Finding Affordable Health Insurance When You’re On Your Own
Published on - May 14th, 2008 (by J.D. Roth) This is a guest post from Jason Gingerich, a volunteer with the Archimedes Movement to work for a comprehensive solution to America’s health care crisis. He also works for a non-profit organization that offers health insurance, among its other products. The views expressed here are not necessarily those of his employer.
In America’s current healthcare system, in most cases, you’re better off with the crowd. Usually, that crowd is your employer or a government pool like Medicare or Medicaid. But sometimes, due to choices you make, or circumstances you can’t control, you end up on your own, with full responsibility for your healthcare expenses. Here are some circumstances under which you might end up needing to seek affordable individual health insurance:
- You lose (or quit) your job.
- You have insurance through your spouse or partner, and they lose or quit their job.
- Your employer or your spouse’s stops offering insurance for you or your family.
- You change jobs, and your new employer has a waiting period before you become eligible for coverage.
- You take early retirement.
In some other circumstances, you may have the option to participate in group medical insurance, but it’s not in your financial interest to do so.
- You are young and healthy, but your employer group has a lot of older, sicker people in it, and your employer makes you bear much of the premium cost for either yourself or your dependents. Keep in mind that if you find yourself in this situation and you opt for your own insurance, you help yourself, but also make it harder for your employer and your co-workers to afford coverage.
- The group plan you are eligible to participate in doesn’t meet your needs. For example, it does not cover doctors or hospitals where you live, or it does not cover particular health condition that you have or are at risk for, or the plan offers richer benefits than you want to pay for.
In any event, if you are shopping for individual health insurance, you need to keep in mind several important things.
Initial considerations
First of all, if you’re choosing to voluntarily switch from group to individual coverage, you need to carefully consider what you’re giving up: government protection from discrimination by insurance companies.
In the group insurance market, the government prohibits discrimination against people by age or health condition. Your employer can’t legally charge you more in premium, deny you coverage, or offer you a reduced benefit plan because you’re sick. In the individual market, insurance companies put you through a process called, “underwriting,” which means they’ll only offer you coverage if they think they’ll get more from you in premium than they’ll pay in claims.
You can look at it as a gamble — the insurance company is betting that you’ll stay healthy (if it’s not a good bet they’ll deny you coverage); you’re betting that you’ll get sick and need healthcare. Underwriting helps them detect if you’re trying to “game the system,” by looking for insurance while you’re expecting big medical bills.
The side effect of this is that older or less healthy individuals end up paying higher premiums, and can even have trouble obtaining any coverage at all. So the game is very different if you’re a 50-year-old female who smokes and suffers from diabetes (you can pretty much forget about getting commercial insurance) than if you’re a 25-year-old male with no previous health problems (companies will be lining up to offer you coverage).
This is one of the wonders of America’s healthcare system — those who need coverage the most are least able to obtain it. It’s also the Achilles heel of presidential candidate John McCain’s health reform proposal — his plans would drive more people into the individual insurance market without adequately addressing this issue. (The Democrats’ plans have problems of their own.)
Shopping for insurance
But right now, you’re not trying to solve the nation’s health care crisis, you’re just trying to take care of yourself. Here are some things to consider as you shop.
- How much risk can you accept? If you can handle a higher deductible, you will save on premiums, and if you stay healthy, you get to keep the money.
- How much premium can you afford? In individual health, you have to keep paying the premium, or you are no longer covered.
- How able are you to save? If you have trouble saving, you will want a lower deductible, or you’ll need to have an emergency fund so that a surprise medical bill doesn’t put you in financial trouble.
- How important is choosing your provider? If you want more choice of providers (doctors and hospitals) and treatments, you’ll want to make sure your doctors are in the insurance plan’s network. If saving on premium is the most important, you may want to consider an HMO. HMOs can provide excellent care at a low cost—they often do a better job at coordinating care than other carriers. But if you disagree with the HMO’s decisions about your treatment plan, you might end up unable to get the treatment you want. (There’s also some risk of that with other carriers).
- Is having coverage for alternative or complimentary medicine (such as massage, chiropractic and acupuncture) important you you? Is it covered? Subject to what limitations? If coverage for these services is optional in your state, it may be cheaper for you to save for them yourself.
- What’s the reputation of the insurance company? Any insurance company is going to have some unhappy customers, but you do want to look for a reputable carrier.
- Tax implications. If you’re considering a lower-premium plan with a higher deductible, make sure that it’s a Qualified High Deductible Health Plan. With such a plan, you can open a Health Savings Account, where you can save pre-tax money on the condition that, when you withdraw it, you use it to pay for medical expenses. These medical expenses can be used for expenses that apply to deductible, or even for expenses simply not covered by your insurance plan. Depending on your tax situation, this can give you substantial savings.
- Discounts. Insurance companies typically get discounts from providers through a Preferred Provider arrangement. This benefits you because you won’t end up stuck with the bill if your doctor’s charge is over what the insurer considers reasonable. The downside is reduced provider choice. Large insurers, or those who give strong financial incentives for you to see a limited group of health providers typically get the best discounts.
