Author Topic: Healthcare self-insurance?  (Read 21063 times)

beltim

  • Magnum Stache
  • ******
  • Posts: 2964
Re: Healthcare self-insurance?
« Reply #50 on: September 03, 2014, 09:31:15 AM »
Those under 65 have about a 10% chance per year of incurring a medical bill over $30,000.  Even for the lowest cost group (25 to 34), it's still a 5% chance per year.


http://www.nytimes.com/2013/11/20/your-money/weighing-the-risks-of-going-without-health-insurance.html?pagewanted=all&_r=0

beltim

  • Magnum Stache
  • ******
  • Posts: 2964
Re: Healthcare self-insurance?
« Reply #51 on: September 03, 2014, 09:33:19 AM »
Here's a list of common medical conditions and some average costs (doesn't say anything about the frequency of 2x or 10x the cost, though):
http://www.aflac.com/individuals/realcost/source/

Gin1984

  • Magnum Stache
  • ******
  • Posts: 4850
Re: Healthcare self-insurance?
« Reply #52 on: September 03, 2014, 09:37:19 AM »
I......  Am confused.  I cannot conceive of how you think this is a good plan. 

Your example of cancer, sure, maybe you have time to go divorce your wife so you can enroll in a policy before you start treatment.  Or maybe you will go in for a check-up and leave with surgery three days later.

Car accident:  good luck.  You could be talking hundreds of thousand of dollars within the first week. 

My husband went into the hospital for an angiogram, they were expecting to find nothing (he had had a weird stress test, but was in his 30's, healthy, no family history, not a smoker, etc) and left the hospital a week later with a triple bypass and over 500k of hospital bills.  Even if the insurance company hadn't paid a dime, they at least negotiated those bills down to around 250k!  That alone is worth the monthly premium!

If you truly have enough money to self insure, fine.  But that is going to look like a million, at least, just set aside for medical costs, IMO.
I'd like to point out that divorce only counts if it changes your insurance/ access to said insurance.  Divorcing her when you both don't have it won't help you, except if you then are eligible for medicaid.

APowers

  • Handlebar Stache
  • *****
  • Posts: 1290
  • Location: Colorado
Re: Healthcare self-insurance?
« Reply #53 on: September 03, 2014, 10:28:07 AM »
I would just like to point out that I am still working my job, and still getting health insurance. I bring up the topic, precisely so we can argue about it and hear the reasons why "it's stupid" on the one hand, and the reasons why "it's unreasonably expensive" on the other.

If we're going to talk about risk vs. reward, then maybe we should find some real data on how likely a catastrophic medical event (say, $40-50k or more) would be. It seems like everyone says "it's not worth the risks to go without health insurance", but do we actually know what the risk is?

That's a lazy dodge.  You want to discuss all the various kinds of risk of things that could happen that could be expensive.  You want the discussion because you want to feel justified in quitting a job with insurance and then refusing to get insured through the private market.

Risk assessment for insurance is more than odds of a bad thing happening its the odds of the bad thing happening vs your ability to pay for it.  You don't expect to get sick, but last I checked few people expect to get cancer.  Few are able to schedule an appendix removal months in advance.  And no one can pencil in a quick double bypass between work meetings.  If you leave a job with insurance you will need to have some form of real, honest-to-god coverage to cover catastrophic events.   If you don't take the subsidy from the exchange then you're just buying a policy on the private market - a contract between you and the insurer.

Or maybe I want the discussion because I think it's a useful discussion to be had.

I think the response of "but what if you get X condition" is a fear-based response when we don't know what the actual risk of a high-cost medical expense is. I think we would be more productive in discussing how necessary health insurance is if we were approaching it with "the odds of such and event happening are xx/xxx, and based y factors, it's a better choice to carry expensive health insurance than not." but no-one seems to know that data. I know I couldn't* find it with a quick internet search for "likelihood of expensive medical bill" (and similar searches).

