Health Insurance Blog

Suze Orman On Health Insurance

This time, Suze offers some sound advice on health insurance. It cannot be truer that health insurance coverage is a cornerstone of financial health. Do you know medical problem is among the top three reasons for bankruptcy?

So please, if you don’t currently have any coverage, make this your main financial priority as of this moment. If you are a recent college grad who has yet to start work or are unemployed without coverage, you can buy short-term policies that will cover you for up to six months or so. (A great tip for college seniors: If you don’t have coverage or are currently covered by your parents’ insurance, buy a health plan of your own while you are still in school—one that will allow you to continue with the policy after graduation. Student policies are often a great deal, and being able to extend your coverage past your school years gives you plenty of flexibility while you job hunt.)

A key tactic for keeping your premium down is to choose a plan with a high deductible. Stick with me for a sec and you’ll see the wisdom of this. A low deductible, say one of just $500 a year, can actually end up costing you more than one with a $2,000 deductible. That’s because the lower the deductible, the higher the premium. Moreover, when you have a low deductible and make a ton of claims, your insurer might get ornery and jack up your premium when your policy comes up for renewal.

That’s why the smarter thing to do—if you are generally healthy—is to choose a policy with the highest deductible you can afford. Since your deductible is the annual out-of-pocket money you are required to kick in before your insurer covers your health costs, base your choice on what you can afford to pay out from either an emergency cash fund or a low-rate credit card with a line of credit you intend to tap only for emergencies.