- Utilization patterns. Insurance companies have learned from experience that people with higher deductibles and co-pays use fewer health services. Getting less medical care can be good, because unnecessary treatments don’t help, and might harm your health. It can also be bad if you avoid getting treatment or preventive care that you need to stay healthy. If you choose a higher deductible, or a plan without preventive care benefits, make sure you budget enough money to get care for any chronic conditions you have (you don’t want them to get worse!) and get regular checkups to make sure any new conditions are detected early, when they can be treated effectively.
- Maternity care. If maternity care is optional in your state, the only people who buy it are likely expecting an imminent pregnancy, and rates are set accordingly. You may be better off just paying cash for maternity care.
- Other riders. Your agent will likely offer you accident riders and other forms of supplemental coverage. These can have low premiums, but they’re low risk to the insurance company as well.
- Finally, look for limits on the plan. Many plans offer lifetime maximums of $2 million or more. Other limitations can include mental health care, chemical dependency, chiropractic care, physical therapy and diagnostic care. Beware of plans that limits your benefit to only a few hundred dollars a year. For example, I had some friends who signed up with a high deductible plan to save on premiums, but discovered too late that their plan had a $300 annual limit on benefits for diagnostic care. Once that limit was met, they were on there own. You can’t buy much diagnostic care in today’s healthcare environment for $300.
What if you cannot find coverage?
Now that you’ve done all this work, you still could find yourself in a situation where you can’t afford — or simply can’t purchase at any price — health insurance that meets your needs. You’re not alone. In 2006, 47 million Americans found themselves in a similar bind, and the number has only increased since then as costs have risen and employers have reduced coverage. You still might be able to find help. Here are some options for you to consider:
- If you have a low income or are disabled, look for government assistance. Medicaid benefits may be available. Even if you have a moderate income, Medicaid or SCHIP coverage may be available for your children, as a lot of attention has gone to the needs of the uninsured.
- If you have health conditions that make you an unattractive risk to commercial insurers, look into these options:
- COBRA or continuation coverage from your last group health plan. It’s expensive, and it only lasts 18 months, but it’s better than no coverage if you face a significant health risk.
- A state high risk pool or mandated basic plan. (Contact your state department of insurance for details.) Insurers aren’t going to line up to tell you about this, but your state may require them to accept you for a certain health plan. Again, premiums will be high, and benefits may be limited.
- Look for work at a employer (preferably a large one with lots of young, healthy employees), who offers better health benefits.
- If you’re disabled, see if you qualify for Medicare disability. Medicare isn’t just for the elderly, it’s also for people who are disabled.
- Move to any other industrialized country, and you’re covered cradle to grave.
- Move (or travel) to a developing country, where you still might not be afford insurance, but medical care can be much more affordable. Surgeries costing tens of thousands of dollars might be available for hundreds to thousands of dollars in Mexico or India (plus airfare), with excellent quality. If you’re nervous about the cultural and linguistic barriers, look at it this way. There’s a good chance your doctor here has a foreign accent too.
- If you can’t get insurance at all, ask for a cash discount. Some providers will give you a discount similar to what insurance companies receive if you pay cash up front. Point out to the provider that they won’t have to haggle with the insurance company or wait for payment if they take your payment right away. Some providers will give good discounts if you ask. Others actually charge more if you don’t have commercial insurance.
- Some services that you could fomerly only get in a doctor’s office are increasingly available at drug stores and Wal-Mart. Make the most of these services.
- When you do visit the doctor, make the most of it, and ask lots of questions. Take notes, either during the visit or after. Ask the doctor how you can stay well, not just how to treat what’s wrong with you at the moment.
- Manage chronic conditions. If you have asthma, heart disease, diabetes or another chronic condition, learn all you can about it. Manage it yourself, with advice from your physician. You’ll end up saving.
- Take care of your health. Exercise. Eat healthy amounts of healthy food. If you smoke, stop. You’ll feel better, and you’ll probably spend less on health care.
Does this seem daunting? For more and more Americans, it is. Seem hopeless? For many people right now, it might be.
An archaic system
The reasons for this state of affairs are complex. It’s based on a patchwork of systems that has grown up over time, and changing technology has made them obsolete. Long-term, more and more people are going to face this difficulty — not just poor people. Medicare is projected to run a deficit in 2018, and Medicaid coverage will need to drop unless more money is made available.
While this article has been focused on how to meet your current needs, perhaps my best advice is to write your elected officials and urge comprehensive change. To effectively solve our health care problem we need comprehensive reform, which must include cost controls (conspicuously lacking in the proposals from the Democratic presidential candidates) as well as coverage for everyone (conspicuously lacking from the Republicans’ proposals).
In the meantime, the best you can do is to research your options, and make the best choices you can.
GRS is committed to helping our readers save and achieve your financial goals.Savings interest rates may be low, but that’s all the more reason to shop for the best rate.Find the highest savings interest rate from Ally Bank, Capital One 360, Everbank, and more.
