It costs less to live healthily than it does to pay for health insurance. Unfortunately, health insurance is required. Living a healthy lifestyle isn’t. A healthy lifestyle drops in priority because of financial pragmatism. Insurance, which can be a good idea, is becoming counter-productive on a personal and a national level.
If it wasn’t for the profits, insurance would be the embodiment of “We The People“. As much as I think my health insurance costs too much, I understand the bigger picture. Insurance is inherently simple. Accidents happen. Whether it is for healthcare, or cars, or houses accidents (and ailments at al) happen and frequently cost money. If the accidents didn’t cost much, there wouldn’t be a need for insurance. Each person saves a bit, and then has just what they need. Accidents can cost a lot. People have a tough time saving. Even for people who save, if the accident hits before the savings accumulate there is still a problem. Simple solution. Everyone puts in a bit, but we all put it in the same place, and whoever needs it draws from it. Ta da! We The People rule!
Put a lot of money into a pile and someone will volunteer to watch over it. Someone else will offer to watch over it and not take any. Someone will offer to watch it, not take any, and ask to be paid a fee for extra vigilance. Someone has to make sure that the money is coming in and going out appropriately. That costs more. Then someone points out that if they could invest the money they could make it grow, bring down the costs for everyone, and be able to pay themself from the profits. That isn’t how insurance was born. Communal protection has existed for millennia. But, it probably didn’t take long for the agents to think the steps.
There are plenty of hypotheses about the high cost of healthcare. The details of doctors, hospitals, pharmaceutical companies, insurance companies, lawyers, and patients make a simple collaboration into a very tangled situation.
I will set that debate aside because this blog is about personal finance.
Frugal people know that the best use of time and money is to properly maintain what you have. Repair costs more than maintenance. Replacement costs more than repair.
That’s true for healthcare as well because it is true for humans. Gain and maintain health by eating right, drinking plenty of fluids, get regular exercise, and enough sleep. Throw in some meditation and stretching, and some mental health activities like relaxing and having fun. The only item in that list that costs money is eating, at least in today’s society. Water is nearly free. Exercise, sleep, meditation, stretching, relaxing and having fun are free. Any costs associated with them come from our choices: joining a gym, buying a better mattress, paying for coaches or resorts, going to a movie.
My choices aren’t totally free. The exercise part is simple.
I like to: hike , ski , bike ,
dance, practice karate, and an assortment for the sake of variety. The gear and lessons cost money, but all of it results in things I can do for free (except for food and gas). My preferred entertainments: conversations, some of that exercise for the fun of it, sharing meals (there’s that food again), reading, seeing shows (they cost), and an even wider variety – for the fun of it.
Staying healthy is important regardless of wealth. The good food part is fun because I also like to cook and eat; but, when money is tight the healthiest options have to be set aside. The good and fun exercise part is largely a case of time. When I have enough time it is easier to fit in a run, stretch, practice karate, and meditate; but, when money is tight in this society so is time.
Evidently the new health care system requires annual renewals. So I heard back in November. The process was thankfully simple. One half hour phone call and everything was arranged. It was also a half an hour when I wasn’t making money. It was also a surprise that, even though nothing had changed except getting less than 2% older, my monthly premium was going to up 17%. My health insurance was redirecting more money, and therefore time too, from insuring my health.
My monthly premiums are more than I spend on food. A bit of that premium devoted to organic, or fresher, or more nutritionally dense foods would improve my health. The time spent working to pay for insurance so far exceeds the recommended exercise requirements that I would be be in good enough shape to fend off a bad back, lose weight, and relieve stress. The power of that extra money and time is apparent because there is no extra money or time (My Rule of 7). If there were, I’d take days off more frequently than once every two months.
I’ll continue to pay the premiums, which are for healthcare that is 17% more distant than before. The distance is moot because, as I’ve written before, I could afford the insurance but insurance is not care.
There is a larger consequence that provided a new perspective. My monthly premiums are about what I should be saving to pay income tax (estimated). Premiums are paid to collect enough to cover recoveries. Collectively, that should be an impressive number. From my personal perspective, collectively the healthcare number is larger than what we collect to run the entire country. In 2012, healthcare costs in the US were about $2,800,000,000,000 ($2.8T). US GDP was $16,200,000,000,000 ($16T). It is not a surprise that the expenses and incomes of the US are not a scaled up copy of my finances. The comparison does, however, point out to me how much good could be done if money and time were being devoted to maintenance rather than repair; and how much healthier the nation would be.