The mutli-factorial equation of individual insurance

I’m up at Spot-on talking about the perils of being in the individual insurance market and wondering whether I should get out. As ever, come back here to comment if you please.

I want to ask your help. I have to make a financial decision
regarding my health insurance and given the confusion of the system –
one I’m supposedly expert in – I need advice.

Now realistically you’re not likely to be much good to me. Why do I say this? Well, the data says you’re dummies.

Last week Trizetto, a private tech company, put out a survey that said as much. While 80% of consumers surveyed were concerned about health care costs, less than a third knew how much their family spent.

It gets worse. Around 60% of Americans, including the vast majority
of those under 65, get their insurance from their employer. How much
are employers paying each year? Well according to Joe Public, not that
much. Most don’t know, or they think it’s less than $5,000 per family. In
reality it’s around $9,000.

But I’m not one of the blissfully ignorant who gets his
insurance at the company trough. Well, not quite. And hence my cry for
help. Read the rest

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3 replies »

  1. I thought COBRA was only good for 18 months. You write that your wife would get 3 years?

  2. The other plus of double coverage is that IF something should happen to the individual and they can’t afford their coverage anymore then they can take a risk and rely on the spouses coverage.
    By having been covered under the spouses plan they should be able to avoid any pre-existing condition exclusions when they drop their individual coverage.

  3. One other option you may want to consider (I know, I know: just what you need — another choice) is seeing if California allows small-group policies of two people.
    Incorporate your consulting business, if you haven’t already, with your wife as the president and you as the sole employee (I know, I know: a weird set-up, but bear with me). Then you go shopping for a group policy and see what you come up with. You’d be subject to underwriting, of course, and I don’t know what kind of rules California has for small-group rates, but at least it would be guaranteed-issue.
    Also, I know for sure that your premiums, as the employee, will be tax deductible, and I believe hers would be as well.
    It would result in double coverage on her, because I doubt she’d want to drop her group policy, but double coverage has its advantages; anytime there’s a copay, the second insurer generally picks it up, and voila, you have zero-out-of-pocket coverage, at least on her.
    I’m not sure what this does for your what-if-she-leaves-me dilemma, but I would imagine that the incorporation of your firm, and thus the group policy on you, could survive even if the marriage doesn’t. You could appoint a trusted friend or relative as the new president at a token salary and get them covered for their trouble, I suppose.