*I did find one blogger who had found one random statistics chart that appears to show the odds of a >$50k medical expense to be 1% or less:

OzzieandHarriet

  • Bristles
  • ***
  • Posts: 415
Re: Healthcare self-insurance?
« Reply #54 on: September 03, 2014, 10:55:40 AM »
Anyone against "welfare" who defines it as government paying for things shouldn't drive on public roads, buy anything using money, use public education and libraries, drink tap water, call the police or fire department etc. The government is us. It's our money, paid via taxes, pooled for the public good.

As for health care costs, the status quo has been that the cost of health care and insurance for people with jobs were being subsidized by their employers, and everyone else was out of luck. The ACA is an attempt to even the score by making this type of insurance accessible to more people and to regulate what it covers to avoid people paying good money for worthless plans (and there are so many horror stories about this -- people spending tens of thousands of dollars and then not getting coverage when they needed it).

Unfortunately, there have been a lot of glitches and problems, and these have stemmed from individual states running the exchanges and opting in or out of the tenets of the law. Probably unavoidable given the reality of politics in our country. But there is also the reality of people getting health care who had no access to it before.

The bottom line is that without health, you don't have much. Some things are more important than money.

Metta

  • Pencil Stache
  • ****
  • Posts: 670
Re: Healthcare self-insurance?
« Reply #55 on: September 03, 2014, 11:18:28 AM »
The least expensive health insurance plan that I could find with a quick quote (esurance, WA state) was over $600/mo! That's with a $10k deductible. That's more expensive than my mortgage every month, for something that I really am not that likely to need. That's what gets me. If I could afford to throw away $600-750 every month on premiums, I might just save that money and could then EASILY swing $10k in medical costs annually (without really even affecting our savings rate), and more expensive procedures less frequently, especially considering we don't need anything currently.

I understand that the unexpected can happen. That's why I'm very reluctant to just go without. But when it's so expensive, I just have doubts as to whether it's really a cost-effective way of providing good healthcare for the family.

I'm curious. You have a mortgage, which means that you have home insurance. Your chance of making a serious claim for something like fire or flood is probably less than 1 percent a year depending on where you live. Do you plan to drop that insurance when your mortgage is paid off? It seems to me that a serious illness or accident (chance is 5% if I'm young male and healthy) is far more of a wealth destroyer than having my house burn down to the ground (.08% chance) and I'm insured against that. And if my house burns down, I can step up my income earning to make up the money. If I'm in the hospital or laid up in bed, not so much.

 

yandz

  • Stubble
  • **
  • Posts: 122
Re: Healthcare self-insurance?
« Reply #56 on: September 03, 2014, 11:27:09 AM »
From a different perspective, I think you should re-look at your thoughts on "welfare" - in your case, there would be both a give and a take.

For a moment, let's forget about insurance company profits. Now, there will be glitches and mis-steps in getting nationwide health coverage sorted. It may get worse before it gets better, but in theory, this works. The pricing is set based on all the people (the sick ones, the healthy ones, the young ones, the old ones, the poor ones, the rich ones, all the risk categories) paying in so that their AVERAGED risk is accounted for and those who need it are cared for.

Part of the problem with our previous system was that much of the population "opting in" to insurance were those who knew they needed payout larger than their pay-in combined this those who did not have insurance but sought expensive care anyway but defaulted, leaving unpaid cost in the system. We have a third population who are very healthy, low risk individuals who are unlikely to need care any time soon (but plan to get it when they become costly to the system). Many are not insured because the "don't need it" - the risk vs. reward didn't prompt them to pay in. (I get it. I am that person but I am still insured). The ACA requires all these groups to pay in and those who need it will receive payout. Those of us young and healthy are providing welfare...for now...with the thought being that overall, the risks and reward are balanced among the population. 

You are hesitant to take the subsidy but you are also mad that you are providing a subsidy (paying in to a system you "don't need").  Get the insurance and have it subsidized. If you stay as healthy as you say, it is a wash. If you get sick (a low risk, but a risk) then you are one of the 10% that needed high dollar insurance and lucky you! you have it!


