Considering self-insuring

[Monerexia]

50 years old, good health. Insurance is ~$5K/year w/$6700 deductible. That's $75K just in premiums until Medicare kicks in at 65. Have access to enough cash (~$100K) that I could plunk a chunk down on any serious illness and then just pay the hospital over time. What are the arguments against just self-insuring.

[Michael in ABQ]

50 years old, good health. Insurance is ~$5K/year w/$6700 deductible. That's $75K just in premiums until Medicare kicks in at 65. Have access to enough cash (~$100K) that I could plunk a chunk down on any serious illness and then just pay the hospital over time. What are the arguments against just self-insuring.

Cancer diagnosis or some other serious chronic illness or major surgery could cost hundreds of thousands of dollars - possibly more.

If you have $100k in cash that could almost throw off enough income in a low-risk investment to cover your annual premiums.

[Monerexia]

50 years old, good health. Insurance is ~$5K/year w/$6700 deductible. That's $75K just in premiums until Medicare kicks in at 65. Have access to enough cash (~$100K) that I could plunk a chunk down on any serious illness and then just pay the hospital over time. What are the arguments against just self-insuring.

Cancer diagnosis or some other serious chronic illness or major surgery could cost hundreds of thousands of dollars - possibly more.

If you have $100k in cash that could almost throw off enough income in a low-risk investment to cover your annual premiums.

Yes for sure. That money is already at work. Even with a major operation can't you put some down and pay the hospital over time? This whole thing is probably a bad idea but it is tempting haha

[Sibley]

There have been a number of posts about this. In short, and to be blunt, you don't have ANYWHERE near enough money. You want to self-insure? You need to have a few million, minimum. $100k is nothing. And it doesn't matter how healthy you are. All you need is a drunk driver to smash into you and you're screwed.

No, it's not a bad idea. It's an incredibly stupid and unrealistic idea. Unless and until the US radically changes the health care model, health insurance is a necessity.

[Monerexia]

There have been a number of posts about this. In short, and to be blunt, you don't have ANYWHERE near enough money. You want to self-insure? You need to have a few million, minimum. $100k is nothing. And it doesn't matter how healthy you are. All you need is a drunk driver to smash into you and you're screwed.

No, it's not a bad idea. It's an incredibly stupid and unrealistic idea. Unless and until the US radically changes the health care model, health insurance is a necessity.

Thank you for this face punch. You are right, of course. Back to our regularly scheduled programming.

[SailingOnASmallSailboat]

There have been a number of posts about this. In short, and to be blunt, you don't have ANYWHERE near enough money. You want to self-insure? You need to have a few million, minimum. $100k is nothing. And it doesn't matter how healthy you are. All you need is a drunk driver to smash into you and you're screwed.

No, it's not a bad idea. It's an incredibly stupid and unrealistic idea. Unless and until the US radically changes the health care model, health insurance is a necessity.

All of this. 100%.

[MilesTeg]

50 years old, good health. Insurance is ~$5K/year w/$6700 deductible. That's $75K just in premiums until Medicare kicks in at 65. Have access to enough cash (~$100K) that I could plunk a chunk down on any serious illness and then just pay the hospital over time. What are the arguments against just self-insuring.

If you have less than $1 million is expendable cash, its s bad idea. Good health can disappear in an instant, and health care ain't cheap.

Out of pocket layers also pay more than insurance companies do, because insurance companies have negotiating power.

[Viking Thor]

There are numerous medications that cost more than $100k/ year. Totally healthy if you take the medication and very bad if you dont.

I know someone that takes one, insurance pays.

Plus a severe accident or health episode can easily generate $100k in medical bills in a week.

[Monerexia]

There are numerous medications that cost more than $100k/ year. Totally healthy if you take the medication and very bad if you dont.

I know someone that takes one, insurance pays.

Plus a severe accident or health episode can easily generate $100k in medical bills in a week.

That's right the ongoing med deal--forgot about that! Yes my inspiration was take that 75K over 15 years and invest it and if anything happens there are very few procedures that if one puts down 50K or something on that you can't work out a payment plan with the hospital for a few hundred/month--but yes the ongoing med deal is a def problem--however, pharm companies do have all kinds of waivers for the uninsured.