This article is about Choices, Health & Fitness, Insurance
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Amen. I know a number of folks who achieved financial independence, and kept their jobs solely for the benefits. They went from “wage slaves” to “insurance slaves” to maintain coverage for dependents with preexisting conditions.
Something needs to be fixed.
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One thing I’d love to hear more about is what to do *before* you move to individual health care. What preventative care should you take care of while you are still covered, such as check-ups, dental work, optical, etc.? What prescription drug arrangements let you take out what you need for a long time?
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Putting the government in charge of it has never been the answer to anything. It amazes me how many people hate the way the government is handling certain things now, but think it is the best solution for health care!
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JD-Timely blog. I’m looking at insurance as I plan to eventually be fully self employed.
@Anne Keckley-Wow, that comment could be incendiary in today’s political environment. You are stepping on a few political toes.
Personaly I agree with you, but not for political reasons. My personal belief is that we need to take responsibility for our own lives. Government run programs go in the opposite direction.
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Cost Controls? Please no, that will cost us more!
So that I can truly upset everybody let me first explain my political leanings. I call myself a conservative with liberal concerns.
So, for example, with healthcare, I love that the Democrats are concerned and want coverage for all, but I absolutely hate their solutions.
To start our frame of mind right, have you watched the Lasik surgery explosion this past few years. Notice all the people that have had it. Notice the huge expansion of its availability yet notice how costs have lowered (not risen like the rest of healthcare)
Why?
True competition. Insurance and its huge bureaucracy along with intervening government bureaucracy have not been involved (about 1/5 to 1/4 of healthcare costs is paperwork) http://tinyurl.com/8godc
They compete directly to us, the consumer. We know how much they charge, the cost isn’t hidden through insurance.
Now look at our healthcare. How much do you pay for an xray?, a ct scan? How much does that compare to the next hospital or the clinic down the road?
Then in a big sense, part of the problem is that there are cost controls. Any government funded healthcare automatically pays much less to doctors and hospitals, etc. We, who have insurance pay the difference. So for every additional percentage of the population that is covered under a governmental program, causes a “squeeze” on us insurance carriers, the less of us there is to pay the difference.
Now, I said that I have liberal concerns! I do want everybody covered, its just that I want to help these people within the boundaries of better competition and us as the consumer having more control of our money.
How?
-First of all the Republican proposal to give us the tax credit for having our own insurance would solve a lot of problems. You can switch jobs, look for a better job, one you enjoy more etc without worrying about insurance. Give us the tax credit directly instead of our employer.
-Second, Health savings account type set up helps save money because we have more control on where the insurance is spent. If we save money we have more money for future events.
-Third, by us having our own insurance (instead of through bulk plans at work) insurance would forced to be more competitive and streamline its paperwork,etc bureaucracy.
Please don’t wish for centralized care. One example why (sorry can’t find article) is that recently British dentists were told to take a vacation for a month although there were 7 million people who needed to be seen because their quota had been filled. Do you really not want to receive care because of quotas?
I am no expert.
I suggest studying this from both viewpoints.
But here is a great site (imho) that I believe we should all be more aware of the solutions it suggests.
http://www.galen.org/
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Please urge readers to be careful about opting to leave the country for health care. Mexican health care is NOT “excellent”! Two friends of mine have died at the hands of Mexican health-care providers, with injuries or ailments that would not have been especially life-threatening in this country.
If you are going to leave the US to obtain adequate health care coverage, go to a developed country. And before you do so, be sure foreigners are covered.
In the “shopping for insurance” department, look into medical savings account plans. These leave a lot to be desired–effectively, the huge deductible leaves you uncovered for routine care and relatively minor problems, the institutions that manage MSA accounts gouge you with service fees, and you pay the same premium as you would for full insurance–but they do cover you for major medical bills, and some of these plans are easier to get than a regular insurance policy. During a couple of years when my employer went with only one insuror, which was so notorious none of my doctors would do business with it, I bought my own coverage through an MSA. Blue Cross had refused to cover me because a doctor (unknown to me) had entered a diagnosis of osteopenia in my medical records; but I had no trouble at all and no hassle getting an MSA plan that covered ALL costs and ANY provider 100% over the $2500 deductible.
And you’re right: I did find that doctors would cut their bills when they knew I was paying out of pocket.
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Just want to clarify — I’m intensely hoping that affordable, universal access to insurance and reasonably-priced medical services become widely available for all American citizens, regardless of employer.
I agree with a lot of what Tim L said. I’m all for transparent competitive pricing for medical services. And for requiring that medical entities charge everyone the same rates (not higher rates for people without insurance).
So many people are completely black/white in arguing about this: the broken profit-driven system we have vs. completely government-run medical system. There is a lot of room for improvements that aren’t at one end of the spectrum or the other.