APowers

  • Handlebar Stache
  • *****
  • Posts: 1290
  • Location: Colorado
Re: Healthcare self-insurance?
« Reply #57 on: September 03, 2014, 12:09:37 PM »
The least expensive health insurance plan that I could find with a quick quote (esurance, WA state) was over $600/mo! That's with a $10k deductible. That's more expensive than my mortgage every month, for something that I really am not that likely to need. That's what gets me. If I could afford to throw away $600-750 every month on premiums, I might just save that money and could then EASILY swing $10k in medical costs annually (without really even affecting our savings rate), and more expensive procedures less frequently, especially considering we don't need anything currently.

I understand that the unexpected can happen. That's why I'm very reluctant to just go without. But when it's so expensive, I just have doubts as to whether it's really a cost-effective way of providing good healthcare for the family.

I'm curious. You have a mortgage, which means that you have home insurance. Your chance of making a serious claim for something like fire or flood is probably less than 1 percent a year depending on where you live. Do you plan to drop that insurance when your mortgage is paid off? It seems to me that a serious illness or accident (chance is 5% if I'm young male and healthy) is far more of a wealth destroyer than having my house burn down to the ground (.08% chance) and I'm insured against that. And if my house burns down, I can step up my income earning to make up the money. If I'm in the hospital or laid up in bed, not so much.

My home insurance is $46/mo for full replacement, with a $5k deductible. I've considered going without, but considering that I expect my house to provide future income as a rental, I think relatively inexpensive insurance is reasonable. I think inexpensive catastrophic-type health insurance (say, $20-30k deductible and a low premium) would be acceptable, but that doesn't appear to be anywhere on the market.

Beric01

  • Handlebar Stache
  • *****
  • Posts: 1156
  • Age: 30
  • Location: SF Bay Area
  • Law-abiding cyclist
Re: Healthcare self-insurance?
« Reply #58 on: September 03, 2014, 12:13:03 PM »
I think inexpensive catastrophic-type health insurance (say, $20-30k deductible and a low premium) would be acceptable, but that doesn't appear to be anywhere on the market.

Yup, we're both in the same situation. Thanks to the ACA, there is no longer any reason for these plans to exist, as they do not count towards "minimum insurance".

beltim

  • Magnum Stache
  • ******
  • Posts: 2964
Re: Healthcare self-insurance?
« Reply #59 on: September 03, 2014, 12:37:12 PM »
The least expensive health insurance plan that I could find with a quick quote (esurance, WA state) was over $600/mo! That's with a $10k deductible. That's more expensive than my mortgage every month, for something that I really am not that likely to need. That's what gets me. If I could afford to throw away $600-750 every month on premiums, I might just save that money and could then EASILY swing $10k in medical costs annually (without really even affecting our savings rate), and more expensive procedures less frequently, especially considering we don't need anything currently.

I understand that the unexpected can happen. That's why I'm very reluctant to just go without. But when it's so expensive, I just have doubts as to whether it's really a cost-effective way of providing good healthcare for the family.

I'm curious. You have a mortgage, which means that you have home insurance. Your chance of making a serious claim for something like fire or flood is probably less than 1 percent a year depending on where you live. Do you plan to drop that insurance when your mortgage is paid off? It seems to me that a serious illness or accident (chance is 5% if I'm young male and healthy) is far more of a wealth destroyer than having my house burn down to the ground (.08% chance) and I'm insured against that. And if my house burns down, I can step up my income earning to make up the money. If I'm in the hospital or laid up in bed, not so much.

My home insurance is $46/mo for full replacement, with a $5k deductible. I've considered going without, but considering that I expect my house to provide future income as a rental, I think relatively inexpensive insurance is reasonable. I think inexpensive catastrophic-type health insurance (say, $20-30k deductible and a low premium) would be acceptable, but that doesn't appear to be anywhere on the market.

And, when you take into account the roughly 100-fold greater chance of requiring health care that costs more than $30k, and the roughly 10-fold lower expected payout, a difference in health insurance premiums of roughly 10x makes perfect sense.

