Author Topic: self insured- specifically health insurance  (Read 13997 times)

markbike528CBX

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self insured- specifically health insurance
« on: October 08, 2016, 10:02:58 PM »
I been thinking about self-insurance, health insurance, specifically.

the new thread
 http://forum.mrmoneymustache.com/welcome-to-the-forum/mmm-decides-to-self-insure-his-house/

Got me off my duff and started this thread.

QUESTION:  at what point can you call yourself insurance-free?

My call is $ 1M per person stache, as if you spend 1M on health issues, you probably might be done (dead) after spending that much.

The partners/spouse should be able to make it on the 1M remainder.

(puts on flame suit )
« Last Edit: October 08, 2016, 10:39:19 PM by markbike528CBX »

Another Reader

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Re: self insured- specifically health insurance
« Reply #1 on: October 08, 2016, 10:27:29 PM »
One of the major benefits of insurance is negotiated costs.   The emergency room visit with a nominal cost of $10,000 will be negotiated down to $2,000 by the insurance company.  If you have a 20 percent co-pay, your out of pocket is $400.  Without insurance, you will be billed for $10,000.  You might get that down somewhat if you have no money, but not to the insurance company's price.  Have money?  You will pay $10,000.

Syonyk

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Re: self insured- specifically health insurance
« Reply #2 on: October 08, 2016, 10:28:49 PM »
Eh, I'd prefer to always carry some form of catastrophic coverage insurance.

You probably could do it at $1M/person, but that'd kind of suck if you lived through it.  Unless you mean "$1M/person, independent of other funds."

That said, at least in the US, if you earn the right amount, your health insurance is mostly free.  To the best of my current understanding there's only an income check, not a wealth check, so subsidy away!  At least, that's my long term plan (given current situations).

iris lily

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Re: self insured- specifically health insurance
« Reply #3 on: October 08, 2016, 10:37:26 PM »
My friend was a pedestrian hit by a car. Her hospital bill was $240,000. She negotiated it down to $75,000.

This comes after an extensive cancer treatment and illness of several years. That had to be a pretty big bill.

She considers herself self insured. I guess she will ignore any bill frm the Internal Revenue Service for the penaltynfor not having  health insurance.

redturtle

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Re: self insured- specifically health insurance
« Reply #4 on: October 08, 2016, 10:44:59 PM »
What are you deductibles gonna be with this plan?

MVal

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Re: self insured- specifically health insurance
« Reply #5 on: October 08, 2016, 10:47:54 PM »
My friend was a pedestrian hit by a car. Her hospital bill was $240,000. She negotiated it down to $75,000.

This comes after an extensive cancer treatment and illness of several years. That had to be a pretty big bill.

She considers herself self insured. I guess she will ignore any bill frm the Internal Revenue Service for the penaltynfor not having  health insurance.

Yeah, how does that work? I thought someone told me the penalty is like, $600 if you don't have health insurance. And I think the marketplaces are different in different states...People on the coast seem to have an easier time getting policies but around where I am, it always seems super expensive for people who have to get Obamacare. I'm worried once I FIRE that health insurance will be a big issue.

markbike528CBX

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Re: self insured- specifically health insurance
« Reply #6 on: October 08, 2016, 11:00:00 PM »
One of the major benefits of insurance is negotiated costs.   .

I agree with Another Reader, on the negotiated costs, which is one big reason for me.

However, when does the "shared reponsibility" penalty and the lack of insurance become a "whatever" shrugg-off?

Metric Mouse

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Re: self insured- specifically health insurance
« Reply #7 on: October 09, 2016, 01:38:34 AM »
I been thinking about self-insurance, health insurance, specifically.

the new thread
 http://forum.mrmoneymustache.com/welcome-to-the-forum/mmm-decides-to-self-insure-his-house/

Got me off my duff and started this thread.

QUESTION:  at what point can you call yourself insurance-free?

My call is $ 1M per person stache, as if you spend 1M on health issues, you probably might be done (dead) after spending that much.

The partners/spouse should be able to make it on the 1M remainder.

