A caller on “The Ramsey Show” sparked a familiar debate this week after sharing his frustration about a sudden spike in his family’s health insurance costs. Jennifer, calling from Asheville, North Carolina, said her monthly premiums went up to about $2,400 after her family lost insurance subsidies.
That increase resulted in about $29,000 per year for her “very healthy family” coverage for rarely used, and left her questioning whether the expense made sense.
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Jennifer explained that her family is debt-free, owns their home and vehicle, and brings in about $234,000 a year. Still, the insurance bill felt exorbitant. “It makes me feel so bad that I feel like we’re throwing that money down the drain,” she said. “It’s just a pain in the butt if we don’t use it.”
The family of five is healthy and usually only goes for routine checkups. That reality made Jennifer wonder if it was wise to set aside $29,000 in savings instead of paying for coverage.
But this idea scared him too. “There’s always the what if,” she said, worrying about a serious accident or medical emergency that could quickly overwhelm savings.
Co-hosts Ken Coleman and Jade Warsaw Didn’t sugarcoat the situation. Warsaw acknowledged that health insurance has become painfully expensive, especially for families purchasing coverage on their own. “Our insurance system is broken,” she said, adding that rising premiums are hitting families at all income levels. “The health system is broken.”
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Still, both hosts strongly discouraged Jennifer from self-insuring. Warsaw warned that even a large emergency fund would not come close to covering catastrophic medical costs. “If someone runs you down the street and everyone’s in the car, there are medical bills. You see what I’m saying?” she said. “Having $10,000 or $20,000 in one account isn’t going to help you.”
Warshaw’s protection as insurance as you hope you never use it completely. “It’s insurance. It’s there when you need it,” she said. “The hope is that you won’t need it for its full value.”
He also encouraged a change in mindset. Instead of focusing on how painful the bill is, Warsaw suggests recognizing the ability to afford comprehensive coverage as a form of financial security. He compared it to paying taxes. “You go, ‘Well, I’m so grateful I have an income,'” she said.
