Author Topic: Healthcare self-insurance?  (Read 24580 times)

APowers

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Healthcare self-insurance?
« on: September 02, 2014, 04:22:23 PM »
I'm currently in a job that I hate (well, I hate working with the boss; the job itself is fine); but I get good health insurance very cheaply though it.

I'm mulling over what the ramifications of quitting would be, but I'm not sure if I really want to go without health insurance. On the one hand, there was a 2-3 day stay in the hospital following the birth of kiddo #1, which was about a $10-12k hospital bill altogether (including doctor's fees, etc)-- that's not a bill we really could or should have floated on our own, and I'm super glad we had health insurance. On the other hand, we haven't really been to the doctor since the birth of kiddo #2 (2 years ago), except for once (which was a simple office visit and blood labwork). I personally haven't needed medical care in years, and don't expect to need much professional help in that area in the future.

Does anyone have any advice on what it's like to self-insure*

I want to think that, for a pretty healthy, non-hypochondriac family of four, we could set aside $300 per month into a dedicated "healthcare" fund and just pay cash for any random doctor/dentist/optician visits, etc. Is that unreasonable? Granted, it'd never be enough to cashflow a massive emergency medical bill, or a serious chronic medical condition; but we don't have either of those and don't really expect to...



*Yes, ACA blablabla, but I don't feel like I ought to count on subsidized health insurance to provide for much, so I'm just assuming that it's not in the picture.

Malaysia41

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Re: Healthcare self-insurance?
« Reply #1 on: September 02, 2014, 04:29:09 PM »
We just retired, and as such lost our company health insurance.  We just bought a super high deductible catastrophic plan from Cigna.  For $2000 a year, it covers me, my husband and our 8 yr old son.  Each person has a $10k deductible, and then Cigna covers 100% of healthcare costs up to $1M per person.  (and it covers us in the US when we travel there).

IDK if you can get similar coverage in US.  For me the rubber is hitting the road right now.  I think I may need shoulder surgery and toe surgery this year so that means I'm out $10k.  Still, it beats the full-bells-n-whistles COBRA coverage that would've been $2800 PER MONTH living overseas, and $4800 per month if we moved back to the US. 

I would say if you are willing to 'self insure' then going with the highest deductible catastrophic coverage plan is your best bet. You'll be within the law and you'll be covered for anything that could potentially bankrupt you.

Cassie

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Re: Healthcare self-insurance?
« Reply #2 on: September 02, 2014, 04:30:32 PM »
With kids it is a risk that I would not want to take.  I actually know 2 families where one of their kids developed a life threatening illness & even with insurance we had to do lots of fundraisers and still they will be paying for years.  Also I think you can no longer go medically bankrupt like you could in the past.  I think it is too big a risk.

Eric

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Re: Healthcare self-insurance?
« Reply #3 on: September 02, 2014, 04:50:03 PM »
Granted, it'd never be enough to cashflow a massive emergency medical bill, or a serious chronic medical condition; but we don't have either of those and don't really expect to...

And that's why you need health insurance.  One serious medical issue and it could will cost you hundreds of thousands of dollars.  So you're risking your entire financial future to save a few thousand dollars.  Bad idea.

Freedom2016

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Re: Healthcare self-insurance?
« Reply #4 on: September 02, 2014, 05:18:19 PM »
Granted, it'd never be enough to cashflow a massive emergency medical bill, or a serious chronic medical condition; but we don't have either of those and don't really expect to...

Oh dear.

I didn't expect to be diagnosed with breast cancer in my 30's. Family friends did not expect their healthy 10-year old to contract viral meningitis and viral encephalitis over the Labor Day weekend. Acquaintances didn't expect their 4-year daughter to get leukemia.

I think it is plain foolish to think "it couldn't happen to me" when it comes to your health. Past health is no indicator of future health!
 

justajane

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Re: Healthcare self-insurance?
« Reply #5 on: September 02, 2014, 05:35:55 PM »
Like others have already pointed out, nobody "expects" to have a chronic medical condition. I also might add that nobody expects to have an appendicitis or get in a car accident or fall down the stairs, but sometimes it happens. You seem to have a fair amount of hubris on matters entirely out of your control.

If you are willing to either wipe out your life's savings and/or declare bankruptcy because of one unforeseen medical emergency, then yes, I would self-insure. Otherwise, get a high-deductible plan on the open market. If you are as healthy as you seem to think you are, you will be able to afford it.