I’m pretty sure that some government intervention is going to be required to change the system we have in place. Leaving the medical industry to market forces has gotten us where we are now. For example, how are for-profit insurance companies motivated to provide adequate medical care for the people they cover? They aren’t. Employers or cherry-picked individuals pay them, not the individuals who are typically heavy consumers of health care. Wouldn’t they actually become MORE market-driven if the market was the people they served, instead of the big corporations who typically pay them?
Way too much to say about this.
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We must learn to consider prices when hospitals recommend treatments. Doctors and nurses never mention the cost of anything they give patients. In fact, they make patients feel guilty and paranoid for not doing everything possible, as if the hospital is free. It is not free. Imagine a waiter mocking you for “trying to be a hero” because you refuse dessert, or your lawyer telling you it’s “policy” to do six extra billable hours of work as if policy means “mandatory” when it really just means “what they try to do to everybody.” When we, individually and voluntarily, stop letting hospitals charge us as much as they want, insurance might become a little more affordable.
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Can I suggest another option nobody mentioned? It’s one that my husband and I just decided on.
Join the Army, Air Force, or Navy Reserve. (I prefer the Air Force for length of possible deployment)
We get very competitive insurance coverage for the whole family, with GREAT rates, and no pre-existing conditions. Including pregnancy.
Obviously it’s not for everyone, but it is an option for some. Especially if you’re still in school and need a little extra help with tuition, etc.
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The situation the author doesn’t mention is when you are self-employed — a big time for buying your own insurance coverage.
It’s not so bad to pay for yourself, even in a high-deductible plan like I have … but you have to be disciplined and consider medical costs a budget item that you plan for every month, so the occasional $200 or $800 bill doesn’t put you back too much. The health insurance premium is just part of the total cost.
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I’m with Anne Keckler, B Smith and Tim L. (thanks Tim – your comments were more valuable to me than the post to which it was attached!) Why does wanting to avoid depending on government to take care of me equate to being a political decision? I’m with the folks who prefer to make their own decisions and take responsibility for themselves. I have a sincere interest in my life and well being – the folks in Washington, regardless of party affiliation, do not.
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Yes, this is a really fraught subject. Those who want health insurance to be an “individual responsibility” and those who want government out of everything, are, perhaps, people who have never looked at the bills that even a curable cancer diagnosis creates.
I have great health care insurance through my job at a state university — and great health care from the teaching hospital attached to that U — but I was stunned and shocked when I saw the bill for the single shot of white cell booster I was given as part of my chemotherapy. I called to say, “surely this is a mistake” but no, I was assured that more than $2000.00 for one shot, and I needed several over the course of my 8 rounds of chemotherapy, was no mistake. And that was a tiny part of treatment. I had major surgery and also thirty radiation treatments in a brand new latest-machinery clinic… There was no way that tax credits or a health savings account could have covered everything that was spent to keep me from dying.
That was in 2005. Now, I take only a sngle pill every day — one that costs someone without a drug benefit insurance policy more than $10.00/day, but costs me only about $3.00 a day. Not to mention the follow-up medical testing and observation, treatment of my side/after effects (which include lymphedema in one arm — my compression sleeves cost hundreds of dollars and last no more than 6 months, and I’ll need them for the rest of my life…. My health care costs are still high, though my insurance premiums are also high and I think this year is the first time since 2005 that once again I’ll pay more than I use.
I’d be thrilled if everyone could have the kind of insurance I do. If I could see a way that could happen without government intervention, I wouldn’t press for government solutions, but I don’t see how “competition” would help–no insurance company operating on the profit motive would voluntarily insure me now, and as genetic testing tells us more about who is likely to get certain diseases, we’ll have more and more people who look like “poor risks.” Only some sort of social solution, in which we as a society say, “it’s not just about me, it’s about all of us” and are willing — as I was willing before and after I was sick — to pay more than we need to when we’re healthy so that those who need it can get help when they’re sick can health care be available to everyone.
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I normally enjoy this blog, but today’s call for socialized medicine is completely inappropriate. Much of the reason that that healthcare and insurance costs so much today is because of government intervention. As only one small example, insurance costs are driven up by requiring that all insurance providers cover a range of services, many of which customers would not pay for on their own (I wouldn’t want chiropractic coverage).
I respectfully suggest that before encouraging others to clamor for more government “help” that the author read some material at http://www.WeStandFirm.Org and http://www.FreeMarketCure.com
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Many professional organizations offer group insurance plans. And of course you can be a member of a professional organization even if you are unemployed, uninsured, or retired, etc. I have been a member of some of these even when I wasn’t in the profession yet, because I wanted to join that profession.
I don’t know how good their rates would be, but at least you get the benefits of group insurance.
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I was wondering if anyone has heard of http://www.gradmed.com.
I will be leaving my job at the end of june and heading to grad school at the end of august. I’m trying to find something that will cover me for those two months. People have mentioned COBRA, but that seems overly expensive for someone who is 23 and healthy. All I want is something affordable with a high deductible that will cover me in case I break a leg or something over the summer.
Gradmed seems like a decent option, though I’m not sure about the price.
