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Step 3: Doctor’s Orders

FORGET THE DEBATE over how best to ensure access to health insurance, whether it’s Obamacare, Medicare for All or some other system. One way or another, we should each make sure we have health coverage—because our financial life could quickly unravel without it.

It isn’t simply that those without coverage might be reluctant to see a doctor, imperiling their long-term health and their ability to work. On top of that, if we don’t have health insurance, we could be charged extraordinary amounts for medical care. The reason: We won’t enjoy the price discounts that insurance companies negotiate with hospitals and medical providers.

Even a barebones policy will give us access to those negotiated discounts, plus we’ll benefit from the policy’s cap on annual out-of-pocket medical expenses. For instance, for individually purchased policies in 2019, that cap is set at a maximum $7,900 for individuals and $15,800 for families.

No doubt about it: Those caps are high—and they should factor into the size of our emergency fund. But without a policy, we won’t be protected by those out-of-pocket maximums. That means we could face the sort of six-figure medical bills that have driven many folks into bankruptcy.

Next: Step 4: Aim to Retire

Previous: Step 2: Stockpile Cash

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