Beric01

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Re: Healthcare self-insurance?
« Reply #6 on: September 02, 2014, 05:51:11 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.

I actually don't mind the concept of buying insurance, but the problem is that the new "minimum insurance" gives you a $6K deductible and provides 3 free visits a year. I go to the doctor once a year, for preventative care, and that won't even count towards my free visits! This care would cost me an unsubsidized $2K/year. That is simply too much care. I want a $50K deductible! I can pull together 50K today in case of a medical emergency. My guess is that a 50K deductible would cost me less than $500/year, but the ACA made those plans illegal. So insurance is a bad deal for me, but of course I can't just not buy insurance without paying the Obamacare tax.

My current plan once reaching FIRE is just to move out of the country (see Go Curry Cracker's blog post on self-insuring while living abroad under Obamacare).

Quote
Effectively immediately, we are cancelling our old health insurance policy and replacing it with NOTHING.  Good-bye health insurance

Out-of pocket costs for countries like Malaysia are as little as 1/10 of that of the US, with equivalent quality of care, so I can just pay out of pocket for everything. They also have insurance, for much cheaper than here.
« Last Edit: September 02, 2014, 06:12:06 PM by Beric01 »

APowers

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Re: Healthcare self-insurance?
« Reply #7 on: September 02, 2014, 06:07:37 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.

APowers

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Re: Healthcare self-insurance?
« Reply #8 on: September 02, 2014, 06:12:27 PM »
As a side note, we're in a much better position now than we were 3 years ago, and have more than enough cash reserves to cough up a $10-12k medical bill if we had to.

Beric01

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Re: Healthcare self-insurance?
« Reply #9 on: September 02, 2014, 06:18:27 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.

Remember, insurance is a bad deal. Insurance companies wouldn't sell it if they didn't make money off of it selling it to you. If you're healthier than the norm (not unlikely for a Mustachian who bikes everywhere), insurance becomes an even worse deal, also if you're young, or you're male, or you're not needing maternity services (which are now mandated to be included).

The reason for having insurance is if there is a medical disaster (major injury, cancer diagnosis, etc.) that would wipe you out if you didn't have insurance. But remember, as Mustachians, we actually have substantial savings, meaning we have even less need for insurance. If you save the money you would have otherwise spent on insurance, you will, on average come out ahead (far ahead). And you have your 'stache if you really need it (during which time you can also rush to sign up for insurance).

The only thing I haven't figured out is how to get around the individual mandate, while still living in the US.
« Last Edit: September 02, 2014, 06:20:25 PM by Beric01 »

expatartist

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Re: Healthcare self-insurance?
« Reply #10 on: September 02, 2014, 06:25:03 PM »
The other challenge is: if you don't have insurance and have an emergency, even if you have the tens of thousands this would cost, your base medical bills will be higher - because hospitals give cheaper base rates to insured people. Insurance companies have negotiated these kinds of deals with hospitals.

For example, if you broke a leg and were uninsured, the bill could be $12K.
If you were insured, the total bill could be $10K, for which you have a 20% copay. So, you pay $2k, the insurance company pays $8K.

Beric01

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Re: Healthcare self-insurance?
« Reply #11 on: September 02, 2014, 06:33:47 PM »
The other challenge is: if you don't have insurance and have an emergency, even if you have the tens of thousands this would cost, your base medical bills will be higher - because hospitals give cheaper base rates to insured people. Insurance companies have negotiated these kinds of deals with hospitals.

For example, if you broke a leg and were uninsured, the bill could be $12K.
If you were insured, the total bill could be $10K, for which you have a 20% copay. So, you pay $2k, the insurance company pays $8K.

Actually, health costs are often cheaper when self-insuring. Here's an article on negotiating health costs. There other thing to remember is that using insurance can actually cost the health provider more than if you self-insure. Processing a cash payment is a whole lot easier than dealing with the administrative paperwork of an insurance provider. If you don't tell them you don't have health insurance, but that you'll "just be paying for this yourself", they may give you a discount.

EDIT: here's another article on the Freakonomics blog about paying less without health insurance.
« Last Edit: September 02, 2014, 06:44:27 PM by Beric01 »

beltim

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Re: Healthcare self-insurance?
« Reply #12 on: September 02, 2014, 06:37:23 PM »
My guess is that a 50K deductible would cost me less than $500/year, but the ACA made those plans illegal.