(puts on flame suit )

I'm not sure this is comparable to the other thread. There is almost no upper bounds to what continued healthcare costs can run you, whereas home insurance and car collision insurance have a very definite loss limit.  In the United States there is also the ACA penalties to consider, which adds another layer to the equation.

I'm glad you've found a number that works for you though.  Hopefully everyone's health will remain so that there is no need for insurance, or the $1MM backstop!

justchristine

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Re: self insured- specifically health insurance
« Reply #8 on: October 09, 2016, 04:29:20 AM »
I personally wouldn't risk it but just for informational purposes, it's not hard to rack up million dollar medical bills.  I work for an insurance company that sells workers comp.  Just last week i stumbled across a claim that we had paid over a million for medical losses alone and the claim was still open and active.  From what I read the claimant was alive and well and had been for years since the claim opened.

jim555

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Re: self insured- specifically health insurance
« Reply #9 on: October 09, 2016, 11:09:11 AM »
It is far too risky to not have it.  Even a week in the hospital can be $100,000.  Who wants to take that risk?

monstermonster

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Re: self insured- specifically health insurance
« Reply #10 on: October 09, 2016, 11:19:28 AM »
My friend was a pedestrian hit by a car. Her hospital bill was $240,000. She negotiated it down to $75,000.

This comes after an extensive cancer treatment and illness of several years. That had to be a pretty big bill.

She considers herself self insured. I guess she will ignore any bill frm the Internal Revenue Service for the penaltynfor not having  health insurance.

Yeah, how does that work? I thought someone told me the penalty is like, $600 if you don't have health insurance. And I think the marketplaces are different in different states...People on the coast seem to have an easier time getting policies but around where I am, it always seems super expensive for people who have to get Obamacare. I'm worried once I FIRE that health insurance will be a big issue.
The annual fee for not having insurance in 2016 is $695 per adult and $347.50 per child (up to $2,085 for a family), or it's 2.5% of your household income above the tax return filing threshold for your filing status whichever is greater. So it's a lot more than $600 for most people. You're exempted if the lowest cost plan available to you is greater than 8.05% of your household income.

The subsidies and fines are based purely on your income, not your wealth, so if you're FIRE'd and only drawing a modest amount, you'll qualify for the ACA subsidy or medicaid depending on how little you're withdrawing annually. Essentially, because of the 8.05% affordability calculator, you need to just build in 8% extra each year into your FIRE number - that will more than cover you because if it's >8.05% of your income then you won't pay a fee.


Cpa Cat

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Re: self insured- specifically health insurance
« Reply #11 on: October 09, 2016, 11:48:17 AM »
I think it makes more sense to grab the cheapest possible ACA plan than it does to completely self-insure. If you don't qualify for subsidies, then the penalty for not having insurance is quite high, making it so that your cost of having that basic health insurance may not be substantial.

If you do qualify for the subsidy, I think you'd be hard pressed to find a situation where it makes sense to self-insure and take the penalty rather than take the subsidy on insurance.

Personally, I wouldn't want to come out on the other end of cancer or an injury with a $1,000,000 hospital bill and need to go back to work.

There are ways to mitigate that damage, of course - if you can make it to open enrollment, you can't be denied coverage. Or your spouse could get a job (if you're married) with insurance as soon as you became ill. But you're rolling the dice that the catastrophic event isn't sudden (like an accident). I also think that self-insuring probably increases the likelihood that you'll delay care, or be forced into treatment options that are cheaper, but don't have the best outcomes.

Seppia

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Re: self insured- specifically health insurance
« Reply #12 on: October 09, 2016, 02:35:07 PM »
It seems like a very stupid idea.
Some sort of catastrophic event coverage is needed when talking about health, as anything VERY bad would most certainly 1- wipe you out and 2- negatively affect your ability to bring home any income.

ysette9

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Re: self insured- specifically health insurance
« Reply #13 on: October 09, 2016, 08:47:10 PM »
I agree that this sounds like a penny wise, pound foolish sort of proposition. Get the least expensive, highest-deductible plan out there and invest the difference, but for god's sake, don't go without insurance. You may be young and healthy, but there is no guarantee you will stay that way. I am only in my 30s but I have seen friends 1) get brain cancer and die, 2) crash a motorcycle and get airlifted out of a canyon 3) get thyroid cancer and live to see another day, 4) in my own case had a very risky pregnancy after two late losses, give birth early, and have a baby in the NICU. Personally, I don't want to avoid cool things in life like surfing, backpacking, volunteering for Habitat for Humanity because I might injure myself and need to go to the hospital. I imagine that my behavior would change quite a bit if I knew I didn't have that safety net.