We can look at the short-term health insurance market to see what the difference in deductibles would do to the insurance premium.  I looked at short term policies on ehealthinsurance for a zip code in Miami (33014).  6-month policies for a 27 year old male, nonsmoker were as follows:
$2500 deductible:  $134/month
$5000 deductible: $116/month
$7500 deductible: $100/month.
Now, those policies have a lifetime max of $1 million, so they don't serve as a panacea because part of the point of insurance is to guard against the multimillion dollar crises.  So, let's compare that to the cheapest ACA-compliant "catastrophic" plan, the one with a $6350 deductible, no lifetime caps, you can't be denied coverage, and includes those pesky preventive doctors visits that Beric hates so much.  That cost is $153/month. 

Now, let's look at the next step up: Bronze plans, which are pretty close to the catastrophic plans ($6300 deductible, no office copay).  The cheapest bronze plan is $166/month.

So, there are some data points for you.  The difference in premiums between the ACA-compliant plan with max deductible isn't very high, at least in my example (I encourage you to get more data points to compare!).  And, we know from other markets that further increases in deductible don't make a huge difference in premiums.  You and Beric would both love a $50/month catastrophic plan with some high deductible, but such a plan would lose money because too many people make claims.  The actual cost of providing such a plan is much, much higher than you're considering.

bogart

  • Handlebar Stache
  • *****
  • Posts: 1074
Re: Healthcare self-insurance?
« Reply #60 on: September 03, 2014, 01:35:59 PM »
Here are two additional data points about the distribution of per-capita health-care expenses in the U.S.  I can't speak to the quality of the NIHCM link (I'm not familiar with the organization); AHRQ is legit.

http://www.ahrq.gov/research/findings/factsheets/costs/expriach/index.html#HowAre

http://www.nihcm.org/pdf/DataBrief3%20Final.pdf

But the OP's not really interested in the average per capita risk; hers (as a member of a youngish household with no known pre-existing conditions) will be lower -- on the one hand.  On the other hand, whatever the underlying risk is, it needs to multiplied by 4 -- the OP and the other 3 members of her household.

As for the comparison to home insurance, useful as far as it goes.  And of course the home does bring with it (as any would) some tiny risk of high-end liability claims, if nothing else.  But real estate, unlike the OP and her family, is replaceable.

On that "replaceable" note I'll say, too, that as the mom to an elementary schooler -- I've always been one of those people who says that I value the quality of life over its duration.  But once my son came along, I realized pretty quickly that during ~ his first two decades I'd value extending my own life (assuming consciousness and the ability to interact with him in a meaningful way, even if only from my bed) a lot more than I think I would in other phases of my own life course.  So I don't for a minute doubt that I might now, and for the next 1.5 decades or so, if faced with such a choice, choose to pursue expensive life-extending (one hopes) therapies that I might reject in different circumstances.  All of which is a convoluted way of saying that at least for me, having access to expensive medical care if needed is that much more important (and worth paying for) to me as a parent to a not-yet-adult than it would be otherwise.

beltim

  • Magnum Stache
  • ******
  • Posts: 2964
Re: Healthcare self-insurance?
« Reply #61 on: September 03, 2014, 01:53:05 PM »
Here are two additional data points about the distribution of per-capita health-care expenses in the U.S.  I can't speak to the quality of the NIHCM link (I'm not familiar with the organization); AHRQ is legit.

http://www.ahrq.gov/research/findings/factsheets/costs/expriach/index.html#HowAre

http://www.nihcm.org/pdf/DataBrief3%20Final.pdf

But the OP's not really interested in the average per capita risk; hers (as a member of a youngish household with no known pre-existing conditions) will be lower -- on the one hand.  On the other hand, whatever the underlying risk is, it needs to multiplied by 4 -- the OP and the other 3 members of her household.

This is also very good data.  To put it into dollar figures, it says that 1 in 20 Americans spends an average of $89,000 in health care in a year, and 1 in 100 spends an average of $195,000.

Daleth

  • Handlebar Stache
  • *****
  • Posts: 1201
Re: Healthcare self-insurance?
« Reply #62 on: September 03, 2014, 02:03:20 PM »
Remember, under the ACA you can no longer be denied for pre-existing conditions. And you can qualify to register for insurance for a wide variety of reasons, such as moving to a new state or even failing to pay a utility bill. Seems like even more reasons to self-insure. Basically, all you need for self-insurance is enough money to cover your care until you can manage to sign up for insurance.