This is just straight up false.  Those plans don't count as health insurance under the ACA, but they're not illegal.  The reason you can't find them is that there's no market for them (there wasn't a market for them pre-ACA either, by the way, although you could get somewhat higher deductibles than you can now).

Beric01

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Re: Healthcare self-insurance?
« Reply #13 on: September 02, 2014, 06:41:59 PM »
My guess is that a 50K deductible would cost me less than $500/year, but the ACA made those plans illegal.

This is just straight up false.  Those plans don't count as health insurance under the ACA, but they're not illegal.  The reason you can't find them is that there's no market for them (there wasn't a market for them pre-ACA either, by the way, although you could get somewhat higher deductibles than you can now).

Those plans were effectively made illegal. You're required by law to buy "minimum insurance" now, and one of those plans does not qualify. "Minimum coverage" has more coverage than one of those plans in every way, killing the market for them. The ACA thus, in effect, made holding just one of those plans illegal.

I dug around the internet and found some old literature on these types of plans, so they were clearly being sold.

beltim

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Re: Healthcare self-insurance?
« Reply #14 on: September 02, 2014, 06:49:10 PM »
My guess is that a 50K deductible would cost me less than $500/year, but the ACA made those plans illegal.

This is just straight up false.  Those plans don't count as health insurance under the ACA, but they're not illegal.  The reason you can't find them is that there's no market for them (there wasn't a market for them pre-ACA either, by the way, although you could get somewhat higher deductibles than you can now).

Those plans were effectively made illegal. You're required by law to buy "minimum insurance" now, and one of those plans does not qualify. "Minimum coverage" has more coverage than one of those plans in every way, killing the market for them. The ACA thus, in effect, made holding just one of those plans illegal.

I dug around the internet and found some old literature on these types of plans, so they were clearly being sold.

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.

Beric01

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Re: Healthcare self-insurance?
« Reply #15 on: September 02, 2014, 07:16:47 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. The "minimum care" plan offers more services than them in every way (for a much higher price), and it's illegal to have anything less than minimum care.

Here's a forum thread talking about UHP (ultra high deductible) catastrophic plans back in 2007. They definitely did exist. I like the quote:

Quote
The clients were either very well-off, or very broke.

APowers

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Re: Healthcare self-insurance?
« Reply #16 on: September 02, 2014, 07:25:55 PM »
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.

Beric01

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Re: Healthcare self-insurance?
« Reply #17 on: September 02, 2014, 07:29:53 PM »
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.

I detest the idea of living on welfare as much as you. But at this point, we're already so far down the hole as a country. So why not just exploit the system to the max? Obamacare in effect outlawed the best plans for you. So get yourself a nice big subsidy and enjoy living off of the aching backs of others. Seriously.

Eric

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Re: Healthcare self-insurance?
« Reply #18 on: September 02, 2014, 07:32:44 PM »
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.

beltim

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Re: Healthcare self-insurance?
« Reply #19 on: September 02, 2014, 07:35:45 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. The "minimum care" plan offers more services than them in every way (for a much higher price), and it's illegal to have anything less than minimum care.

Here's a forum thread talking about UHP (ultra high deductible) catastrophic plans back in 2007. They definitely did exist. I like the quote:

Quote
The clients were either very well-off, or very broke.

No.  Maybe you don't know what illegal means?  It means it's against the law to purchase.  You can still buy non-ACA plans, and there's nothing wrong about having them.  Plenty of people still buy them quite legally for purposes such as short term insurance between jobs, or while you're living or traveling overseas. 

I was wrong about a plan with a 50k deductible.  Neat!  However, that plan that you're citing is from 2013!! and would still be offered if there were demand.

Gin1984

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Re: Healthcare self-insurance?
« Reply #20 on: September 02, 2014, 07:37:17 PM »
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.
It does appear cheaper to have everyone have insurance than to the the ER law in affect and allow hospitals to just charge off the debts.  One nice thing about certain states not accepting the Medicaid expansion is that we have our own social experiment with controls and everything. 

Beric01

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Re: Healthcare self-insurance?
« Reply #21 on: September 02, 2014, 07:38:05 PM »
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.

Good post, though I take issue with your last statement.

The government believes these things are the best interest of the population as a whole. In many cases (see housing crash) it actually wasn't in everyone's best interest.

neophyte

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Re: Healthcare self-insurance?
« Reply #22 on: September 02, 2014, 07:40:21 PM »
As a side note, we're in a much better position now than we were 3 years ago, and have more than enough cash reserves to cough up a $10-12k medical bill if we had to.

