Does private health insurance actually protect sick people?

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When you pay for insurance, you’re ideally buying financial certainty. When you get into a car accident, car insurance protects you from bearing the full cost on your own. You pay your premium even if nothing bad happens, and it’s supposed to pay off if something bad does happen.

Health insurance should work the same way. You pay your premium even if you’re healthy, and you’re covered if you become unhealthy. In practice, even people with health insurance face financial barriers to care when they get sick, as a new study reveals.

The study, published in the Journal of General Internal Medicine, looked at three years of survey data covering 82,494 Americans with private insurance and found that those in poorer health were at greater risk of not taking medication due to cost, taking on medical debt, and being dissatisfied with care.

“Private insurance seems to protect those that don’t need the most protection,” says Dr. Salomeh Keyhani, professor of medicine at the University of California, San Francisco, and senior author of the study.

While the study did not identify causes of the disparity, Keyhani speculated that people with poorer health face barriers to accessing affordable medical care. For example, you may need treatment from a specialist, but your insurance network may not include that specialist, so you have to pay out-of-network costs.

The Policygenius 2022 Health Insurance Survey also found costs are too high for insured Americans. 41% of Americans with health insurance said they had avoided getting medical care because they knew or feared insurance wouldn’t cover the costs, while 32% said the cost of a prescription prevented them from taking the full dose of prescribed medication.

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Where health insurance falls short

A supposed benefit of the private health insurance system is that consumers have choices: a Cheesecake Factory menu of plans and providers, allowing you to tailor your health care as you see fit. The reality is that it’s unrealistic, and often impossible, for patients to anticipate what care they’ll need if they get sick.

“This is just a false narrative,” Keyhani says. “If you get cancer, you can’t anticipate what medications your oncologists need to use.”

If you can’t anticipate care, you can’t anticipate your costs, which makes it difficult to know what kind of health insurance plan to get. Given these uncertainties, Keyhani says there should be further regulations limiting what patients have to pay out of pocket.

Kayhani says that researchers are limited in their ability to study private insurance plans. While Medicare is federally funded and required to make much of its data public, private health insurance companies are under no such obligation, making it difficult for researchers and people shopping for insurance alike to assess the quality of private plans. So if you’re a diabetic, it’s difficult to say which healthcare plans have the best outcomes for diabetics.

“Consumers can’t make choices because the data aren’t transparent,” Keyhani says.

How to pick a health insurance plan

So where does that leave you when you sign up for health insurance? Even though it’s difficult to estimate all your health care costs over the next year, you can at least compare plan costs in a worst-case scenario, in which you have to cover the entire deductible and out-of-pocket max, and a best-case scenario, in which you pay nothing but the premium.

From a pure cost standpoint, this comparison often points to a high deductible health plan as the best option, since the premium is usually very low, if it even has one, and you can use a health savings account. But cost isn’t everything. With a high deductible plan, it can be stressful to manage all the medical bills that come in the mail, and your costs if you get sick are harder to predict. Plus, you may not be able to afford the deductible.

If you’re signing up on the state or federal marketplaces, the good news is that Congress extended the enhanced premium subsidies introduced during the pandemic.

“A lot of people are going to have $0 premiums in the exchanges,” and premiums are capped at 8.5% of income,  says Naomi Zewde, professor of health policy at UCLA Fielding School of Public Health. Because of the enhanced subsidies, plans with higher premiums and lower deductibles might be more affordable than they were before.

Another thing to look at is networks. Your plan might be affordable, but it may not include doctors in your area. If you have a doctor you want to see, call the insurance company or the doctor’s office to make sure they’ll be covered under your plan.

While you can’t forecast every health expense you’ll face, you should read each available plan carefully to form the best estimate you can, and weigh the costs along with your tolerance for risk. It’s a tough decision, but it’s important, given how costly health care can become.

“If we had public coverage,” Zewde says, ”we wouldn’t have to make these choices.”

More healthcare debt tips

Medical debt is a huge burden for many Americans. If your medical debt is overwhelming, you may want to consider negotiating your medical bills. You can also use health and wellness programs to stay in shape and help prevent the need for healthcare later, such as using employer-sponsored wellness programs or eating healthier.


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This article originally appeared on and was syndicated by


3 health insurance myths that can raise your rates


Health care costs are a confusing and complex issue. The costs of care and insurance are determined by the price of goods and services, prescription drug pricing, administrative overhead and more. But did you know your own misconceptions could also be raising your insurance rates?

Here are three health myths that can lead to higher insurance rates.


Carles Rodrigo Monzo


Whether you’re choosing an insurance plan through your employer or shopping for a policy on your own, choosing insurance isn’t a decision you only make once. Finding the right insurance policy for you depends on a wide range of personal factors, including your care needs, family size and how often you see a doctor. You also need a policy you can afford, both when it comes to the monthly premium and other costs like copays and deductibles.

When your personal situation changes – such as when you get married or divorced or start a family – your existing policy may become inadequate to meet your needs or more expensive than necessary. Also, annual health insurance premiums tend to increase over time, so your plan may eventually grow beyond what you’re willing to pay.

Be prepared to re-shop your existing insurance policies regularly, either by reviewing your employer’s options during open enrollment or comparing plans on your own. When comparing costs, pay attention to the premiums, copays, coinsurance and deductibles to find a cost-effective plan.


There is no legal mandate to sign up for health insurance through your employer. You can choose to shop for a policy on your own instead, though your employer’s policy will most likely be the cheapest.

You should review your options during open enrollment. Take the time to determine if you can lower your insurance costs. (Check out this state-by-state guide to open enrollment here.)

Also, if you have the ability to get on a spouse’s or parent’s insurance policy, you should take a look at that option. Insurance costs vary between employers and providers. There may be a cost savings for a similar level of coverage in some cases.


In health insurance, a deductible is the amount of money you have to pay out of pocket for medical services before your health insurance contributes (with most policies, there will still be copays or coinsurance to cover before you hit your out-of-pocket maximum). To avoid high out-of-pocket costs, you can choose a plan with lower deductibles. This is a good strategy for families and individuals who go to the doctor a lot. However, these policies generally have higher premiums. (Learn more here.)

Lower-deductible plans aren’t necessary when you don’t visit the doctor a lot. While you will owe more for your infrequent doctor visits, you’ll pay a lower premium. This is a good choice for someone who’s young, relatively healthy and who rarely receives medical care. Just remember that you may need to update your policy if your circumstances change.

Did you know many Americans are confused about health care? One in four people have skipped treatment because they were unsure what their health plan would cover, according to a recent survey. Learn more here.

This article originally appeared on Policygenius and was syndicated by




Featured Image Credit: Kiwis / iStock.


Myles Ma

Myles Ma is an editor at