GetItRight

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Re: self insured- specifically health insurance
« Reply #14 on: October 09, 2016, 08:57:50 PM »
Unfortunately we have a big government regulated health insurance system which results in extortionate charges for minor services. Ask for pricing up front and you can be waiting months to get a quote and shop around. There are some free market hospitals like the Surgery Center of Oklahoma that advertise pricing which is fair and competitive, often cheaper than the rates insurance will negotiate. Yes you can negotiate the same rates insurance pays, but unless you have intimate knowledge of what an appropriate price is for every obscure procedure and service, you're shooting in the dark.

Your best bet is probably an obscenely expensive catastrophic coverage high deductible insurance plan. These used to be cheap before government regulated healthcare and insurance more than it was, but at least the government will steal less from you if you use a HSA. Honestly it's not uncommon to be out a few hundred thousand dollars for something you might think is minor. Having a known cap of what it will cost is helpful, even if it means your government regulated and controlled insurance company declines to pay for services that may save your life. In usch case you can always go the free market route either in the country or outside of the country. Regardless, as someone who has spent a fairly large amount on healthcare in the past year, it's prudent to have some sort of insurance for the big health events.

alsoknownasDean

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Re: self insured- specifically health insurance
« Reply #15 on: October 10, 2016, 01:20:44 AM »
If your health insurance is $5000 a year, you'd need $125K to cover that at a 4% SWR. To account for increases above inflation, I'll use a 2.5% SWR, so $200K. That's a fair whack less than $1M. Are you prepared to take the risk (and work longer to do so)?

Metric Mouse

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Re: self insured- specifically health insurance
« Reply #16 on: October 10, 2016, 01:25:08 AM »
If your health insurance is $5000 a year, you'd need $125K to cover that at a 4% SWR. To account for increases above inflation, I'll use a 2.5% SWR, so $200K. That's a fair whack less than $1M. Are you prepared to take the risk (and work longer to do so)?

I don't think the OP was suggesting this; just pointing out that a very wealthy person may choose to do so, if they had a 1mm stash per individual.

Pigeon

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Re: self insured- specifically health insurance
« Reply #17 on: October 10, 2016, 12:48:25 PM »
I'm a breast cancer survivor. Between all the testing, biopsies, 8 rounds of chemo, rads, a year of Herceptin, hormonal therapies and follow up, I'm sure it was over a million dollars. I was young for it and otherwise healthy. Self insuring sounds like a terrible plan. When something like this happens, I can't imagine having to try to negotiate with dozens of providers, many of whom will expect to be paid up front.

Abe

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Re: self insured- specifically health insurance
« Reply #18 on: October 10, 2016, 06:11:58 PM »
Another thing to keep in mind is disability after the hospitalization/illness may limit your ability to earn afterwards. This isn't specifically related to self insurance vs group, but having that money available afterwards would be beneficial.

spicykissa

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Re: self insured- specifically health insurance
« Reply #19 on: October 10, 2016, 08:19:08 PM »
I have had patients of mine die waiting to be listed (just listed, never mind actually getting one) for an organ transplant because they did not have insurance/good enough insurance to fully cover the necessary lifelong medications. Our transplant committee considers it irresponsible to give that patient an organ until they have all their ducks in a row, because their chances of 100% following the very expensive protocol while paying out of pocket is almost nil and there are plenty of people already on the list with perfect insurance. Just food for thought.