High deductible policies have deductibles as high as $12,000 and let you have a Health Savings Account where you can save pre-tax money to go toward future medical bills.  It's kind of like self insuring for the minor to medium stuff and having insurance to cover the shit really hitting the fan.

$10,000 is not a major, major medical bill. A few months ago I passed out at work and was taken to the ER. They were busy so I saw the triage nurse briefly, she made sure I was not actively dying, and they dumped me back in the waiting room for 3 or 4 hours.  After that much time passed, I started feeling better and could stand up without puking my guts out, so I signed myself out and left. Without even seeing a doctor or receiving treatment, that little fiasco cost me around $2000.  (I have a high deductible policy, so I paid)

My sister woke up with a bat on top of her bed two years ago.  Rabies shots? Close to $20k. Fortunately her insurance covered it.

You've got 2 kids.  Bets are good that sooner or later one of them will need stitches or have a broken bone. Fine, you could cover that. What about a car accident? Appendicitis? Dog bite? 

Beric01

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Re: Healthcare self-insurance?
« Reply #23 on: September 02, 2014, 07:43:36 PM »
No.  Maybe you don't know what illegal means?  It means it's against the law to purchase.  You can still buy non-ACA plans, and there's nothing wrong about having them.  Plenty of people still buy them quite legally for purposes such as short term insurance between jobs, or while you're living or traveling overseas. 

I was wrong about a plan with a 50k deductible.  Neat!  However, that plan that you're citing is from 2013!! and would still be offered if there were demand.

You seem to be completely ignoring my point. My point is, I would buy one of those plans (and it would be the only health plan I would buy) if it were legal under the ACA. But it doesn't qualify under minimum coverage anymore. In effect, it's illegal.

Of course there's no longer any demand! The government made a "minimum coverage" requirement, and that plan doesn't meet the requirement. Who would want to buy it?

This whole "illegal" semantics thing is silly. It's like the government banning all airports. In effect, they've made planes illegal. No one would want to buy one! But yes, they *didn't* directly ban planes. You're grasping for straws.

beltim

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Re: Healthcare self-insurance?
« Reply #24 on: September 02, 2014, 07:50:30 PM »
No.  Maybe you don't know what illegal means?  It means it's against the law to purchase.  You can still buy non-ACA plans, and there's nothing wrong about having them.  Plenty of people still buy them quite legally for purposes such as short term insurance between jobs, or while you're living or traveling overseas. 

I was wrong about a plan with a 50k deductible.  Neat!  However, that plan that you're citing is from 2013!! and would still be offered if there were demand.

You seem to be completely ignoring my point. My point is, I would buy one of those plans (and it would be the only health plan I would buy) if it were legal under the ACA. But it doesn't qualify under minimum coverage anymore. In effect, it's illegal.

Of course there's no longer any demand! The government made a "minimum coverage" requirement, and that plan doesn't meet the requirement. Who would want to buy it?

This whole "illegal" semantics thing is silly. It's like the government banning all airports. In effect, they've made planes illegal. No one would want to buy one! But yes, they *didn't* directly ban planes. You're grasping for straws.

No, you're going Through the Looking Glass on this one.  "Illegal" is a word with definite meaning.  It's quite legal to buy the kind of plan that you want.  Lots of people do (although usually with smaller deductibles, as I mentioned above). 

Your analogy is bad.  No one is stopping you from buying and using whatever health insurance plan you want.  All the government is saying is that if your plan doesn't meet minimum requirements, you're required to pay an extra fee.  A $95 fee does not makes something illegal!

Eric

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Re: Healthcare self-insurance?
« Reply #25 on: September 02, 2014, 07:51:24 PM »
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.

Good post, though I take issue with your last statement.

The government believes these things are the best interest of the population as a whole. In many cases (see housing crash) it actually wasn't in everyone's best interest.

I agree 100%.  But even if you think that the mortgage interest deduction is a terrible idea, the way to affect change regarding that or any policy is through the ballot box, not on your personal tax return.

Beric01

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Re: Healthcare self-insurance?
« Reply #26 on: September 02, 2014, 07:58:44 PM »
No, you're going Through the Looking Glass on this one.  "Illegal" is a word with definite meaning.  It's quite legal to buy the kind of plan that you want.  Lots of people do (although usually with smaller deductibles, as I mentioned above). 