[Monerexia]

50 years old, good health. Insurance is ~$5K/year w/$6700 deductible. That's $75K just in premiums until Medicare kicks in at 65. Have access to enough cash (~$100K) that I could plunk a chunk down on any serious illness and then just pay the hospital over time. What are the arguments against just self-insuring.

If you have less than $1 million is expendable cash, its s bad idea. Good health can disappear in an instant, and health care ain't cheap.

Out of pocket layers also pay more than insurance companies do, because insurance companies have negotiating power.

Yes should just keep it in the budget. Thanks.

[Michael in ABQ]

There are numerous medications that cost more than $100k/ year. Totally healthy if you take the medication and very bad if you dont.

I know someone that takes one, insurance pays.

Plus a severe accident or health episode can easily generate $100k in medical bills in a week.

That's right the ongoing med deal--forgot about that! Yes my inspiration was take that 75K over 15 years and invest it and if anything happens there are very few procedures that if one puts down 50K or something on that you can't work out a payment plan with the hospital for a few hundred/month--but yes the ongoing med deal is a def problem--however, pharm companies do have all kinds of waivers for the uninsured.

My dad has annual medical treatments that cost over $100k - been going on for 15+ years. If he gets that monthly treatment he's basically ok. If he went without he'd be crippled in a year or two probably. But because of health insurance my parents out of pocket costs are in the thousands per year for that.

[Monerexia]

There are numerous medications that cost more than $100k/ year. Totally healthy if you take the medication and very bad if you dont.

I know someone that takes one, insurance pays.

Plus a severe accident or health episode can easily generate $100k in medical bills in a week.

That's right the ongoing med deal--forgot about that! Yes my inspiration was take that 75K over 15 years and invest it and if anything happens there are very few procedures that if one puts down 50K or something on that you can't work out a payment plan with the hospital for a few hundred/month--but yes the ongoing med deal is a def problem--however, pharm companies do have all kinds of waivers for the uninsured.

My dad has annual medical treatments that cost over $100k - been going on for 15+ years. If he gets that monthly treatment he's basically ok. If he went without he'd be crippled in a year or two probably. But because of health insurance my parents out of pocket costs are in the thousands per year for that.

Yes I remember asking my dad when I was just a kid, "Dad, what did people do before dentists?" And he thought for a minute and answered, "They f*&king hurt, son." I can imagine asking him the same sentence about insurance..."They f*&king died, son..."

[MayDay]

I think you already get it. But just in case my seemingly healthy H had a weird EKG at a physical and he next thing we knew had a triple bypass to the tune of 600k. He couldn't wait. I mean I guess we could have slowly paid it off in installments but somehow I doubt the hospital would have been thrilled with 100$ a month and no interest on that bill.

[BikeFanatic]

I know most insurance only pay 60 k or less for a CABG bypass in my facility, if very complicated maybe 100 to 150 K, so 600k is the hospital price fo r uninsured?
I know all hospitals jack up the price for self pay, saying the insurance company negotiated price is 50 percent off.

[Michael in ABQ]

I know most insurance only pay 60 k or less for a CABG bypass in my facility, if very complicated maybe 100 to 150 K, so 600k is the hospital price fo r uninsured?
I know all hospitals jack up the price for self pay, saying the insurance company negotiated price is 50 percent off.

I'd love to see the breakdown of that bill. Is each surgeon billing at $10,000 an hour? Even if it's a 10-hour surgery with 20-30 people involved I can't see how $600k would be remotely justified. Supplies are a certain amount, maybe in the tens of thousands with the huge markups in the medical field. Overhead for the operating theater should not be a huge amount, you can build one for well under a million dollars so amortized over the thousands of surgeries it will be used for that should be a few thousand dollars at most.

[Sibley]

I know most insurance only pay 60 k or less for a CABG bypass in my facility, if very complicated maybe 100 to 150 K, so 600k is the hospital price fo r uninsured?
I know all hospitals jack up the price for self pay, saying the insurance company negotiated price is 50 percent off.

