Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Jul 19, 2021

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I remember being younger and not giving a second thought to health insurance.

Even after failing to qualify for health insurance coverage under my parent’s plan, I still wasn’t too worried about it.

After all, I was healthy and never needed to go to the doctor for anything.

But health insurance, like any other form of insurance, is a method of transferring risk. Specifically, the risk associated with becoming ill or injured.

Health insurance allows you to trade off an (arguably) guaranteed small amount of money each month, known as your insurance premium, for a potentially much larger sum of money, which could be beyond your means to pay in the event you become seriously ill or injured.

Still, many Americans do not have adequate health coverage. In fact, nearly 25 percent of California residents went without health insurance coverage for all or part of 2009.

Health Insurance Acts As a Safety Net

While insurance premiums may be hard to digest when we aren’t ill or injured, we typically forget all about that “wasted” money when faced with a serious medical condition.

For example, a trip to the emergency room could easily cost you thousands if you don’t have health insurance coverage. With health insurance coverage in place, a large portion of that trip would be covered, subject to a deductible.

If you don’t have health insurance, every dime comes out of your own pocket.

Before you try to calculate your current monthly premium versus the ER trip, remember the keyword here is “emergency,” which means you didn’t know it was going to happen.

Let’s face it, that unexpected trip to the ER is probably not your only doctor visit each year…especially if you have children.

The early years of a child’s life requires what may be dozens of trips to the doctor for various shots and check-ups, resulting in thousands of dollars in medical expenses, which would be paid by your insurance company if you have coverage.

That said, health insurance was designed and is meant to be a safety net for serious illness or injury. I am not talking about strep throat or the rash you developed from eating shellfish.

Let’s look at the well known and far-reaching disease cancer. According to the American Cancer Society, the direct medical costs, or the total of all health expenditures for cancer in 2009, were a staggering $93.2 billion dollars.

The COVID-19 crisis that hit the globe in 2020 is causing a tremendous amount of medical expenses. Related: COVID-19 Second Wave Risk: Best and Worst States [Healthcare & Readiness Ranked].

A large sum of money by any stretch of the imagination, most of which was paid for by health insurance companies, as many individuals aren’t able to afford the necessary treatments associated with fighting off the disease.

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But I’m Young and Healthy!

Unfortunately, being young often leaves us vulnerable to feeling indestructible and not being educated about the unavoidable ups and downs of life.

If you’re young and in great shape, health insurance is still an absolute necessity. You really never know when you may become ill or injured; accidents happen every day. As do health crises beyond our age or health; the coronavirus, for instance, is now a dangerous worldwide pandemic.

It’s just like wearing a helmet when you ride a bike.  You could ride 100 times and never fall down, but it’s there to protect you just in case you do.  And that’s the value.

Aside from being ill and/or injured, enormous medical bills can pile up and leave you devastated by debt, or even worse, force you to file bankruptcy at a young age.

You may also find it more difficult to get private student loans, which might keep you out of college and limit your overall lifetime potential income.

All this at a time when you should be establishing your credit and making some of the largest financial decisions of your life, including the purchase of a home.

Interestingly, one of the best ways to avoid bankruptcy is through the purchase of various types of insurance.

So how do you go about getting health insurance?

One of the most common ways to obtain health insurance is through an employer-sponsored program.

[Also see: can I get health insurance without a job?]

Check with your company’s HR department to determine if your current employer offers health insurance.

Please note, if you are not a full-time employee, meaning you don’t work at least 32 hours per week, your employer probably won’t offer you health insurance.

Don’t let the potential cost of health insurance be a deterrent to your decision to purchase a policy.

As with any form of insurance, health insurance is designed to offer you the opportunity to trade a small pre-determined amount of money, known as your premium, in exchange for a promise to pay potentially much larger costs in the event you file an insurance claim.

Let’s face it; health insurance would not exist if it didn’t prove over time that it was more of a benefit to society than just another unnecessary expense!

The best way to ensure you receive the best coverage at the lowest possible rate is to contact an independent insurance agent or shop online to get quotes.

Once you compare several health care plans and corresponding prices, you can determine which option is best for you.

Read more: Check out our list of health insurance terms.