There are many other scenarios where not being insured could result in poorer or at least delayed medical care, which is terrible. 

ender

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Re: self insured- specifically health insurance
« Reply #20 on: October 10, 2016, 08:24:57 PM »
One of the major benefits of insurance is negotiated costs.   The emergency room visit with a nominal cost of $10,000 will be negotiated down to $2,000 by the insurance company.  If you have a 20 percent co-pay, your out of pocket is $400.  Without insurance, you will be billed for $10,000.  You might get that down somewhat if you have no money, but not to the insurance company's price.  Have money?  You will pay $10,000.

This is sort of misleading, since I think places bill "cash payments" differently too. I called about this for a voluntary procedure recently and it sounded like the "net" cost to me might be similar if I paid out of pocket entirely vs through insurance (though naturally insurance would be billed 3x and I'd only get charged the same, or some otherwise completely stupid convoluted thing).

calimom

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Re: self insured- specifically health insurance
« Reply #21 on: October 10, 2016, 08:33:23 PM »
Re "negotiating costs": what if one is too incapacitated - say for instance in a coma or serious chemo brain - to make deals with the health provider? Bills for MRI, CAT scans, lab work, drugs and multiple surgeries could pile up. This is where wishful thinking and reality don't always align.

While I fully understand that many think insurance is a needless gamble, there's no way I'd be without decent coverage on my house, rental properties, life, and health.

markbike528CBX

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Re: self insured- specifically health insurance
« Reply #22 on: October 10, 2016, 10:58:25 PM »
OP here,

At the very least, I'll have to revise the minimum stashe upward (2millon per person?)

If one can say
meh, pay the penalty and self insure,
one could also say
meh, pay the insurance.

MrsPete

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Re: self insured- specifically health insurance
« Reply #23 on: October 11, 2016, 08:29:21 AM »
I'm in the camp of "horrible choice".  Even if you have 1-2 million per family member, that could literally be wiped out after an encounter with a drunk driver or a stint with cancer -- and you can't avoid those awful things. 

On the other hand, paying out of pocket when you catch strep throat or your kids need vaccinations -- while maintaining a high-deductible catastrophic illness policy -- makes sense financially. 

v8rx7guy

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Re: self insured- specifically health insurance
« Reply #24 on: October 11, 2016, 09:43:09 AM »
Completely different than self-insuring a house...  damage to a house is a fixed maximum loss at the cost of the dwelling, health costs are almost infinite in comparison.  You should have health insurance.

Pigeon

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Re: self insured- specifically health insurance
« Reply #25 on: October 11, 2016, 10:04:07 AM »
Completely different than self-insuring a house...  damage to a house is a fixed maximum loss at the cost of the dwelling, health costs are almost infinite in comparison.  You should have health insurance.

Not to mention that the non-financial stakes are considerably different.

Reynold

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Re: self insured- specifically health insurance
« Reply #26 on: October 11, 2016, 11:52:41 AM »
If your health insurance is $5000 a year, you'd need $125K to cover that at a 4% SWR. To account for increases above inflation, I'll use a 2.5% SWR, so $200K. That's a fair whack less than $1M. Are you prepared to take the risk (and work longer to do so)?

$5000/year?  I wish, at our age in the early 50s we are looking at around $15,000/year, assuming no subsidies, which is likely given what we would like to have income-wise.  Add another $5000/year for the deductible for at least one of us, which is pretty likely given our medical history, and you are at roughly $20,000/year, close to MMM's total spending on everything. 

What worries us is the accelerating rate of premium increases for the ACA plans in most states, I think it averages 25% this year, and Tennessee, an otherwise popular retirement state approved between 40% and 62% for their remaining insurers.  It only takes a few years of that kind of rate increases before premiums have doubled, and we are looking at $30-40,000 per year just for medical insurance.  That is the main reason I am still working, we would like to see some kind of longer term stabilization of health care system costs so we can project expenses better, though fortunately I don't mind my job. 

MVal

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Re: self insured- specifically health insurance
« Reply #27 on: October 12, 2016, 07:40:18 AM »
My friend was a pedestrian hit by a car. Her hospital bill was $240,000. She negotiated it down to $75,000.

This comes after an extensive cancer treatment and illness of several years. That had to be a pretty big bill.

She considers herself self insured. I guess she will ignore any bill frm the Internal Revenue Service for the penaltynfor not having  health insurance.