I'd love to see the breakdown of that bill. Is each surgeon billing at $10,000 an hour? Even if it's a 10-hour surgery with 20-30 people involved I can't see how $600k would be remotely justified. Supplies are a certain amount, maybe in the tens of thousands with the huge markups in the medical field. Overhead for the operating theater should not be a huge amount, you can build one for well under a million dollars so amortized over the thousands of surgeries it will be used for that should be a few thousand dollars at most.

Eh, if there were complications, ICU, extended stay in hospital, PT, etc getting throw into the number, I can see it. Particularly if in one of the more expensive parts of the country.

[Fishindude]

If it makes you any happier, your insurance cost is about 1/3 what my spouse and I pay for similar.

[MayDay]

I know most insurance only pay 60 k or less for a CABG bypass in my facility, if very complicated maybe 100 to 150 K, so 600k is the hospital price fo r uninsured?
I know all hospitals jack up the price for self pay, saying the insurance company negotiated price is 50 percent off.

I'd love to see the breakdown of that bill. Is each surgeon billing at $10,000 an hour? Even if it's a 10-hour surgery with 20-30 people involved I can't see how $600k would be remotely justified. Supplies are a certain amount, maybe in the tens of thousands with the huge markups in the medical field. Overhead for the operating theater should not be a huge amount, you can build one for well under a million dollars so amortized over the thousands of surgeries it will be used for that should be a few thousand dollars at most.

Eh, if there were complications, ICU, extended stay in hospital, PT, etc getting throw into the number, I can see it. Particularly if in one of the more expensive parts of the country.

Insurance paid less than that, bit that is the initial total of all the various bills (mix of inpatient, various surgeons and doctors, cardiac rehab, all the imaging and testing beforehand, the Cath beforehand, etc). I think insurance negotiated it down to less than half, some bills were more like 10% of the original ask.

I can't say if it was a particularly difficult situation compared to your average bypass, it certainly seemed both horrible and to go relatively smoothly from our perspective. Hope we never have to do it again, that's for sure!

That is one thing I see thrown out all the time- call and negotiate your hospital bill if you don't have insurance or if you are paying cash. We have tried that before and at best get a 5% discount. Some of his bills from bypass insurance negotiated 90% off. As an individual you can't possibly get as good of a negotiation!

[Rosy]

My DIL's medications alone are $6K - for one single month!

A good friend has insurance - yet - every year she hits the annual limit of what the insurance co-pays for medications.....
..... two months before the year is over.
She literally saves enough pills each month so she can make it through the last two months of the year.

Never mind doctor visits or other treatments or hospitals or rehab or even paying for hundreds for paramedic transportation.

Sad but true - your 100K is far from buying you protection from financial ruin in the good ole USofA.

[BikeFanatic]

re the 600k bill, I forgot to add in the catherization that is another 10 to 20 k, I think Medicare would then pay 60k for the surgery. I highly recommend insurance as others said you can not negotiate a 50 percent discount for self pay. Then there is post discharge care like cardiac rehab.

I am glad your spouse had the surgery and is doing well. Count your lucky stars.

My spouse and I are so close to Fire and are worried about insurance also. I know in my state there is always Medicaid for back up catastrophe and self pay for the office visits and labs and such, I am also looking into Cobra and the ACA.

[iris lily]

re the 600k bill, I forgot to add in the catherization that is another 10 to 20 k, I think Medicare would then pay 60k for the surgery. I highly recommend insurance as others said you can not negotiate a 50 percent discount for self pay. Then there is post discharge care like cardiac rehab.

I am glad your spouse had the surgery and is doing well. Count your lucky stars.

My spouse and I are so close to Fire and are worried about insurance also. I know in my state there is always Medicaid for back up catastrophe and self pay for the office visits and labs and such, I am also looking into Cobra and the ACA.

Actually, you can negotiate cash payment for self-pay. I have a pretty close friend who has had major health issues over the past 10 years. She is a unique flower, she would be the first to admit it. But for political and personal reasons, she does not have health insurance. She has significant family money, however, I’m not sure how much of that goes to pay her health bills. I think not a lot actually.

Anyway – she’s had ongoing cancer treatments. Then she was hit by a car as a pedestrian and that was at $350,000+ in  hospital bills and I don’t know how how much in  attendant physician care. Following rapidly she had appendicitis, gallbladder, dental surgeries.  The driver of the car that hit her had minimal liability insurance, I’m thinking it was $75,000? So that was a drop in the bucket.

