Health Insurance Is Beneficial, You need One Now

Today I want to take out time to write about why health insurance is beneficial to you and your family. And why you need one now! I have seen one too many people online begging for money for medical expenses. Some people have died because they couldn’t afford their medical bills. I have heard of cases where a person had accident and the hospital rejected them because they don’t money to pay put down a deposit.

All of these point to the reason why health insurance is beneficial and why you need one now. I am going to explain this to you using my experience living in the US and my experience living in Nigeria.

Living in Houston Texas USA

In 2006, while living in Houston Texas, USA, I went out with some friends and I got back home at about 2am. I started throwing up, and I couldn’t keep anything down. My nephew was visiting from Philly so he was spooked by my condition and called 911 to send an ambulance to take me to the hospital.

When I got to the hospital, I was immediately attended to and put on IV. The hospital ran some tests and found nothing wrong with me. After 4 hours in the hospital the doctor said I probably had food poisoning. Since I had become stable, he discharged me.

In some countries like UK, Sweden, Canada, there is universal health care. Which means that if you are sick, your medical bills would be covered by the government. Unfortunately, in the US, we do not have universal health insurance. So, you have to have health insurance to be able to cover your medical bills. This is because health insurance is very expensive in the US. So if you are not rich, you most likely can’t afford to be sick without health insurance. And if you don’t have insurance most hospitals won’t treat you unless it is an emergency and you are brought in by an ambulance. They also usually discharge you as soon as you become stable to avoid incurring more costs that you can’t afford.

Because health insurance is so expensive, companies would usually offer to subsidize the cost of your insurance as a part of the perks of working for them. However, should you lose your job, it means you lose the subsidy and as such, you would have to pay a fortune to maintain your insurance at a time when you don’t have a job! However, if you do have insurance, most of your cost is covered when you go to the hospital. Especially, if you work for a company that is able to negotiate better terms with hospitals.

So when I was discharged, the nurse just assumed I didn’t have insurance. Maybe because I am black, or maybe because I am of African descent. Most Africans in the US work menial jobs and these jobs usually don’t come with health insurance. Anyway, I am not sure why but she never asked for my insurance. Instead she just billed me as an uninsured. The difference between being billed as an uninsured and an insured is humongous and the reason is simple. Because the insurance company have a lot of subscribed customers, they can go to the hospitals and negotiate a cheaper price, but the uninsured, does not have that kind of leverage so he or she is stuck with a huge bill.

So I got back from work one day, I went to my mailbox and I found a bill from the hospital. When I opened the bill, my jaw dropped to the floor. I had been billed $10,000.00 (ten thousand dollars). That would be about N4.8 million today. I almost lost my mind. I had been in the hospital for only 4 hours; that’s $2500 an hour! So I called the hospital to tell them they must have made a mistake. They told me it wasn’t a mistake that that was the price because I didn’t have insurance. So I told the lady on the phone that I had insurance and I provided her with the details. She told me she needed to verify the information. She said that if my insurance covered my cost, I would get a revised bill.

Seven days later, I got a revised bill for $300. Apparently my insurance had a negotiated price that took it from $10,000 to $3000 and my insurance company paid 90% of the cost and I was responsible for 10%. So my out of pocket went from $10,000 (4.8m) to $300 (N144,000). This is the power of health maintenance organization (HMO) health insurance plan. If I didn’t have it, I would have gone bankrupt.

Living in Lagos Nigeria

A decade later and I am living in Lagos Nigeria. Like the US, Nigeria does not have a universal health insurance. And most people have insurance via their jobs. Like Nigeria, hospital costs are expensive but unlike Nigeria, the cost of HMO is relatively cheap. So when you lose your job or you are self employed, you can buy your own insurance to protect your family at reasonable cost.

In Nigeria, should you have an emergency and an ambulance takes you to the hospital, they would reject you unless you have money. Today, many Nigerians rely on family and friends to help them with their medical bills. Some of us resort to begging online which is unfortunate.

Also, Inflation is very high in Nigeria, which means that cost of goods and services are getting higher by the day. Naturally, the cost of buying drugs is also going up. For instance, I bought Hydrocortisone in January for N20250. See picture below:

Two months later, I bought the exact same medicine from the same drugstore for N24,500. See pictures below:

A 21% increase in cost of the drugs in 3 months is incredible. My salary has not increased in the last 1 year but my cost of living is constantly increasing. The good thing is that my HMO would reimburse me for the cost of the drugs. But my premium did not increase during the time. So that helps shield me from the inflation in the country and makes it easier for me to stay alive.