Your analogy is bad.  No one is stopping you from buying and using whatever health insurance plan you want.  All the government is saying is that if your plan doesn't meet minimum requirements, you're required to pay an extra fee.  A $95 fee does not makes something illegal!

Or 2.5% of your income starting in 2016. Which, for some, is more than just buying minimum insurance.

This is again in effect outlawing the plan. It's like China's 1-child policy. The policy doesn't outright ban having more than one child. It just imposes incredible fees if you do have one, in effect banning the practice.

beltim

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Re: Healthcare self-insurance?
« Reply #27 on: September 02, 2014, 08:05:25 PM »
No, you're going Through the Looking Glass on this one.  "Illegal" is a word with definite meaning.  It's quite legal to buy the kind of plan that you want.  Lots of people do (although usually with smaller deductibles, as I mentioned above). 

Your analogy is bad.  No one is stopping you from buying and using whatever health insurance plan you want.  All the government is saying is that if your plan doesn't meet minimum requirements, you're required to pay an extra fee.  A $95 fee does not makes something illegal!

Or 2.5% of your income starting in 2016. Which, for some, is more than just buying minimum insurance.

This is again in effect outlawing the plan.

Yes on the 2.5%, and you're right that in some cases that the fee would be more than the insurance.  It still doesn't make it illegal.

Beric01

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Re: Healthcare self-insurance?
« Reply #28 on: September 02, 2014, 08:16:30 PM »
Yes on the 2.5%, and you're right that in some cases that the fee would be more than the insurance.  It still doesn't make it illegal.

Please enjoy your extremely strict definition of illegal and continue to ignore my entire point. This discussion isn't getting anywhere.


Right now I'm trying to figure out how the fee is issued, and if there's any way to avoid it (legally of course). I'm currently on my parent's plan (thanks Obamacare, this is really silly but I'll take the free money), so I have a couple years to figure this out. If I have to enroll in my company's plan once I turn 26, it will in effect cost me $3K/year towards my FIRE savings, so it's pretty critical I figure out how to avoid this.

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Re: Healthcare self-insurance?
« Reply #29 on: September 02, 2014, 08:17:31 PM »
I'm not somehow unilaterally opposed to subsidies or welfare or tax credits, but I do feel like I'd rather do things myself, if you know what I mean. I really hate having a choice between "wage-slave in a soul-crushing job" and "welfare recipient because I'm 'low-income'".

beltim

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Re: Healthcare self-insurance?
« Reply #30 on: September 02, 2014, 08:40:49 PM »
Yes on the 2.5%, and you're right that in some cases that the fee would be more than the insurance.  It still doesn't make it illegal.

Please enjoy your extremely strict definition of illegal and continue to ignore my entire point. This discussion isn't getting anywhere.


Right now I'm trying to figure out how the fee is issued, and if there's any way to avoid it (legally of course). I'm currently on my parent's plan (thanks Obamacare, this is really silly but I'll take the free money), so I have a couple years to figure this out. If I have to enroll in my company's plan once I turn 26, it will in effect cost me $3K/year towards my FIRE savings, so it's pretty critical I figure out how to avoid this.

I think you never acknowledged my point, so I agree the discussion isn't going anywhere.

As for the fee, I think it just happens on your tax return.  I've heard that you can play games with always owing taxes at the end of the year to avoid paying the fee but it seems like a loophole that can't last.

Gin1984

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Re: Healthcare self-insurance?
« Reply #31 on: September 02, 2014, 09:05:30 PM »
I'm not somehow unilaterally opposed to subsidies or welfare or tax credits, but I do feel like I'd rather do things myself, if you know what I mean. I really hate having a choice between "wage-slave in a soul-crushing job" and "welfare recipient because I'm 'low-income'".
First, you can refuse the subsidy at tax time, just like any other tax credit.  In fact you can send any extra amount of cash you want to the federal government.  I think that is foolish, but to each his own.  And, frankly, if you are within Medicaid eligibility, you are likely alreadying getting subsidized by others.  I know I am.  I got federal loans, I go to a state school, I certainly don't pay enough in taxes to cover my fair share.  How is this any different than those?