Any suggestions are welcome. Thanks!
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Maybe the answer isn’t the government taking charge of it but it sure isn’t working with the insurance companies in charge of the system. I personally think that we should have the right to pay for insurance comparable to a non qualifying group plan w/o having to be tied to a job. I also believe that the government should provide a minimum standard of health care to its citizens. In this country, we should have the right to be healthy, the right not to die just because we are poor or have the audacity to work for ourselves. It’s insane that insurance companies, even if you are part of a magnificent group plan, won’t pay for cancer treatment. I guess they figure if you will die without treatment that is the better bet for them. Should the government be in charge of health care? Maybe, maybe not. Should insurance companies be in charge, Hell No!
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We have a terrible health care system for cost and devlivery. Right now, with the way it is built, the United States spends between 16 and 18% of GDP on health care. No other industrialized nation is even close to that. Sweden only spends 10% of GDP on health care. France, which is widely viewed as having the best health care in Europe, only spends 8% of GDP on health care. Yet, both have better research facilities and health care delivery, over all, than the US.
What I am saying is that we in the US should be looking to these health care systems (these two specifically, I would argue) for ways to control costs, improve delivery, and improve our medical system.
And anyone who has studied France’s medical system knows that the “putting the government in charge” line is nonsense. The doctors control health care in France.
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Chris wrote: I normally enjoy this blog, but today’s call for socialized medicine is completely inappropriate.
I am baffled. Do readers really view this article as a call for socialized medicine? What is it about the article that leads you to believe that?
While editing this piece, I was careful to be sure it remained focused on facts, not opinions or politics. This wasn’t difficult since Jason steered clear of these himself. I feel like this article does a fine job of laying out the options for those who need individual insurance; I don’t feel like it’s a call for socialized medicine. It certainly wasn’t intended as such. (Neither is this comment meant as a condemnation of socialized medicine!)
This article is meant to be useful for those wanting to find individual insurance (a common question I get via e-mail), not an editorial in favor of one system or the other. (Though Jason obviously thinks the current system is broken.)
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(That being said, I have no problem with a debate regarding various insurance systems in the comments.)
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@JD: My comments, at least, are in response to the last paragraph of the article.
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Ah, I see now how that paragraph could be interpreted as advocating government control. I don’t think that’s what Jason means, though. I think he’s saying that the system needs to be revised, and that the government is going to have to instigate the revision at the behest of consumers. Not that they’re going to have to control health care, but that change has to start there.
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JD
I did not see a call for socialized medicine. I”m not sure where that came from. I do disagree with price controls.
And just to be clear, I am for government help when needed. I just think other solutions that involve being consumer-directed health care should always be the top priority.
And yes there are shots that are $2000 and more (I am a critical care RN). I am more than happy to do my part to help offset such extraordinary costs. But that doesn’t change the basic problems that I highlighted. It would be much easier to help with those extreme cases if the rest of health care was more reasonable.
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I appreciate my “socialized” medicine that Canada offers me. I didn’t pay to have my babies, I don’t pay if my kids have asthma attacks and need to go to the hospital, even for the ambulance ride. I don’t have to watch my neighbours struggle to pay for their kids medical bills. I don’t have to choose between health care and groceries. I don’t even have to worry if I can’t speak, I know that I’ll recieve medical care.
It’s not perfect, but at least its not economic discrimination. In Canada all people recieve good medical treatment. It’s not all about me, but it’s about all of us. It’s about what is right.
I’m glad I’m Canadian.
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The fact that people are concerned and confused over health care choices is a symptom of a disease called ignorance and, as J.D. implies, this post attempts to cure that disease.
The government preys on our ignorance and, all conspiracy theories aside, politicians would have us believe that we need them for solutions.
Being self-employed (and healthy), I actually pay less now than I did with a highly rated group insurance plan with a large and publicly-owned company.
Here are some points to consider:
1. Ask your physician for the “self-pay” price. My family physician cuts the price in half if I pay right there in the office (this illustrates that physicians “pad” their pricing just for the beaurocratic mess of chasing down their payments from health organizations).
2. Get a high deductible plan to lower your premium.
3. Use a health savings account (HSA) or health reimbursement account (HRA) to further deduct your costs.
4. Go to the doctor only when you really need it.
5. Practice preventative medicine with a healthy diet and exercise.
6. Above all, never assume that a health plan is a “benefit” or a “right.”
With the exception of those who are not capable of helping themselves, the greatest “cost” in our health care system is ignorance. If done correctly, most individuals in decent health are better off finding insurance on their own…
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Comments such as “Move to any other industrialized country, and you’re covered cradle to grave.” definitely hint to the authors beliefs on the subject.
I was also off put by what seems like a very liberal-leaning post. Universal health care might sound like a great ideal, but I don’t see it as realistic or right (why should I be forced to pay for somebody else’s bad lifestyle choices?)