No, that should say "until you are ALLOWED to sign up for insurance." You can't just sign up whenever you feel like it--unless you get married, get a new job or have some similar change, you can only sign up once a year, during the open enrollment period. What if you need an operation that costs $250,000 in April? What if it's May and you just found out you have cancer and need to start chemo immediately? What if you get pregnant in March, have a preemie in October and end up with a $1 million NICU bill? Ooops, you can't sign up for insurance until December. Too bad, so sad.

Daleth

  • Handlebar Stache
  • *****
  • Posts: 1201
Re: Healthcare self-insurance?
« Reply #63 on: September 03, 2014, 02:04:12 PM »
You can still buy plenty of non-ACA compliant plans.  They're not illegal, and won't be even under full implementation.

Please show me one example of a plan you found with a 50K deductible.

The point is, those plans are in effect illegal.

Find one, sign up for it and pay the ACA penalty. Your "problem" is now solved.

Beric01

  • Handlebar Stache
  • *****
  • Posts: 1156
  • Age: 30
  • Location: SF Bay Area
  • Law-abiding cyclist
Re: Healthcare self-insurance?
« Reply #64 on: September 03, 2014, 02:10:09 PM »
Find one, sign up for it and pay the ACA penalty. Your "problem" is now solved.

For me, the ACA penalty would be more than the cost of purchasing "minimum insurance". Paying the penalty really isn't an option.

KayakMom

  • 5 O'Clock Shadow
  • *
  • Posts: 34
  • Location: all over the place
Re: Healthcare self-insurance?
« Reply #65 on: September 03, 2014, 02:20:38 PM »
Anyone against "welfare" who defines it as government paying for things shouldn't drive on public roads, buy anything using money, use public education and libraries, drink tap water, call the police or fire department etc. The government is us. It's our money, paid via taxes, pooled for the public good.

So if the government passed a new law that they were going to take money out of my bank account to buy me a Prius because they had wisely decided that people are not smart enough to chose their own car- I would be wrong to drive it?   I know I could just drive my old car, but now I have a new Prius sitting in my driveway, that I have already paid for.  You're saying I couldn't be against that asinine law and still drive the Prius? I figure if they've already seized the money and spent it for me, it doesn't make any sense not to use it. 
I would argue that I CAN be against that law AND drive the Prius.
I do think the private sector could do many things better and more efficiency- but that's not the world we live in.  So I will continue to drive on public roads.



The bottom line is that without health, you don't have much. Some things are more important than money.
What most people in this country need to lose weight, eat better and exercise more.  Unfortunately, the forced medical insurance will do little for those problems.

Beric01

  • Handlebar Stache
  • *****
  • Posts: 1156
  • Age: 30
  • Location: SF Bay Area
  • Law-abiding cyclist
Re: Healthcare self-insurance?
« Reply #66 on: September 03, 2014, 02:25:43 PM »
Anyone against "welfare" who defines it as government paying for things shouldn't drive on public roads, buy anything using money, use public education and libraries, drink tap water, call the police or fire department etc. The government is us. It's our money, paid via taxes, pooled for the public good.

So if the government passed a new law that they were going to take money out of my bank account to buy me a Prius because they had wisely decided that people are not smart enough to chose their own car- I would be wrong to drive it?   I know I could just drive my old car, but now I have a new Prius sitting in my driveway, that I have already paid for.  You're saying I couldn't be against that asinine law and still drive the Prius? I figure if they've already seized the money and spent it for me, it doesn't make any sense not to use it. 
I would argue that I CAN be against that law AND drive the Prius.
I do think the private sector could do many things better and more efficiency- but that's not the world we live in.  So I will continue to drive on public roads.



The bottom line is that without health, you don't have much. Some things are more important than money.
What most people in this country need to lose weight, eat better and exercise more.  Unfortunately, the forced medical insurance will do little for those problems.

Well stated.

