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This Stupid Mistake Cost Me More Than $20,000

One of the biggest health-care mistakes that anyone can make is also one of the easiest to avoid. Electing to forgo health insurance when between jobs can cost you thousands of dollars and days of headaches arguing with hospital billing departments if you ever get sick or injured while uninsured.

I know this because it happened to me last year, and the word "whoops" is a huge understatement to describe how big a mistake not having insurance was. Here's my story.

All it takes is one slip
My trip into uninsured health-care hell started with an innocuous game of football with my friends. Tackled on my way to a touchdown, I landed in a strange position and tore my distal left bicep tendon. At the emergency room, an orthopedics expert told me that I needed immediate surgery to reattach my bicep unless I wanted to have limited use of the muscle for rest of my life.

Having finished my stint working and studying in grad school three months earlier, I had foolishly let my university health insurance coverage lapse because of the distraction of moving across the country. I could easily have stayed with my existing coverage if I had simply paid for the plan's expenses out of pocket. I just didn't think it was important.

The law that guarantees this coverage for employees who quit or lose their jobs is the Consolidated Omnibus Budget Reconciliation Act, or COBRA for short. Usually all you have to do to continue COBRA coverage under your existing plan is sign up within 60 days of leaving your job and pay your premiums on time. For most people, you can stay on your old plan for up to 18 months.

Feeling the financial pain
Nearly as bad as my injury was having to go through the whole medical process without health insurance. Without it, I couldn't find an orthopedic surgeon willing to do the complex surgery I needed unless I paid for the cost of the surgery beforehand.

There's nothing fun about having to dump long-term investments in your brokerage account and accumulate credit card debt to the tune of over $14,000 before anyone will fix your injuries. Each of the three orthopedic screws in my arm cost over $5,000. That's good news for shareholders of Johnson & Johnson (NYSE: JNJ  ) , which made those screws, but it was a big shock to me.

But the charges don't end when you get off the surgery table. There are almost always other costs, such as hospital stays, follow-up doctor visits, and physical-therapy sessions. As I learned, it doesn't take much to add on another $10,000 or more in debt if you don't have insurance.

Adding insult to injury is that uninsured patients are charged, on average, nearly three times as much for their surgical procedures than health insurance companies get charged, according to a 2004 study published in the journal Health Affairs. This happens because uninsured patients don't have the benefit of the lowered charges that health insurers such as Aetna (NYSE: AET  ) , Cigna (NYSE: CI  ) , and Humana (NYSE: HUM  ) negotiate with doctors and hospitals.

Expensive lesson learned
I learned the hard way the Foolish importance of continuous health-care coverage. I could have very easily saved myself all this financial hardship because now -- even having to cover this new pre-existing injury -- I'm paying less than $100 a month for a high-deductible health care plan. I just wish I'd done it sooner. For less than the monthly cost of a couple of Xbox games, I could have saved myself tens of thousands of dollars.

Even if you only intend to be without insurance for a few months, weeks, or days, it could end up costing you a lifetime of financial pain. Please don't make my mistake -- make sure your health-care coverage doesn't lapse while you're looking for a new plan. Getting COBRA coverage is very simple and could save you tons of financial headaches.

Looking for more Foolish financial advice that could help you save thousands of dollars? Check out the Motley Fool Green Light newsletter. You can check out all our money tips as well as get access to our message boards and exclusive content with a 30-day free trial.

Fool contributor Brian Lawler is normally a pretty healthy guy and does not own shares of any company mentioned in this article. Johnson & Johnson is an Income Investor recommendation. The Fool has a disclosure policy.

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