@elisabeth (12) – i do sympathize with you regarding your healthcare costs. I am currently debating a genetic test which is going to cost me ~$10,000 out of pocket. Even though the need for this test was *not* due to a problem with my lifestyle, I still fail to understand how it is anybody else’s responsibility to subsidize it.
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I also appreciate “socialized” medicine that Canada offers. All those Canadians coming down to the US for operations really helps the hospitals’ bottom line!
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J.D. asked: “I am baffled. Do readers really view this article as a call for socialized medicine? What is it about the article that leads you to believe that?”
To effectively solve our health care problem we need comprehensive reform, which must include cost controls (conspicuously lacking in the proposals from the Democratic presidential candidates) as well as coverage for everyone (conspicuously lacking from the Republicans’ proposals).
At this point the author crossed the line from offering advice on how to find insurance to advocating specific political positions which are in effect socialized medicine. His “bi-partisanship” consisted of blaming both parties for not increasing government control of medicine enough.
As regards a debate, I’m not really interested in debating this here for several reasons.
One, I’m not an expert on the subject–I merely have an educated opinion.
Two, as a non-expert, it’s difficult to spend the time responding to every CONCRETE counter argument.
Third, my position is based on a) my undestanding of economics, and b) my belief that it’s wrong for anyone to use the power of law to tell me what I do and do not have to pay for. Either of these foundations is simply too large to debate in a meaningful way in blog comments.
As to my criticism of the article, I merely object to he author’s inclusion of political advocacy.
True, if the author had come out in favor of separating state and health-care I probably wouldn’t have objected, but then someone else would have had cause to raise the same objection I did.
As to the author’s idea that the current system is broken, I certainly agree. However, where the author advocates increased government control of the medical system, I beleive that the problem stems FROM government controls.
For what it’s worth, here are my views on the subject:
Insurance companies are equally to blame in that they are the ones advocating for things like forcing you to pay for coverage you don’t want.
Tort law is to blame because it allows people to sue doctors and hospitals for any old thing.
Patent law is to blame because as people clamor to shorten the patent life of pharmaceuticals, drug-manufacturers have to recoup their costs in short and shorter time-spans, thus driving up drug-costs even more.
As to what I did for health-care, I opted out of the group plan, purchased a high-deductible policy from Blue Cross Blue Shield, and use an HSA to fund the deductible.
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@The Financial Philosopher: What are your plans for when you are no longer “in decent health”?
My DH has pre-existing conditions, so this is an issue for us. Our options for self-insurance would be limited and expensive.
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Ken writes: Comments such as “Move to any other industrialized country, and you’re covered cradle to grave.” definitely hint to the authors beliefs on the subject.
Ha! Okay. Good point.
Just a quick note: In general, I try to keep politics out of Get Rich Slowly. That’s not always possible of course, but it doesn’t usually matter. I’m all over the board politically, neither liberal nor conservative.
My guest posters, however, have their own opinions. And while I try to tone down the political aspects of certain posts, I’ve published articles that were blatantly conservative and I’ve published articles that contained obvious liberal leanings. I’ll publish such articles in the future, too. It doesn’t matter to me which side of the political fence you’re on — we’re all trying to save money. I know that it matters to some readers, though, so I do try to keep politics out of the blog as much as possible.
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Also, I contacted Jason for clarification. His response: “Socialized medicine is one possible solution to the problems I described. There are others. I’m open to either.” I think Jason just wants people to have access to quality, affordable health care, and he doesn’t think the current system in the U.S. is particularly effective at delivering it.
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Just a quick note on COBRA: While it is true that you pay more out of pocket for this coverage this is only happening because you are paying your share pluss what your employer was paying.
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I would like some opinions and thoughts about CHOOSING not to have health coverage. What if I chose to put the money I currently pay for my health insurance premiums in a savings account instead? What if I paid my family’s minor visits and such out of that fund, and for higher cost visits, emergencies, hospital stays etc., I made payments to the doctor or hospital instead of into an insurance plan? As long as I am making regular payments to the doctor or hospital I would think I am still being financially responsible? And that as long as I am making payments, my credit could not be harmed or my home or possessions at risk? I think the cost of insurance has reached a point where it is just not worth having anymore. Please tell me ehat I am missing here! All comments/viewpoints welcome!
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@Theresa
JD has actually written about something similar to what you’re asking before, and I’m considering this as well. I wouldn’t ditch the insurance all together, but find a low premium, high deductible health insurance plan for emergencies, and then open a health savings account to do as you state with.
The benefits here are that the high deductible insurance gives you coverage for the catastrophic stuff, and enables you to open the HSA in which deposits can be made pre-tax.
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TosaJen:
You asked, “What are your plans for when you are no longer ‘in decent health’?”
My health plan, while individually purchased, is done through a network of primarily self-employed individuals, such as myself.
While there is no such thing as a “guarantee” in any health plan, my contract does not refuse care or drop my coverage for health conditions arising after the initial contract date.
As long as I pay the premiums, I’m covered, both in sickness and in “decent health.”