APowers

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Re: Healthcare self-insurance?
« Reply #32 on: September 02, 2014, 09:28:58 PM »
I'm not somehow unilaterally opposed to subsidies or welfare or tax credits, but I do feel like I'd rather do things myself, if you know what I mean. I really hate having a choice between "wage-slave in a soul-crushing job" and "welfare recipient because I'm 'low-income'".
First, you can refuse the subsidy at tax time, just like any other tax credit.  In fact you can send any extra amount of cash you want to the federal government.  I think that is foolish, but to each his own.  And, frankly, if you are within Medicaid eligibility, you are likely already getting subsidized by others.  I know I am.  I got federal loans, I go to a state school, I certainly don't pay enough in taxes to cover my fair share.  How is this any different than those?

I guess it's not, though I feel like it's a little different when I get a letter from the IRS (after I file my taxes) saying "Here is some other money you should have", than to specifically ask for money I don't think I should need.

Sdsailing

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Re: Healthcare self-insurance?
« Reply #33 on: September 02, 2014, 09:37:45 PM »

So you cant afford $600 per month for insurance but you can afford to "self insure?"  Is this a joke?

Beric01

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Re: Healthcare self-insurance?
« Reply #34 on: September 02, 2014, 09:41:27 PM »

So you cant afford $600 per month for insurance but you can afford to "self insure?"  Is this a joke?

I'm sorry, are we reading the same blog? $600/month is 1/3 of MMM's total monthly spending. So it's a big deal.

I'm aghast at what to do with the additional almost $200/month insurance will cost me. That's over 10% of my spending!

Sdsailing

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Re: Healthcare self-insurance?
« Reply #35 on: September 02, 2014, 10:04:22 PM »

So you cant afford $600 per month for insurance but you can afford to "self insure?"  Is this a joke?

I'm sorry, are we reading the same blog? $600/month is 1/3 of MMM's total monthly spending. So it's a big deal.

I'm aghast at what to do with the additional almost $200/month insurance will cost me. That's over 10% of my spending!

The blog author's finances have nothing to do with the OP's ability to self insure.

And anyone who thinks that a bunch of citizens running around without medical insurance becuase they think they are immortal is not a huge burden on the taxpayer is delusional.

This is EXACTLY why it is mandatory...to protect us from huge unfunded liabilities.

APowers

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Re: Healthcare self-insurance?
« Reply #36 on: September 02, 2014, 10:26:57 PM »

So you cant afford $600 per month for insurance but you can afford to "self insure?"  Is this a joke?

I use "afford" loosely. Yes, we can certainly cash flow $600/mo, but considering that our current level of expenses is $1,800/mo TOTAL (and $800 of that is going toward the mortgage), an additional $600 would be (proportionally) a ridiculously massive expense. Equivalent to three times our food budget, or more than double our utilities (water/sewer/garbage/power). No single line item or category in our budget is even remotely close to $600/mo. I mean, for that amount every month, I could be easily making mortgage payments on another house!


Sdsailing

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Re: Healthcare self-insurance?
« Reply #37 on: September 02, 2014, 10:45:14 PM »

So you cant afford $600 per month for insurance but you can afford to "self insure?"  Is this a joke?

I use "afford" loosely. Yes, we can certainly cash flow $600/mo, but considering that our current level of expenses is $1,800/mo TOTAL (and $800 of that is going toward the mortgage), an additional $600 would be (proportionally) a ridiculously massive expense. Equivalent to three times our food budget, or more than double our utilities (water/sewer/garbage/power). No single line item or category in our budget is even remotely close to $600/mo. I mean, for that amount every month, I could be easily making mortgage payments on another house!

So in fact you can afford it, but simply don't want to pay it. 

Why you think your personal budget has anything to do with the "reasonableness" of insurance costs is beyond me.  I wonder what the total premiums are for your work policy (including those payed by employer).

Still not clear on the self insurance part.  You must have millions in the bank.


Beric01

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Re: Healthcare self-insurance?
« Reply #38 on: September 02, 2014, 11:38:54 PM »
So in fact you can afford it, but simply don't want to pay it. 

Isn't that the name of the site? Why buy what you don't need? Excessive healthcare is a luxury, and will also delay FI. For sure we should try to work to reduce costs. What's the problem here?

Still not clear on the self insurance part.  You must have millions in the bank.

Or maybe, he recognizes that he's not going to have to pay "millions" up front, even in a medical disaster. He'll definitely have enough time to enroll in health insurance, not being denied for preexisting conditions, and get care. If the only thing you want is a very high deductible, why pay insurance month-to-month? Why not pay when you actually need the deductible?

Sdsailing

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Re: Healthcare self-insurance?
« Reply #39 on: September 02, 2014, 11:45:37 PM »


You do need it, that is the point. 

