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Health Insurance
As a political issue, health insurance is complicated. People stake out positions across the entire political spectrum, some calling it a “right” and others calling it a matter of “personal responsibility.” Social policies, of course, have to be considered even when you are making a personal decision about medical coverage for yourself and your family, but for professional people and business owners, politics has little to do with it.
Health insurance is a fundamental component of a sensible financial plan, which is something all sensible, employed people should have. Most middle-class Americans today, whether in trades or professions, are covered through their employers’ group plans, at least for the major portions of their careers. Self-employed people, of course, have to fend for themselves, while business owners not only have to insure themselves and their families, but make sure their workers are covered, too.
Employer plans
Many people in employer-paid health insurance plans think very little about their insurance coverage, its cost or its terms, until they have an accident, injury or long-term illness. However, even employed people should include health insurance in their financial plans, whether it means buying a small policy for additional coverage of certain types, or simply having a contingency plan in place (and funded) to continue coverage when unemployed.
Employers of a certain size and/or who do business with the Federal government have to comply with COBRA (Consolidated Omnibus Budget Reconciliation Act). The act requires employers to offer continuing coverage to terminating employees and exercises some control over costs and benefits. At the very least, being prepared to fund a COBRA health insurance policy during a period between jobs, or transitioning into retirement, is something to think about.
Self-insurance, you might say
Being properly insured is even more important for the hard working, ambitious and entrepreneurial among us. If you are building a business, perhaps even an empire, your needs will require constant reappraisal so that your property, life and health insurance are adequate to support your company and your family if you suffer losses in any area. You have to insure yourself, your family, your employees – either you delegate the task to a trusted professional, or be prepared to learn a lot about insurance during your life.
One of the main lessons, of course, is not to procrastinate. You can’t buy health insurance if you wait until you need it, not if you want to be managing your money wisely. By establishing insurance policies earlier in life, you can lock in lower rates (at least for a certain number of years) and save a great deal of money in the long run. Unlike life insurance, however, health insurance policies have no financial mechanism by which they can earn and pay interest, or accrue equity. Financially speaking, it is a straight expense, although your family (and your company’s employees) will consider it an investment in their lives.
You may have one or the other among many different political views of the health insurance issue. Politics affects the financial markets, there is no question about it. Your politics must yield, however, to reality, as long as you do not compromise your ethics. Financial planning is really just an ongoing reality check for the things that you value – not just cash, stocks, bonds and real estate, but life, family, friends and others who depend on you. Keep this foremost in mind as you work on your own financial plan.
Topics: Insurance |