Yeah, how does that work? I thought someone told me the penalty is like, $600 if you don't have health insurance. And I think the marketplaces are different in different states...People on the coast seem to have an easier time getting policies but around where I am, it always seems super expensive for people who have to get Obamacare. I'm worried once I FIRE that health insurance will be a big issue.
The annual fee for not having insurance in 2016 is $695 per adult and $347.50 per child (up to $2,085 for a family), or it's 2.5% of your household income above the tax return filing threshold for your filing status whichever is greater. So it's a lot more than $600 for most people. You're exempted if the lowest cost plan available to you is greater than 8.05% of your household income.

The subsidies and fines are based purely on your income, not your wealth, so if you're FIRE'd and only drawing a modest amount, you'll qualify for the ACA subsidy or medicaid depending on how little you're withdrawing annually. Essentially, because of the 8.05% affordability calculator, you need to just build in 8% extra each year into your FIRE number - that will more than cover you because if it's >8.05% of your income then you won't pay a fee.

Thank you, that really helps! By the way, off topic, but what do you think of your Xtracycle? Is it very heavy?

ooeei

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Re: self insured- specifically health insurance
« Reply #28 on: October 12, 2016, 09:08:07 AM »
My parents both got different forms of cancer, and both are still alive and well with minimal side effects.  I think combined the cost was well over a million for the two of them.  My aunt has had cancer on and off for the last 20 years, I'm sure she's well into the millions by now, and is still relatively young and has many years left to go. 

There is no upper limit on healthcare costs, that's why the ACA mandates that there are no lifetime limits to health insurance.  Sure, you can find that you PROBABLY won't have to pay more than a million dollars, but there are a non negligible number of people every day who do pay that much, some a whole lot more.

You also have the risk of your health issue happening during a down market.  If your investments are down 20% when you have the issue, you're in quite a bit of trouble.  With a normal withdrawal it doesn't matter too much as you're taking out 3-5% of your portfolio per  year.  If you have a health issue that requires you withdraw 50% of your portfolio, that 20% drop is going to reduce your remaining portfolio to 30% of its original instead of 50%.  Instead of having $1 million to live on you'll have $600,000, a 40% difference.
« Last Edit: October 12, 2016, 09:11:20 AM by ooeei »

JLee

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Re: self insured- specifically health insurance
« Reply #29 on: October 12, 2016, 09:12:31 AM »
I would not self-insure.

I had a CT scan a few months ago:



The negotiated rates are ridiculously low compared to the list price.

Enigma

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Re: self insured- specifically health insurance
« Reply #30 on: October 12, 2016, 09:23:44 AM »
Self insuring is great when you do not find yourself ever going to the doctors.  It is a terrible idea when you find out you need it and meet road blocks at trying to get it.

The epipen battle that came out was citing that the charge for an epipen was around $600 for two.  However, insurance companies buy them at a discount of $150.  There is an incredible markup without using the insurance companies which would rule this out for me.  I mean when I get older I would expect my need of health insurance rising.  Also the insurance company sets the price for the medical industry.  An industry that has no caps on costs for medicine, medical procedures, etc.

My aunt passed away 3 years ago from treatable cancer and since she didn't have insurance to do the operations.  The doctors were constantly pushing out the treatment dates until it was too late.  Everyone was trying to find some way that the costs.

Telling a doctor or surgeon that you are 'uninsured' I believe would have a negative connotation even if you are willing to pay out of pocket.

monstermonster

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Re: self insured- specifically health insurance
« Reply #31 on: October 12, 2016, 12:20:32 PM »
Thank you, that really helps! By the way, off topic, but what do you think of your Xtracycle? Is it very heavy?
I love it, I commuted 20+ miles a day on it for several years. It's not a "light" bike by any stretch- it's a cargo bike- but it's great for hauling things around town. If you're trying to win a road race, I wouldn't get an xtracycle. If you're trying to move some chairs, photography equipment, small children, a recording studio, 8 bags of groceries, then it's probably the lightest strong cargo bike on the market.