The "Affordable care act" should be called the "mandatory insurance act". The government decided that, for whatever reason, everyone should have insurance. So they made a law requiring it. Now they can check the box and say that more people have health insurance. Yay! Will that change most people's unhealthy lifestyles, which are a big reason why healthcare is so expensive in this country? Not a bit.

Penny Lane

  • Stubble
  • **
  • Posts: 203
Re: Healthcare self-insurance?
« Reply #67 on: September 09, 2014, 09:32:30 AM »
The ACA should be called the Available Care Act; it is not very affordable for many, even with the subsidies.  The reason has to do with the astronomical charges for care in this country, not mirrored any where else on earth.  There is no inherent reason for an MRI to "cost" $3000. here and $300 in places like Australia/Europe.  The "price" is this high because we have opted to have this insurance system instead of a single payer, so over time, we have been insulated from paying for services ourselves.  Every healthcare entity in this country has an automatic charge increase of 5-6% per annum; insurance companies cannot control these price increases as businesses as that would involve illegal collusion between companies.  Either the populace must rebel against these charges or the govt will need to step in and reduce them as we have gotten to the point where no one can afford this.  Of course you are right that we also have a bunch of unhealthy folk in our country with poor habits; every insurance company/ healthcare entity would love to know how to change those potentially preventable cases.  No one should be bankrupted by medical costs.

It's a great feature that we can keep our kids on our plans til 26 and that you are availing yourself of this!  One of my kids needed to and the other has a job with insurance benefits.  This could have been done a long time ago as removing pre-existing conditions long ago may have helped the market sort itself out before this current crisis.  But we rarely do things before crisis as a country, do we?

Spartana

  • Guest
Re: Healthcare self-insurance?
« Reply #68 on: September 09, 2014, 10:09:35 AM »
Realistically, we more than likely qualify for medicaid (or a heavy subsidy), but that feels awfully like "living on welfare" to me. Then again, it's not like we can exactly "opt-out" if the only way to purchase insurance is through the state exchange (which takes income into account, right?). Or am I just confused altogether.

Why does it feel like welfare?  How is this subsidy any different than the dozens of others you already willingly accept?  Would you forgo your mortgage interest deduction or your Earned Income Tax Credit (or some other tax credit)?  If not, why do you think there's a difference between any of them?  Just because this one is new, doesn't mean that there's a fundamental difference.  The government is encouraging it's citizens to purchase health insurance in the same way it encourages them to buy houses, save for college, or save for retirement.  It's in the best interest of the population as a whole.
I believe the OP may feel this way for the same reason I do because they are voluntarily wanting to quit their job and give up their health insurance and taking heavy subsidies or Medicaid feels like taking welfare in that case. I voluntarily quit my job at a young age to have "fun" and gave up my nice company health insurance plan and can now qualify for taxpayer funded Medicaid under the ACA because they do not look at assets, only taxable income, and mine is low. It feels the same as if I quit my job at a young age to have "fun" and collected welfare and food stamps on the working taxpayers dime. Working low or medium income workers should have the right to have some tax payer subsidies based on income, temporarily unemployed people or disabled and ill people who can not work should have the right to have Medicaid coverage. For me, who is able bodied and want to leave the work force early to spend the day playing volleyball on the beach, it feels like welfare to go on Medicaid or even use the VA hospital (which I feel less welfary about using) in my circumstance.

As for the OP's original issue - if I were in her shoes I would not go without health insurance for herself or her child/ren. Too risky by far. Find a low cost plan on the exchange and accept the subsidies, or if you are low income enough and live in a Medicaid expanded state you will be placed on that rather then given subsidies. If taking either is a problem ethically for you then you should probably stay at your job and keep your employer funded health insurance. I was retired for over 10 years before the ACA took effect, and I self-funded my own private catastrophic plan until then. It was dropped in Jan and I didn't qualify for subsidies, only Medicaid which I didn't want, so continued to fund a very expensive private plan. Now I have dropped that and plan to use the VA hospital for my health insurance coverage. Scary but better then the $14K/year I'd have to pay for medical care before my private health insurance even started to pay.
« Last Edit: September 09, 2014, 10:25:57 AM by Spartana »