How Health Insurance Works

Health Insurance works by insuring as many people as possible and paying out as little in compensation as possible, to be profitable. For instance, if an insurance company has insured 10 people at the rate of N5,000 each. The total premium paid collected by the insurance company would be N50,000.

If 3 people get sick that month and their bill is N10,000 each making a total of N30,000. Then the insurance company would make a profit of N20,000. However, if 7 people became sick and the insurance paid out N10,000 each at a total of N70,000 then the insurance company would lose N20,000. However, there are other ways insurance companies can save money and in turn pass that savings to you. For instance, the more people they insure, the bigger their bargaining power. They can then buy drugs at cheaper rate than the regular guy and pass the savings to their subscribers. That was how my insurance company in the US was able to reduce my cost from $10,000 to $3000.

To better understand how health insurance works, below are a few insurance terminology that you need to understand. A bit similar to the terminologies we discussed for car insurance:

Premium

A premium is essentially an amount you pay to an insurance company to cover you in case something happens to you. This premium is usually for a period of time (usually a year). It also defines how much coverage you would get. The higher the premium, the higher the coverage. So, you go to an insurance company and you buy insurance by paying your premium. It is important to note that the premium is not refundable should you not get sick.

Coverage

Coverage essentially is how much you are covered for. For instance if my premium is N5,000 a month and the insurance company would pay up to N1.5million in medical costs for me. This means that for N5,000/ month premium, I can get coverage of up to N1.5million in medical costs.

RelianceHMO has some good coverage that you can tap into. For N3500/ month you get coverage of up to N1.2m. N6,000/month premium would get you a coverage of up to N1.8m. You can take advantage of their individual plan or the family plan; for those with wife and children. (Full disclosure: I am an affiliate for this company, which means that should you choose to use the links provided on this site, I do get a small commission, at no extra cost to you. Thank you in advance should you choose to go through any of the links!)

Pre Existing Condition

Pre existing condition is a terminology I first came in contact with in the US. According to investopedia, pre existing condition refers to “a known illness, injury, or health condition that existed before someone enrolls in or begins receiving health or life insurance. This includes illnesses such as heart disease, diabetes, cancer, and asthma etc.”

Before President Obama implemented Obamacare, insurance companies in the US were allowed to reject coverage for a person if they find out that the person has a pre existing condition. The insurance company could also collect premiums from you for years then when you get sick and they find out that the sickness existed before you signed up with them, they could reject your claim and not pay a kobo. Leaving you bankrupt should you have a massive bill.

The reason they did this was simply to make profit. If you remember our example about how insurance companies make money, you would see that the more sick people they insure, the less money they are likely to make. People with pre existing conditions are very likely to be sick, so the insurance companies didn’t want to insure them so that they don’t eat into their profit margin.

Thankfully in Nigeria, we don’t have such restriction. So if you have an elderly parent with pre existing conditions, you need to consider insuring your parents. The older people are, the more likely they are to get sick. When they have a pre existing condition, then sickness is almost sure. Unless you have a lot of money to overcome such emergencies, it might be best for you to use the opportunity to start protecting them via health insurance. RelianceHMO also has a relatively cheap service for pre existing condition.

For N8000/ month you can get this pre existing condition coverage, treatment, tests and drugs for selected conditions like Hypertension, Diabetes, Arthritis, and peptic ulcer are covered from the moment you buy the plan.
This is perfect for older parents, senior citizens or anyone battling with any of these conditions.

How To Maximize Your RelianceHMO

So let me teach you how to maximize your RelianceHMO so that you can get value for your money. So let’s assume you have chosen the family plan and you have paid your premium, you would then have to choose a primary hospital from one of the 1500 hospitals all over Nigeria that participates in the Reliance HMO program. When you choose a primary hospital it doesn’t mean you can’t visit any of the other 1499 hospitals. The primary hospital is where you usually maintain a card and where the insurance company expects you to visit. If for any other reason, you want to visit another hospital, just call them or use their mobile apps to inform them. This would help reduce your wait time when you get to the hospital.

I hate waiting at the hospital for approvals so I usually call the insurance company on my way to the hospital to inform them of my intended visit so that when I get to the hospital my approval is ready waiting for me. I do this whether I am going to my primary hospital or not.

After your visit, the hospital would give you a bill to sign and they would send the bill to your insurance company. This usually includes cost of your drugs, cost of seeing a dentist, cost of seeing an optometrist etc.

To recap, find below a breakdown of the benefits of having health insurance

So if you do not currently have health insurance, please consider protecting yourself and your family by registering with RelianceHMO insurance today! If you click here now to apply, you would get N3500 free to try the insurance program. Good luck with your health.

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