If you want more information, contact me through my blog…
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FYI, in many states, if you are already a USAA insurance customer (house, car), you can also add reasonably-priced health insurance. My brother discovered this when he was between jobs; COBRA was outrageously expensive, USAA was about 50% less.
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Looks like some great discussion. In response to the comments that I’m advocating “socialized medicine”, I want to offer a couple of comments.
First of all, we already have half-socialized medicine. Medicare and Medicaid pay for about half of health care costs in this country. Our tax code gives tax break to employers who offer insurance as a benefit to employees. So it’s a bit ignorant or dishonest for some people to oppose changes because it would be increased government involvement.
While the article focuses on what to do under the current environment, I really would like to see a solution that involves the government. Here are some possible options:
1) Get the government out. Abolish Medicare, Medicaid and tax breaks for employment based insurance. Eliminate privacy protections, state mandates for various kinds of coverage (mammograms, mental health treatment, etc.) Eliminate the requirement that hospitals treat people with no insurance when they arrive at the ER. This is a true libertarian solution. I don’t advocate it, but if you really want the government out of health care, this is what you are asking for.
2) Socialized medicine, like Great Britain. In the US, the VA operates this way and provides excellent care at a low cost. Doctors would work for the government, most hospitals would be owned by the government. If you wanted to avoid waiting for elective services, you could buy private insurance or treatment at your own expense. The system works well in Britain, but it wouldn’t likely work here because we have so much invested in the current system. At a minimum, there would be a rough transition.
3) A private public partnership that makes sense under today’s environment. This is what we are working for at wecandobetter.org. The government would establish rules and minimum standards for care. It would reward healthy behavior by individuals, and treatment that produces health for healthcare providers. It would. Everyone would be covered. Standardization would reduce administrative costs, but there would still be a role for private (profit or nonprofit).
4) Programs like the democrats are offering involving individual mandates without reforming the delivery system. These would not solve the cost problem, which is the root of the problem. The current experience in Massachusetts is an example of a program like this. Contrary to what John McCain says, these programs are very different from the socialized medicine that would be envisioned under option 2.
5) Programs like John McCain recommends. This is a somewhat watered-down version of option 1.
Thanks for debating, and please join our debate at wecandobetter.org.
Jason
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I just wanted to highlight Jason’s comment on pregnancy and maternity coverage.
If you choose not to have children (or any additional children), dropping maternity care can save you a lot of money. I’ve heard that brand-name drugs and maternity costs are the two largest cost categories for insurance companies, and they’re very happy if you don’t need to take advantage of either of those.
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@Ken “Comments such as “Move to any other industrialized country, and you’re covered cradle to grave.” definitely hint to the authors beliefs on the subject.
I was also off put by what seems like a very liberal-leaning post. Universal health care might sound like a great ideal, but I don’t see it as realistic or right (why should I be forced to pay for somebody else’s bad lifestyle choices?)
@elisabeth (12) – i do sympathize with you regarding your healthcare costs. I am currently debating a genetic test which is going to cost me ~$10,000 out of pocket. Even though the need for this test was *not* due to a problem with my lifestyle, I still fail to understand how it is anybody else’s responsibility to subsidize it.”
Do you consider Cancer a lifestyle choice? Or a baby born with AIDS, oh wait, it was his parent’s lifestyle choice, right?
As for not wanting to subsidize someone else’s cancer treatments, you should probably also not subsidize the police department, fire station, your local schools, and the highway department either — I mean, its other peoples lifestyle choices that cause the need for these, right?
I have no kids in school, I have never had use for the police or the fire department, and don’t drive on most of the roads in my area, but I still pay my taxes. Welcome to life.
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@Ken: Yes, I have looked into HSA’s extensively. They seem a much better way to go for most people that are in reasonable health. Certainly, they could save you tons of money should something major happen instead of being uninsured and being socked with the whole balance. If my insurance goes up again this year (who am I kidding? it will!) then I will definitely go the HSA route. Still, I can’t help but wonder if I would be further ahead by paying for my medical expenses myself, while saving for possible major medical costs (instead of making insurance premium payments) and making payments on the larger balances when needed.
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I agree, I can’t find in the article a call for socialized health care. My husband falls into the category that no one will insure him because of his pre-existing condition he has had since he was 4. We opted for COBRA and not state assistance when we were between jobs.
What amazes me is how many people just leave their jobs thinking they are healthy and assuming they can purchase health care. That is not always the case. This article was great. Thank you.
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Teresa,
Choosing to go without health insurance entirely and instead save money on your own takes on considerable risk of very high health care bills. Major medical costs can be truly astronomical. Sample prices: Heart Bypass $130,000, Hip replacement $30,000, liver transplant $650,000. While its not likely you will have to go through any of these procedures, there is always a risk that something serious could happen. Would you really be able to afford a major procedure simply by saving your own money? Its unlikely. If you do not have insurance then a major medical expense would likely wipe out most people financially.
If you want to try and save money then personally I’d agree with Ken’s recommendation to get a high deductable insurance plan and an HSA. That way you will avoid most costs of comprehensive health insurance but still be covered in the unlikely event of a major medical cost.
