Health Insurance: If You Don’t Pay For It Now, You Will Pay Dearly For It Later

In 2006, there were approximately 47 million uninsured Americans. 

Considering the significant number of lost jobs and the current housing crisis, you can imagine how much that number has grown. 

Among those who have to pay for health insurance on their own, it’s not uncommon for the health insurance bill to be ranked very low on the list of monthly bills that have to be paid.  After all, it makes more sense to put the immediate need (to keep a roof over your head) first, as opposed to paying for unforeseen expenses (like hospital or doctor bills). 

If you’re self-insured (which means you pay for health care expenses out of your own pocket as they arise; also called "self-pay"), or you’re uninsured (which means you haven’t gotten around to signing up with a health care provider and paying the bills yourself, rather than your employer paying for health insurance for you), then you are most likely under the assumption that you will be able to cover whatever health care costs might arise — if and when they occur. 

Here are some reasons to think twice about this strategy…

Who Pays?
There was a time when people who had had no health insurance could go to the hospital, take care of extreme emergency ailments, and worry about the bill later. 

In fact, if you go to an emergency room at night, you will likely find that the vast majority or patients are uninsured.  They are there because what started out as a minor problem was not addressed earlier due to lack of insurance — and the issue eventually got worse, forcing them to go to an emergency room to take care of it. 

Emergency departments are a safety net and often the place of first resort for health care for America’s poor and uninsured." — Linda McCaig, CDC National Center for Health Statistics

Unfortunately, this approach to emergency-only care leaves a lot of hospitals with unpaid accounts. 

For the hospitals, the growth in uncompensated care costs means they could lose money available to pay for building improvements and equipment. For patients, either insured or uninsured, the spike in uncompensated care becomes one factor in why the patient’s financial responsibility for a hospital bill continues to grow." — Dr. Jeff Colyer, Kansas State Representative

Health Care Credit: Avoid It If You Can
While this is a tragedy for hospitals, and especially for paying patients who tend to absorb the costs, something even more tragic is happening to financially challenged and uninsured people when they show up at hospitals for emergency care. 

>Health care providers are increasingly pushing special credit cards as a way for the cash-strapped under-insured to cover their medical expenses."  Source

An essay called The Medical Credit Card Trap explains this new and disturbing phenomenon:  "Not only do most doctor’s offices and hospitals now routinely accept MasterCard and Visa as well as specialized cards like CareCredit, many help patients set up new accounts."

This means that if you are not insured (or are under-insured) and you show up at the hospital for emergency care, you may find yourself directed to a credit processor (instead of a hospital clerk who processes insurance forms) before receiving health care. 

There are certainly many good reasons for doctors and hospitals to protect their bottom line by offering patients a means to pay their bills.  However, it seems that these patients are being forced, under duress, to accept credit accounts — many of which have exorbitant interest rates. 

An article entitled Fresh Pain for the Uninsured details how "a growing number of hospitals, working with a range of financial companies, are squeezing revenue from patients with little or no health insurance." 

The article tells a story of a diabetic patient who previously paid the local hospital $100 a month for emergency medical care under a no-interest agreement. Then, she had her account transferred to an outside credit account and her minimum monthly payment jumped to $455 — much of which is interest. 

While this person was able to get relief by having her story told in the news, many other under-insured and uninsured patients are now being saddled with debt that far exceeds the monthly bill they would have had if they had just paid for an insurance plan in the first place.