MVal

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Re: self insured- specifically health insurance
« Reply #32 on: October 12, 2016, 01:39:05 PM »
Thank you, that really helps! By the way, off topic, but what do you think of your Xtracycle? Is it very heavy?
I love it, I commuted 20+ miles a day on it for several years. It's not a "light" bike by any stretch- it's a cargo bike- but it's great for hauling things around town. If you're trying to win a road race, I wouldn't get an xtracycle. If you're trying to move some chairs, photography equipment, small children, a recording studio, 8 bags of groceries, then it's probably the lightest strong cargo bike on the market.

Sweet. Do you think it would work well as a commuter bike? I have been looking for a car alternative I could use to get to work (7 miles) on nice weather days. I like the idea of an electric bike that can carry things I would normally have in my car (lunches, gym clothes, etc.). Are you using the folding one or some other version?

monstermonster

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Re: self insured- specifically health insurance
« Reply #33 on: October 12, 2016, 01:44:09 PM »
Thank you, that really helps! By the way, off topic, but what do you think of your Xtracycle? Is it very heavy?
I love it, I commuted 20+ miles a day on it for several years. It's not a "light" bike by any stretch- it's a cargo bike- but it's great for hauling things around town. If you're trying to win a road race, I wouldn't get an xtracycle. If you're trying to move some chairs, photography equipment, small children, a recording studio, 8 bags of groceries, then it's probably the lightest strong cargo bike on the market.

Sweet. Do you think it would work well as a commuter bike? I have been looking for a car alternative I could use to get to work (7 miles) on nice weather days. I like the idea of an electric bike that can carry things I would normally have in my car (lunches, gym clothes, etc.). Are you using the folding one or some other version?
We're sufficiently derailing this thread ;) Sorry!

It depends on what kind of xtracycle you are looking at/how hilly your commute is. Mine is a trek frame from the 80's I converted with the xtracycle kit. Not electric, just regular burrito-powered. I would say if you're not carrying large objects or children regularly, the xtracycle is way overkill and a decent commuter bike with a good set of panniers will be lighter, faster, and much easier to park at home and work. I carry everything I need for a long day at the office + gym in regular panniers.

My SO has the folding xtracycle, which I would NOT describe as a "folding bike" - it's really just an "apartment sized cargo bike". It folds down to about regular-bike length + 1/2 foot of extra width. Absolutely an unnecessary luxury unless you 1) need a cargo bike over a regular bike (hauling construction equipment or chicken feed or kids or something) and 2) live somewhere small.

Slow&Steady

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Re: self insured- specifically health insurance
« Reply #34 on: October 12, 2016, 02:26:25 PM »
A couple weeks after my DH celebrated his 30th birthday he woke up to a numb arm.  He thought he must have slept on it funny.  It was still numb a couple days later so he went to a chiropractor, thinking he had a pinched nerve.  The chiropractor aligned him but told him that the issue he was having was not related to a pinched nerve, he recommended that my DH find an neurologist. 

A month and a spinal tap, MRI, several office visits, and blood test later my 30 year old healthy DH was dx'd with Multiple Sclerosis.  His family has no history of MS.  This was a couple years before ACA fully kicked in.  Luckily he was insured through my work or those bills would have completely ruined us.  If he didn't have insurance at the time of the dx'd than he would have fallen into the pre-existing illness and not have been able to get coverage, this is not an issue now because of the ACA. 

His drugs for MS, without insurance or rx assistance programs would cost $5-8k a month, with insurance and the rx assistance program we have paid anywhere between $0-$50/month for his medicine.  He has experienced several symptoms of MS.  His attitude started to get pretty negative, so they put him on antidepressants.  His sleep patterns were irregular, so he now has a C-PAP (which help him get off the antidepressants).  He gets an MRI every 2-3 years, blood tests every 6 months, and sees a neurologist every 6-12 months.  He is still working and active (no disabilities) and without insurance it would take less than 10 years for his medical treatment to reach $1M. 

