How I Purchased Private Health Insurance
Finding affordable health insurance was one of the biggest obstacles we faced when I quit my job. My husband is a self-employed performing artist (juggler/musician). We had always relied on my job to pay for our insurance.
Health Insurance is a complicated issue. We knew we needed to have health insurance because without it we could face financial ruin; but I didn't want health insurance to stop me from quitting a job I hated to pursue my dream of working for myself.
Before I quit, I spent hours researching different health care options. This post is about what I learned.
Finding the Right Health Insurance Plan
There were so many plans with so many options it was hard to keep everything straight. Our best option was to keep my newborn son on a separate plan. It would allow him to have much better coverage and let my husband and me purchase a cheaper plan for us, to save money.
At that point we lived in the state of New Hampshire. There was a program through the state that allowed you to buy in to their insurance program for kids. The coverage was excellent. At the time the payment was about $100 per month for just my son.
The plans for my husband and me were limited and expensive. I spoke to a few qualified agents. I researched and found reviews on the internet. I needed to make sure the plan fit our budget, had benefits that fit us, and had a good reputation.
It seemed like we had two options:
- A PPO/HMO plan which had a lot of benefits and a high monthly cost.
- A high-deductible plan that didn't have a lot of benefits but was less expensive.
With the high deductible plan, we could also sign up for a Health Savings Account. An HSA is a savings account that allows individuals to save for medical expenses tax-deferred.
We seemed like perfect candidates for the high-deductible plan. We were 25 years old and very healthy. We rarely went to the doctors. We were frugal and could pay attention to the cost of our health care.
In 2007, a high-deductible plan for two adults was $192 per month with a $5,000 deductible. We had over $20,000 in our emergency fund, so we figured we could pay for most health emergencies. Our total cost per month for health insurance for our family would be $292.
After thinking about it more, I realized I had to take into account the possible loss of income too. If my husband injured his hand, he couldn't juggle. If either of us had a serious injury and couldn't work, we'd need our emergency fund to pay for bills. We decided to save an additional $5,000 to put in our HSA to help with that risk.
A Problem with the Plan
We had the plan for a year before I realized we were losing money. I had signed up for the preventative option so we could have regular health check-ups covered for my son. It turned out that the option had a cap of $200 per year. I was paying an extra $22 per month. That meant I was losing at least $64 per year.
I thought I had inspected every inch of that plan. There were just too many options and rules. Needless to say, I canceled the preventive option.
New State, New Insurance
When we moved to Maine, we had to find new insurance. I had to spend hours researching again. There are only three health insurance companies here, and the premiums are a lot more expensive because Maine doesn't discriminate. Everyone has the ability to get coverage.
The high-deductible plan and HSA seemed to work well before. Since the prices were so much higher here (our previous plan would have been almost $600 per month), we increased our deductible to $10,000. To avoid more risk, we increased the amount of money in our HSA to $10,000. Our current plan costs $483 for a family of four. (We welcomed a new little girl last year!)
Paying for Visits
Having a high deductible means we have to pay for doctors visits. Many people I talk with have no idea what a doctor's visit costs. A normal doctor visit costs us $92. If we pay within 21 days, we receive a 10% discount.
I've realized how great it is to pay attention to costs. I feel so much more involved in the process of our health. My daughter's doctor wanted to do a test, so I asked how much it would cost. She said that she never looks at the cost of the procedures. The test was $2,000 and it wasn't medically necessary. If a procedure is important to your health, you need to spend money on it; but I was able to save $2,000 because I did my due diligence to research and ask for second opinions about my daughters care.
Last year we spent about $2,800 on medical expenses. That included all wellness visits for my one-year-old daughter, about seven appointments for illnesses, and two emergency room visits.
A Learning Process
Figuring out what fit for us has been a learning process. Since I can't predict the future, I don't know if this plan will fit us 100%. If I have a big disaster come up and my plan lacks adequate coverage, I'll have to learn from it and adjust.
There's a delicate balance of living the life you want and mitigating risk. I'm still finding the balance, but I do my best to keep my family debt-free, healthy and living the life we want.
Do you have any ideas or suggestions for my plan? What has worked for you, and what hasn't?