Yeah. Not so much.

The truth is, according to Families USA, a disturbingly large percentage of people go through daily life without any sort of health insurance, and those that do may have very inadequate coverage. And, depending on your circumstances, it can be far from inexpensive. So, what to do?

If you fall within certain income, age, or gender criteria, you could apply for Medicaid or Medicare. If you work for a company that offers it as a benefit, you could apply for group coverage. Or, you could opt for individual coverage, which you can purchase online or through an insurance agent.

Any of these options require you learn some basic vocabulary. When you look over policies, you’ll probably see the following words:

Premium: How much you pay for the policy per month or per year. When you look at individual plans, the premium is generally what you will pay each month.

Deductible: How much you will pay in a given period of time (usually a year) before the insurance company starts covering your health costs. What you pay toward your premium does not count toward this limit. Also, the higher your premium, the lower your deductable (i.e. you may pay $50 per month for a $5000 deductable, 0r $189 per month for a $500 deductable).

Co-Insurance: After you pay enough to reach the deductable, your health insurance company may set another amount that you have to reach before they start providing 100% coverage. However, they will typically only make you pay a percentage of this amount, such as 20%, while they pay for the remaining 80%

Out-Of-Pocket Maximum: The maximum you will have to pay out of pocket in a given year

Life Time Maximum: The maximum your insurance will pay during the entire time you hold the policy. Usually this ranges from 1 million to 5 million dollars

Co-Pay: How much you will pay for a doctor’s visit. This can be a percentage (you pay 70% of the cost) or a set amount (you pay $30 for a visit).

Membership in a group or individual insurance plan (I’m not sure how Medicare and Medicaid work) also results in a discount on treatment, provided you follow the plan’s rules. So, the same treatment could cost $5000 to an uninsured person while it only costs $200 to an insured person.

How can you be smart when you shop for insurance? Answering that requires a whole other post! Return tomorrow to find out how the above terms can apply to your own life without, hopefully, breaking the bank.

But then I entered adulthood, and with that came a rather confusing array of my own insurance needs. Just as I got a basic grasp on how auto insurance worked, I needed to figure out health insurance. And let’s not even talk about disability, long-term care, homeowners. . .*mind boggles*

Most people probably never take an insurance how-to class. You just kinda learn it as you go. The danger with that is what if you learn too late? The more I read about the American insurance industry, the more I realize how much it works like (and is actually connected to) the credit industry. Just like establishing monetary credit, you need to establish your “health credit,” and if you do this when you are young and relatively healthy, so much the better. And don’t assume that health credit just impacts health insurance; it also has an effect on disability, long term care, and life insurance.

The danger if you don’t think about and tend to your health credit? Well, you could find yourself unable to get certain types of coverage, or you may pay extraordinarily high health care costs, or, in the end, you may even face bankruptcy.

So, let’s learn this stuff together and figure out ways to improve our health credit. This week, I plan to write about health, disability and long-term care insurance. I’ll define each one, tell you when it may be useful to you, give you an idea of how much it might cost, and where you can purchase it. My case study will be about Health Savings Accounts, which are full of awesome.

Disclaimer: I AM NOT AN EXPERT. I’m just like you, except perhaps I’ve perused a few more websites and read a few more books. So, take all advice with a grain of salt! If something I write seems fishy, let me know! And, check me against all the other information available out there. For instance, the Insurance Information Institute has an amazing website full of clear definitions and nifty extras.

Case Study Fridays will involve real world-ish examples of people who want to use their finances to meet certain goals. Since I will probably be addressing one financial issue per week, the case study will involve someone trying to deal with that particular issue. Single people, married people, people with kids, retired people, all kinds of people! All kinds of goals, too: saving for an emergency fund, getting out of debt, early retirement, funding a college education, and so on and so forth.

My hope is that we’ll both learn from this exercise. I hope you’ll come across case studies that are similar to your actual circumstances, and in doing so glean useful information. And as for me, well, when I take my CFP exam it will be mostly in the form of case studies. So, this is great practice!

Would you like to be a case study? You’ll give me something to post about, and you in return will get some free financial planning advice. And, of course, you’ll remain anonymous. If you’re interested, shoot me an e-mail (through the Contacts page, please) or leave a comment on this post.

And that brings me to next week, which is all about insurance. Hey! Stop yawning! Listen, adequate insurance + an emergency fund are like. . .like the super twins! They work together to rescue you and/or your family when life gets all sucky. Expect posts on health, disability, and renter’s insurance, as well as the first ever brand spanking new super shiny Case Study Friday.

I know, I know, this requires discipline, and that’s never fun. I mean, there are going to be times when you’re tempted to use your emergency fund to buy some big ticket items. You’ll think to yourself “I have $1000. I can afford this. I’ll have time to save up again!”

Whenever you face that temptation, think about your own personal list of emergencies. Would you rather have a new gadget. . .or be able to pay your bills if you get hurt or lose your job? In truth, you can’t know for sure if you’ll have time to replace the money you spent.

As always, it’s up to you, but please realize that every time you spend money from this fund on non-emergencies, you’re putting yourself and your family at risk. Remember that once you’ve met your goal, you’re more than free to continue saving money (preferably in a different account) for things you want! But keeping that initial amount in a separate, slightly hard to access account is a dang good idea.

No post tomorrow, because it is Thanksgiving! I’ll be back Friday with an announcement. ‘Till then, keep workin’ toward those goals, and happy holidays!