MS is not fatal and it is said that people with MS can experience a normal lifespan.  Life expectancy for people with MS has increased over time. Some believe this is due to treatment breakthroughs, improved healthcare and life style changes.  This is important to your point that one would probably not make it through $1-2M in medical cost.  The average age to be dx'd with MS is 30, if my DH lives to the average life expectancy of 76 years old he will have lived with (and been treating) MS for 46 years.  If it takes approximately 10 years (without insurance) to reach $1M in medical care we would need to be prepared to pay $4.5M in medical care for him (without insurance).

Stay insured, you never know what might happen tomorrow.

ender

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Re: self insured- specifically health insurance
« Reply #35 on: October 12, 2016, 06:39:09 PM »
I would not self-insure.

I had a CT scan a few months ago:



The negotiated rates are ridiculously low compared to the list price.

For kicks, I'd call them and ask if you had a cash, non-insurance plan how much you could get it for - though are you on a HDHP? If not, that $100 might be some level of coinsurance too.

JLee

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Re: self insured- specifically health insurance
« Reply #36 on: October 12, 2016, 07:01:26 PM »
I would not self-insure.

I had a CT scan a few months ago:



The negotiated rates are ridiculously low compared to the list price.

For kicks, I'd call them and ask if you had a cash, non-insurance plan how much you could get it for - though are you on a HDHP? If not, that $100 might be some level of coinsurance too.

I do have a HDHP.

Enigma

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Re: self insured- specifically health insurance
« Reply #37 on: October 13, 2016, 07:35:32 AM »
The tax penalty is another deterrent to being self-insured.

In 2017 and beyond, the penalty goes up to $695 plus a cost-of-living adjustment, or 2.5 percent of your household income, whichever is greater.  Over time this could go up as a hidden tax and a push by congress for more individuals to be insured.  So many lower class and middle class Americans are getting hit hard with this and are seeing their tax-refunds severely diminished.

If your wages are low anyway (retired) then the healthcare could be completely subsidized by the government and tax payer.  If your wages are high during retired years then it will be a major blow due to the penalty.

Unlike property, you pay a penalty to go without paying insurance.

Proud Foot

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Re: self insured- specifically health insurance
« Reply #38 on: October 13, 2016, 09:16:26 AM »
You could go about being self-insured similar to how a company does.  My company has a self-insured plan and we pay the costs of all claims, but we also have reinsurance which will cover costs in the event we have significant costs relating to a single claim/event. Not sure how this would apply to an individual since the ACA has seemed to eliminate the catastrophic health plans.

Scandium

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Re: self insured- specifically health insurance
« Reply #39 on: October 13, 2016, 09:44:55 AM »
Yeah no thanks.
Saw the medical bills for a guy involved in an industrial accident, about three pages of charges. A month in the hospital and multiple surgeries (burns). Total $1.7 million+. And this was a fairly "normal" blue collar workplace, not some super high-risk occupation. I can't imagine coming out of that and suddenly having zero (or less) to your name!

Sdsailing

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Re: self insured- specifically health insurance
« Reply #40 on: October 13, 2016, 10:04:02 AM »

What is the benefit to doing this?

Where is the up side?


It would make sense perhaps to a stereotypical teenager who thinks they are invincible.

dycker1978

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Re: self insured- specifically health insurance
« Reply #41 on: October 13, 2016, 10:20:05 AM »
Every scenario that has been talked about, refers to a single incident.  What happens if you get hit by a car, and the cost of that is say $750,000.  Then 2 years later you are diagnosed with cancer. Cost TBD.  I would bet that in two years you have not has the chance to replace the 750 K.   

ooeei

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Re: self insured- specifically health insurance
« Reply #42 on: October 13, 2016, 12:24:59 PM »
I would not self-insure.

I had a CT scan a few months ago:



The negotiated rates are ridiculously low compared to the list price.

For kicks, I'd call them and ask if you had a cash, non-insurance plan how much you could get it for - though are you on a HDHP? If not, that $100 might be some level of coinsurance too.

This is a good point.  I've found that generally you can negotiate rates if you don't have insurance.  Granted, it's a pain in the ass, and depends on the doctor.  You're also limited in how much you can negotiate on services already performed, so it doesn't help much with emergency services.  That giant starting number is a smoke and mirrors game that every hospital and doctor seems to play, and I suppose there are some people who do pay it. 

