, is high. Most people can go to the doctor, get x-rays, get lab work done, and take care of this and that. However, when you start talking about the more expensive MRI’s, surgeries, emergency room visits, etc., it obviously adds up. Self-insurance sounds like a good idea when you talk about it, but when it comes right down to it, it can ruin you. The number one cause of bankruptcy in America is because of medical expenses, and most of those people who filed for bankruptcy had health insurance. Those same people though also had the extremely high deductibles, high out-of-pockets; they didn’t get the right insurance or use it correctly.

Self Insurance Is Not Insurance!

Self-insurance is definitely not the way to go especially when you’re dealing with a long term illness. With the Affordable Care Act, if your income is low enough, you could actually have a zero premium. Yes, you would have a higher deductible, but you would be capping your exposure. Similar to what happened with me, I had the insurance so I kept my exposure down. If I hadn’t had insurance, it would’ve been a lot higher,  not to mention dealing with the legal side, such as lawyers.