The Health Insurance Industry: Common Myths Exposed
1. Health insurance is not required by the US Government.
False. In 2013, the Affordable Care Act mandated that all citizens have health insurance that is compliant with its standards. This law was put into place to make healthcare affordable to low income individuals and families. However, it had the opposite effect on individuals who make around $35,000 or more, and for families who make $48,000 or more.
If you choose not to purchase ACA compliant health insurance, there is a 2.5% of your income penalty that you will have to pay back to the government. This rate typically increases each year. In a lot of cases, there are individuals and families who make less than 100% of the federal poverty level (who need health coverage), that are exempt from having insurance because they cannot afford it. This means that these individuals have to pay out of pocket for medication, doctor visits, and any kid of surgery or procedure.
If you need advice on how to obtain health coverage if these health plans are unaffordable, ask one of our agents to educate you on your next steps.
2. Life insurance is a waste of money.
Life insurance is never a bad investment. The key is to start young, when you will have the lowest monthly payments possible. A lot of young, single individuals think that because they are independent, they have no need for life insurance. You always have someone relying on your paycheck, even if it is your roommates or your parents. You may have student loans or other financial endeavors that need to be taken care of. Burial processes are not on the cheap side either. Fortunately, there is a new concept that makes all of this worthwhile.
Living Benefits cost the average person around $20 per month. By choosing to pay this $20 each month, you can use $250,000 from your plan (no, you don’t have to pay this amount back), and put it towards bills, a mortgage, car payments, lost wages, etc. You can pull this amount of money out for 3 reasons: You, your spouse, or your child has suffered a chronic, critical, or terminal illness that has put you into a financial bind that you never saw coming. Another benefit of this plan is financial security and mortgage protection if your spouse were to pass away. You can receive up to $2 million in benefits to pay off your mortgage, or as a means of surviving. 60% of bankruptcies are caused by unforeseen medical costs. Sounds like a no brainer, right?
3. Soon enough, there will be no more social security.
This is false, but not entirely false. Yes the social security program is looking grim for the young millennials, but that does not mean that retirement benefits will just disappear into thin air. The 2014 report from the trustees of the Social Security program estimated that the trust fund reserves will run out in 2034. That means Social Security won't be able to pay full retirement benefits starting in 2033. Only 77% will receive benefits if the program stays as it is today. With that being said, there will be changes to the program, and some ideas are already in the works.
Increasing worker wages (which would increase taxes) and cutting benefits have been considered. America is in this situation for two reasons: people are living longer and outliving their retirement, and the ratio of baby boomers (who are in the process of retiring) to millennials is very askew.
4. This healthcare reform won’t last.
There is no telling whether the Affordable Care Act will survive, but most signs point to a collapse. This won’t happen any time soon, but perhaps in 4 years or so. The reform made healthcare affordable to Americans in the lower percentiles of the federal poverty level, but put everyone else in a bind. Employer health coverage is also struggling because of the reform. Each year, less and less employers offer health coverage due to the skyrocketing premiums.
5. The enrollment statistics are 100% true.
Maybe. Although there has been a 15 million increase of insured Americans since 2013, there are still 33 million Americans who choose to go without health insurance because of the cost. 70% of uninsured Americans who filed their taxes through Turbo Tax this year, filed an exemption to the healthcare mandate. Nearly three in four of the uninsured were already exempt from having insurance due to their low income. It is true that there have been many improvements in the numbers of Americans with health insurance (most who are receiving a hefty tax credit). However, it is estimated that almost half of these subsidy beneficiaries will have to pay back the government.
6. Free healthcare doesn’t exist.
False. Georgia did not expand Medicaid for adults, but the state is still an advocate for the Children’s Health Insurance Program, or CHIP. There are almost two million Georgians receiving Medicaid, and about 77 million nationally.
7. There aren’t alternate solutions to high cost health coverage.
False. There are combinations of different plans that can give you excellent health coverage and then some. This method (if done correctly) can give you more coverage for about half the cost of an individual ACA compliant health plan. Contact your local health insurance broker to learn more.