I seem to remember an article talking about this, and how so many hospitals have such high "donation" numbers to local areas due to this system.  If they give 1000 residents flu shots, and technically their charge is $500 per shot, they can tell the tax man and the newspaper they donated $500,000 worth of services to the community.  Of course, when they actually give flu shots to paying customers, virtually nobody pays $500 for it and it's likely closer to $20 ($20,000 doesn't sound quite as nice).  This may be part of getting classified as a non profit as well, but I don't remember.

v8rx7guy

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Re: self insured- specifically health insurance
« Reply #43 on: October 13, 2016, 12:28:28 PM »

What is the benefit to doing this?

Where is the up side?


It would make sense perhaps to a stereotypical teenager who thinks they are invincible.

The upside is thousands of dollars a year which would normally be paid as insurance premiums to be invested rather than paying them to the insurance company.

Sdsailing

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Re: self insured- specifically health insurance
« Reply #44 on: October 13, 2016, 04:21:21 PM »

What is the benefit to doing this?

Where is the up side?


It would make sense perhaps to a stereotypical teenager who thinks they are invincible.

The upside is thousands of dollars a year which would normally be paid as insurance premiums to be invested rather than paying them to the insurance company.

You're saving thousands in the short term. In the longer term you have the possibility of losing tens, hundreds, of thousands or more.  As more years go by, the probability of this happening increases.

An extreme case of 'Penny wise, pound foolish'.


v8rx7guy

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Re: self insured- specifically health insurance
« Reply #45 on: October 13, 2016, 04:25:15 PM »

What is the benefit to doing this?

Where is the up side?


It would make sense perhaps to a stereotypical teenager who thinks they are invincible.

The upside is thousands of dollars a year which would normally be paid as insurance premiums to be invested rather than paying them to the insurance company.

You're saving thousands in the short term. In the longer term you have the possibility of losing tens, hundreds, of thousands or more.  As more years go by, the probability of this happening increases.

An extreme case of 'Penny wise, pound foolish'.

I'm not defending it... you asked what the upside was, I stated the upside.  I agree, not worth the risk.

Shor

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Re: self insured- specifically health insurance
« Reply #46 on: October 13, 2016, 05:00:05 PM »
What if we had a euthanasia bracelet if the cost gets above X?
We as a society really need to come to terms with dying..

Metric Mouse

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Re: self insured- specifically health insurance
« Reply #47 on: October 13, 2016, 11:56:42 PM »
What if we had a euthanasia bracelet if the cost gets above X?
We as a society really need to come to terms with dying..

I think that would be the old system: "Can't pay your medical bills? Ok, you're dead."  Only everyone saved money by not buying bracelets.

former player

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Re: self insured- specifically health insurance
« Reply #48 on: October 14, 2016, 05:01:04 AM »
What if we had a euthanasia bracelet if the cost gets above X?
We as a society really need to come to terms with dying..

I think that would be the old system: "Can't pay your medical bills? Ok, you're dead."  Only everyone saved money by not buying bracelets.
There are two examples of that in this thread already: no life-saving organ transplants if you are not insured for the anti-rejection meds, and no operation for a treatable cancer if you are not insured for the operation.

To someone from the UK, they are horrifying examples.  Our system is a long way from perfect, but it has better and fairer outcomes than that.

Metric Mouse

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Re: self insured- specifically health insurance
« Reply #49 on: October 14, 2016, 02:19:27 PM »
What if we had a euthanasia bracelet if the cost gets above X?
We as a society really need to come to terms with dying..

I think that would be the old system: "Can't pay your medical bills? Ok, you're dead."  Only everyone saved money by not buying bracelets.
There are two examples of that in this thread already: no life-saving organ transplants if you are not insured for the anti-rejection meds, and no operation for a treatable cancer if you are not insured for the operation.

To someone from the UK, they are horrifying examples.  Our system is a long way from perfect, but it has better and fairer outcomes than that.

Well, to be fair, there does have to be some system for organ transplants. Until we can print enough of them for everyone, someone is going to not get the organ they need from the very finite supply available.