POLICY: Self-employed, and going it alone

If you want to understand why an individual mandate in a community rated state won’t work without both significant reforms to the insurance systems and a whole new range of taxes and subsidies, read this experience of a healthy mid-20s writer in New Jersey who’s self-employed, and going it alone. Of course if she was living in California, she’d be able to buy a much cheaper policy–but then no sick person in California can get individual insurance.

Perhaps enough of this and it will dawn on people that we need a single pool funded by ability to pay….

On a side-note, any idiot can see that a single pool guaranteed universal system would help solo freelancers and small business people. And of course the NFIB leads the charge against it.

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9 replies »

  1. tcoytoe is right. I emailed her and told her to move to California. But of course if we went the Shaddegg way then no sick person in any state could get coverage…
    which always leads back to us needing a dedicated single risk pool funded on ability to pay

  2. The scandal is that Self-Employed’s premium ought to be about $30 a month for the coverage she’s getting. How we get from a reasonable, actuarially determined rate for a healthy 27 year old to $450 a month is a tale of politics. You can bet that mandated coverages, guaranteed issue, community rating, the insurance broker community and state insurance regulators all play a role.
    She is a textbook case of someone who would benefit by a fifty state, Internet based health insurance market. Her story is worth further exploration. . . Peter is probably right- she’s probably better off self-insuring, or having an HSA. At least she can self-fund some of the outrageous deductible w/ pretax dollars.

  3. Bret, I hope you realize that you probably paid about 4 times the “insurance charged” rate for that cat scan since you were in effect paying cash and would be considered without insurance at that point. Another aspect to this dishonest system we call American Healthcare.
    Your Total liability is $13k + PER YEAR, not per incident year to year. I hope you and your family never really get seriously sick for a long time. Having health insurance does not take the worry out of getting sick.

  4. Peter,
    Just to clarify my current policy (Me + Spouse + 1):
    Annual Deductible: $3,600
    Out-Of-Pocket Maximum: $10,000
    Coverage (after deductible): 90%
    Premium: ~$250/mo
    So I guess my total liability is ($250*12) + $10,000
    Or $13k. Almost 1/3rd what I pay in taxes!
    For $3k a year, I’m hedging my bet against catastrophe. Last year my wife had serious food poisoning and the cat scan cost us a fortune. Had it been more serious than food poisoning I would have easily gone over the Out Of Pocket Maximum.
    Side note: I just realized that BC/BS “out-of-pocket” maximums do not include the deductible, but UHC “out-of-pocket” maximums do.

  5. Brian, if I were to be hit by a truck I could sue the other party for my medical bills. Why don’t you calculate what my insurance premium would be if I ONLY carried, “Hit by Truck” Insurance, I’ll bet it’s so low because of the probability that I’d sure buy it if I could get it. But we all know that we’re paying way more for health premiums than just for those improbable occurances. Do you think “Self-Employed” is paying premiums even with those high deductibles based on “Hit-by-Truck”, or all the other stuff she will never get given her own health maintenance measures? As for being wiped out financially by not carrying insurance how do you think “Self-Employed” will survive, or anyone else, who needs to maintain their employment to pay their insurance premiums to continue to cover their medical bills, but which DON”T cover co-pays and deductibles. I’ll bet if she gets sick and misses just ONE premium they’ll cut her off in the blink of an eye.
    Bret, I can’t say your decision isn’t the best one but isn’t your total liability your high deductible EVERY YEAR if you are injured badly enough PLUS co-pays?. Have you calculated the co-pays? How will you pay your premiums to maintain coverage if you can’t work? And you too are taking a chance because it will take you several years before you accumulate enough to cover the 10k deductible.
    I don’t think going without insurance is the solution. I would feel better with insurance, but not in this dishonest system determined by monied lobbyists instead of good healthcare policy. I had insurance, but BCBS made six months of my life hell when they wouldn’t pay legitimate claims of less than $2000 that they ended up paying anyway. I wonder what my life would be like trying to get my medical bills paid by insurance if they were $100,000?

  6. So my first response to this post is that I agree with Peter. I didn’t opt out of the game all together, but it wasn’t hard for me to find catastrophic insurance for my family that was well within my budget, especially considering I can now put money away into an HSA and avoid taxes. Now we pay for office visits and prescription drugs, but so what? $100 to visit the doctor or two tanks of gas? My out of pocket is maxed out at around $10k I guess, but in a few years I should have that amount securely in my HSA. If I do get hit by a bus, my total liability can’t be more than 10 grand. Hell, that’s not even a used car. Let me weigh the value of a 2001 Toyota Corolla or life saving surgery …
    Like I said, that was my first reaction to this post. Then I made the mistake of RTFA. Needless to say the tone and attitude this girl takes toward her own well-being drives me crazy. Instead of berate her, however, I’d prefer to just point out that she’s clearly making a value judgment every time she decides not to go to the doctor. If she doesn’t feel $300 is worth the doctor’s advice, then why should someone else pay for her to go? And, furthermore, what right does she have to force that person to pay the bill she doesn’t want to? Because that other person can afford it? Does her inability or unwillingness to pay really imbue her with supernatural rights? Can she steal from those who “dust off their business suits and look for a job” simply because they can afford her theft?
    We shouldn’t be subsidizing this attitude or this lifestyle.

  7. I too quit playing the insurance game. There is very little ROI when paying premiums. There are fights to cover even promised services. I now let my money work for me by investing it in a high interest savings account. Sure things happen, but I have much less stress now that I no longer have to deal with the insurance company.

  8. Let’s hope you don’t get hit by a truck, Peter. An unexpected event that doesn’t permit planning would wipe most of us out financially.

  9. Self-Employed should re-assess her need for insurance. Think what she could do with those insurance premiums if they were put to keeping herself healthy and put into her own bank as a separate health account for future use. She’d be able to enjoy playing soccer and pay for that broken leg as well. If she can really afford a $10k deductible plus over $5k in yearly premiums, what’s she trying to protect against with insurance?
    Also think about that $10,000 deductible. That’s PER YEAR, not per incident. So if she gets sick, say at the end of a year, she’d have to pay the $10k for that year, then another $10k for the next year, along with her premiums, if she could even work and maintain her income to maintain insurance. Timing is everything.
    I quit playing the health insurance scam game 2 years ago. Health insurance companies play the odds game in their favor, so I thought I’d play the odds game in my favor. I’m healthy, eat right, exercise, sleep well, and save for future health needs. I’ve checked out foreign healthcare and found I can get major intervention surgery at about 1/4 the cost with a vacation thrown in.