And it is mandated by law.

The reason there are minimum requirements for these plans is to prevent people from not getting sufficient insurance.

You are obviously not qualified to determine how much insurance you need based on your responses.  The idea that individuals without high net worth could actually self insure medical is absurd.

Catastrophic medical events can cost millions of dollars.  It seems that you are not aware of this.

Beric01

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Re: Healthcare self-insurance?
« Reply #40 on: September 02, 2014, 11:56:19 PM »


You do need it, that is the point. 

And it is mandated by law.

The reason there are minimum requirements for these plans is to prevent people from not getting sufficient insurance.

You are obviously not qualified to determine how much insurance you need based on your responses.  The idea that individuals without high net worth could actually self insure medical is absurd.

Catastrophic medical events can cost millions of dollars.  It seems that you are not aware of this.

Actually, you can just pay a fee if you don't enroll in insurance. For me, the fee would most likely be more than buying the minimum plan, but for the OP supporting a family, it could be cheaper to pay the fee due to larger insurance costs.

I am well aware medical expenses could cost insane amounts, though this event is unlikely. But that's my entire point. If you self-insure, then if something terrible really does come up, so can just enroll in an insurance plan. You cannot be denied for pre-existing conditions. And you can enroll in an insurance plan immediately for something as simple as not paying a utility bill or moving to a different state. Here's a [incomplete] list of qualifiers. Notice one is even "get divorced". So many of these are easy to fulfill! So you might pay for some immediate treatment out of pocket, but everything else will be paid for under your insurance, and won't touch your 'stache thereafter.

Sdsailing

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Re: Healthcare self-insurance?
« Reply #41 on: September 03, 2014, 12:18:49 AM »

So after the motorcycle accident you think you can enroll from the hospital?

Please look up the definition of self insurance.  It doesn't mean what you think it means.

APowers

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Re: Healthcare self-insurance?
« Reply #42 on: September 03, 2014, 12:36:43 AM »

So you cant afford $600 per month for insurance but you can afford to "self insure?"  Is this a joke?

I use "afford" loosely. Yes, we can certainly cash flow $600/mo, but considering that our current level of expenses is $1,800/mo TOTAL (and $800 of that is going toward the mortgage), an additional $600 would be (proportionally) a ridiculously massive expense. Equivalent to three times our food budget, or more than double our utilities (water/sewer/garbage/power). No single line item or category in our budget is even remotely close to $600/mo. I mean, for that amount every month, I could be easily making mortgage payments on another house!

So in fact you can afford it, but simply don't want to pay it. 

Why you think your personal budget has anything to do with the "reasonableness" of insurance costs is beyond me.  I wonder what the total premiums are for your work policy (including those payed by employer).

Still not clear on the self insurance part.  You must have millions in the bank.

I think that when health insurance is more expensive than shelter, it is exorbitant. That's why I don't want to pay it-- because it doesn't seem like anywhere near a good value.

Regarding the total premium for my current policy: if I take the company's word for how much it spends on me (I'm not sure I trust that number to not be inflated...) it's about $700/mo ($600 employer contribution + $100 employee contribution)-- which includes dental, vision, a contribution to an HSA, life insurance, and short term disability insurance, none of which would be included in the $600-750/mo health insurance. I think I'm justified in saying that $600/mo for a catastrophic-type medical-only health insurance plan is exorbitant.

Catastrophic medical events can cost millions of dollars.  It seems that you are not aware of this.

I think I am aware of this. If I wasn't, I wouldn't have a dilemma-- I'd just ditch the job that I hate and work somewhere happier with no health insurance in a heartbeat. But I'm trying to weigh risk vs. reward:

I could keep my job and my health insurance; or I could quit and be happier with no health insurance. Reward vs. risk.

I could quit and bet on the likelihood that we won't have a catastrophic medical event, and save $7,200/year (compounded until I retire). Risk vs. reward. Or I could quit and shell out $600+/mo to be covered in the event of a million dollar medical catastrophe. Risk vs. reward.

My dilemma is whether or not there is a decent middle ground that mitigates the risk acceptably while not throwing the reward away.

Also, I don't ride a motorcycle, fwiw.

Gin1984

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Re: Healthcare self-insurance?
« Reply #43 on: September 03, 2014, 04:09:25 AM »


You do need it, that is the point. 

And it is mandated by law.

The reason there are minimum requirements for these plans is to prevent people from not getting sufficient insurance.

