Minimum Wealth, part 12

Step 6 is in many ways the silliest and most ignorant of all. “Don’t skip health insurance” it chides. “It can save you money in the short term, but can also bankrupt you. Instead, chose a high deductible plan.” The infograph estimates the average cost of such a plan as $1,704 and subtracts it from a balance of $6,015 to result in $3,911 after premiums. 

High deductible health plans (HDHPs) in the United States must follow IRS guidelines for minimum deductible and maximum out of pocket expenses. For the year 2017 the HDHP minimum deductible for a single adult is $1,300. That means until an insured person spends $1,300 themselves within a year, the insurance provider won’t pay out a penny. 

Since the passage of the Affordable Care Act these plans are required to cover preventive care before the deductible is reached. An annual physical, birth control, and cancer screenings can be accessed by someone with a HDHP without paying out of pocket. Everything else, from chronic conditions to broken bones, must be paid by the individual, until their deductible is reached. 

This seems like a good point to discuss the risks of cycling or walking to work. Cyclists and pedestrians get hit by cars, a lot. In most states the driver can avoid charges by blaming the person they ran over. Traffic studies have revealed an unsettling fact: drivers won’t let Black pedestrians safely cross. They are four times as likely to let a white person cross. Pedestrians of color are disproportionately killed by motor vehicle drivers. 

A HDHP will bankrupt a minimum wage worker hit by a car. If they’re lucky and hire an attorney to sue the driver’s auto insurance, they may get a portion of their medical care reimbursed months later. But they will probably lose ther job. They will definitely lose work hours and income. And now they’re spending at least $1,300 before their health plan covers so much as an aspirin. Combined with premiums, this totals $3,004 in a single year, more than 20% of their annual income.

 

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