Here’s some food for thought, even a broken arm can cost $12,000 :
http://www.examiner.com/x-215-Douglas-County-Examiner~y2008m4d8-Cost-of-a-broken-arm–12000-and-counting
Jim
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A friend of mine recently posted on his blog a breakdown of his experience buying insurance for his family of 5. An interesting story for sure and I only wish that my company would move (quickly!) to a catastrophic insurance system like what he describes.
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To follow up on what Jim said, there’s another good reason to get individual insurance now even if you are healthy. Insurance companies are not legally allowed to increase your premiums because you get sick (this only applies to individual policies). That means that if you get a good rate before you develop an expensive condition, you’ll still be able to get cheap health insurance for as long as you’re willing to pay the premiums.
There are some exceptions to this, but in general the cost of individual health insurance premiums can not be increased beyond that of the rising cost of medical care in general.
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I have been self-employed for years. I have had individual policies in the past but found that the best approach for our family (2 adults, 4 kids) is to set up a group policy through a corp or llc. As long as there are two officers in the corp you can get a group policy through Blue Cross or similar providers. You then don’t need to worry about the problems associated with individual policies.
That said, the policy we have is twice a expensive as an individual policy. However, one of my childen had a pre-existing condition and would likely have been denied if I had attempted to get an individual policy.
One other thing – my health insurance agent stressed the importance of not getting denied during the individual policy application process. Accoring to the agent, once you are denied it will be a lot harder to ever get coverage with that carrier again. Does anyone know if this is true?
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If you are on an individual insuance program make sure you OPEN EVERY PIECE OF MAIL FROM THE INSURANCE COMPANY AND READ IT. Several years ago, my family got booted off an insurance contract because I didn’t, and I missed a “re-enrollment” form that needed to be filled out. We had not missed a single payment.
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@Heidi:
“Do you consider Cancer a lifestyle choice? Or a baby born with AIDS, oh wait, it was his parent’s lifestyle choice, right?
As for not wanting to subsidize someone else’s cancer treatments, you should probably also not subsidize the police department, fire station, your local schools, and the highway department either — I mean, its other peoples lifestyle choices that cause the need for these, right?”
If you had read my comment you would see I didn’t say that..cancer is not a lifestyle problem, nor is the CADASIL which I go through (google it). I don’t expect her to pay for mine, nor me for hers, nor you for either of ours.
“I have no kids in school, I have never had use for the police or the fire department, and don’t drive on most of the roads in my area, but I still pay my taxes. Welcome to life.”
I choose to believe that because things are the way things are does not mean that its the way they should be. I would argue that every one of the organizations you mentioned would be run better and more efficiently in the hands of the market than with the government. However that is just my opinion and I will not attack yours if you give the same consideration.
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I can tell you that it is a nightmare dealing with insurance issues when there are health problems involved. The cobra for my 3 person family was $1400/month. It took three months for all the companies (previous employer, payment service and insurance company)involved to talk to each other so that we would have our coverage. It finally required a number of calls to the Department of Labor to get the companies to cooporate. During that time I had to pay for everything out of pocket, even though I had paid for my insurance. Then getting reimbursed has been next to impossible.
We don’t dare let insurance lapse because my husband has diabetes. And now at his job, we are responsible for 100% of insurance costs at $1500/month.
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First:
Heidi, thank you for being a voice of reason. And might I add, “why should I pay for the military when I don’t agree with how they are being used?” Government is about being responsible for others. The alternative is anarchy. You think government is bad? You would REALLY hate anarchy!
Second:
Under our current failing system, affording health insurance is also only half the battle. The other half is when you get sick, and the insurance you’ve been paying for years denies coverage for the treatment you need, or creates a bogus reason to deny payment of your claims after treatment, just when you need them the most. Insurance companies should be forced to list all illnesses for which they will not pay at time the policy is purchased, and then be estopped from denying reimbursement for all future illnesses [barring fraud from the medical provider]. If insurance companies cannot make money under that condition, they have no business selling insurance.
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One more story – my father-in-law was downsized at the age of 61. Their health insurance costs were $34k/year (after cobra ended until medicare coverage began). How many of you would be able to afford that? Trust me, the worst case scenario can happen to anyone and our medical system in obscene. We definitely need health care reform and I for one, would be totally in favor of socialized medicine. It is only a matter of time before insurance becomes too costly for any but the biggest employers to subsidize.
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Saying that you don’t want to “subsidize someone else’s cancer treatments” is immature and shows a real lack of understanding. Insurance is a financial device for spreading the cost and “subsidizing” healthcare. So you are already doing it. Surely @Heidi, there is someone in your family who need healthcare at one time, and if they weren’t sleeping in a cardboard box at the end of it then the “subsidy” worked. Even you will one day grow old and need healthcare.
The biggest problems are out of control costs for prescription drugs, hospital procedures and companies who weigh the cost benefits of giving you care vs letting you die .
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