You are obviously not qualified to determine how much insurance you need based on your responses.  The idea that individuals without high net worth could actually self insure medical is absurd.

Catastrophic medical events can cost millions of dollars.  It seems that you are not aware of this.

Actually, you can just pay a fee if you don't enroll in insurance. For me, the fee would most likely be more than buying the minimum plan, but for the OP supporting a family, it could be cheaper to pay the fee due to larger insurance costs.

I am well aware medical expenses could cost insane amounts, though this event is unlikely. But that's my entire point. If you self-insure, then if something terrible really does come up, so can just enroll in an insurance plan. You cannot be denied for pre-existing conditions. And you can enroll in an insurance plan immediately for something as simple as not paying a utility bill or moving to a different state. Here's a [incomplete] list of qualifiers. Notice one is even "get divorced". So many of these are easy to fulfill! So you might pay for some immediate treatment out of pocket, but everything else will be paid for under your insurance, and won't touch your 'stache thereafter.
Which is why there are open enrollment periods, and no a qualifying event is not miss a utility bill.  And within the time it take for any of the qualifying events to happen, you are still on the hook and that can cost thousands if not hundreds of thousands of dollars.

Mark31

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Re: Healthcare self-insurance?
« Reply #44 on: September 03, 2014, 04:52:17 AM »
I think the only sensible way to self-insure in the US is to use the money you save on not having health insurance to emigrate to the UK or Australia.

johnhenry

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Re: Healthcare self-insurance?
« Reply #45 on: September 03, 2014, 07:30:02 AM »
Quote from: Sdsailing
Catastrophic medical events can cost millions of dollars.  It seems that you are not aware of this.

Quote from: APowers
I think I am aware of this. If I wasn't, I wouldn't have a dilemma-- I'd just ditch the job that I hate and work somewhere happier with no health insurance in a heartbeat. But I'm trying to weigh risk vs. reward:

I could keep my job and my health insurance; or I could quit and be happier with no health insurance. Reward vs. risk.

I could quit and bet on the likelihood that we won't have a catastrophic medical event, and save $7,200/year (compounded until I retire). Risk vs. reward. Or I could quit and shell out $600+/mo to be covered in the event of a million dollar medical catastrophe. Risk vs. reward.

The folks on this thread who have been telling you that self-insuring is a bad idea are also considering risk vs. reward.  They just have a better grasp on statistics and reality than you.  If you are in a wreck that puts you $800K in debt and in the hospital for 4 months, you can't "just ditch the job and work somewhere happier".  You could lose your income at the same you rack up those expenses.

Quote from: APowers
My dilemma is whether or not there is a decent middle ground that mitigates the risk acceptably while not throwing the reward away.

This is a little bit funny.  Because you are completely writing off the "middle ground", which is buying a policy through the exchange and getting an ACA subsidy to mitigate the cost.  You write off this option just because you think it smells like "welfare"....although you admit you don't know for sure if it even takes income into account :) 

If your household income really is near the line between Medicaid and the highest subsidy pool of the ACA, that means that a household of your size can make about 4 times (400% FPL) what your household makes and still qualify for some subsidy through the ACA!  You can quadruple your household income and still be on welfare!!

Maybe it's time to rethink your definition of welfare.  Or take a course in statistics.  Or, if you insist, ask MMM why he isn't smart enough to self-insure like you!

justajane

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Re: Healthcare self-insurance?
« Reply #46 on: September 03, 2014, 07:32:37 AM »
I find your arguments rather dubious, but even if I grant that you could enroll after you find out you have cancer, you will not be able to enroll fast enough to take care of your appendicitis. Average cost of an appendicitis in this country? $30,000. I bring this example up because it is a relatively common problem. One in fifteen people end up having an appendicitis. I personally wouldn't like those odds, especially when you add up the other myriad of freak things that could happen to you. The flu could put you in the hospital, for god's sake!

I think you would be foolish and somewhat irresponsible to self-insure with children. $600 a month sucks, but it's a need as important as shelter or food.

MayDay

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Re: Healthcare self-insurance?
« Reply #47 on: September 03, 2014, 08:33:41 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. 

APowers

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Re: Healthcare self-insurance?
« Reply #48 on: September 03, 2014, 08:54:57 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?

gillstone

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Re: Healthcare self-insurance?
« Reply #49 on: September 03, 2014, 09:09:38 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.

 

Wow, a phone plan for fifteen bucks!