She said she negotiates these bills down to 1/3 of what they were. She’s a pretty savvy business person, having owned her own company. So this is her style – rack up the health care bills, negotiate them down, pay them.

She lives very very simply. When she came home from the hospital incapacitated from her automobile run in, a social worker came to visit her and talked about getting on Medicaid. My friend nodded and smiled But ultimately ignored her,Understanding the social worker would have no frame of reference for her situation. The social worker would have “seen “a senior citizen woman living in a small, old, worn one bedroom apartments in a middle class/blue collar neighborhood,having no idea of the family estate that’s behind this.

Tl;dr Yes one can in modern America pay one’s significant healthcare bills. But the OP neither has The sophistication nor the resources to do that.

[wenchsenior]

50 years old, good health. Insurance is ~$5K/year w/$6700 deductible. That's $75K just in premiums until Medicare kicks in at 65. Have access to enough cash (~$100K) that I could plunk a chunk down on any serious illness and then just pay the hospital over time. What are the arguments against just self-insuring.

In the past few years, I've had several friends out of the blue have been diagnosed with either chronic rare disease or sudden unexpected medical incidents that would have run up bills in the MILLION dollar or more range within a few months, had they not had insurance.  Even WITH insurance, one of my friends had bills in the 100K range during the two years.  But even standard run of the mill car accident can potentially set you back hundreds of thousands.

To be blunt, your idea is insane. At any time, but especially at your age.

[Michael in ABQ]

I know most insurance only pay 60 k or less for a CABG bypass in my facility, if very complicated maybe 100 to 150 K, so 600k is the hospital price fo r uninsured?
I know all hospitals jack up the price for self pay, saying the insurance company negotiated price is 50 percent off.

I'd love to see the breakdown of that bill. Is each surgeon billing at $10,000 an hour? Even if it's a 10-hour surgery with 20-30 people involved I can't see how $600k would be remotely justified. Supplies are a certain amount, maybe in the tens of thousands with the huge markups in the medical field. Overhead for the operating theater should not be a huge amount, you can build one for well under a million dollars so amortized over the thousands of surgeries it will be used for that should be a few thousand dollars at most.

Eh, if there were complications, ICU, extended stay in hospital, PT, etc getting throw into the number, I can see it. Particularly if in one of the more expensive parts of the country.

Insurance paid less than that, bit that is the initial total of all the various bills (mix of inpatient, various surgeons and doctors, cardiac rehab, all the imaging and testing beforehand, the Cath beforehand, etc). I think insurance negotiated it down to less than half, some bills were more like 10% of the original ask.

I can't say if it was a particularly difficult situation compared to your average bypass, it certainly seemed both horrible and to go relatively smoothly from our perspective. Hope we never have to do it again, that's for sure!

That is one thing I see thrown out all the time- call and negotiate your hospital bill if you don't have insurance or if you are paying cash. We have tried that before and at best get a 5% discount. Some of his bills from bypass insurance negotiated 90% off. As an individual you can't possibly get as good of a negotiation!

That makes more sense. $600K for just the surgery by itself just sounded astronomical.

I think our largest medical bill was the birth of one of our children plus the normal day or two in the hospital afterwards. Face value of the bill was $12k, insurance paid $3.5k and we paid less than $100 out of pocket.

[Monerexia]

re the 600k bill, I forgot to add in the catherization that is another 10 to 20 k, I think Medicare would then pay 60k for the surgery. I highly recommend insurance as others said you can not negotiate a 50 percent discount for self pay. Then there is post discharge care like cardiac rehab.

I am glad your spouse had the surgery and is doing well. Count your lucky stars.

My spouse and I are so close to Fire and are worried about insurance also. I know in my state there is always Medicaid for back up catastrophe and self pay for the office visits and labs and such, I am also looking into Cobra and the ACA.

Actually, you can negotiate cash payment for self-pay. I have a pretty close friend who has had major health issues over the past 10 years. She is a unique flower, she would be the first to admit it. But for political and personal reasons, she does not have health insurance. She has significant family money, however, I’m not sure how much of that goes to pay her health bills. I think not a lot actually.

Anyway – she’s had ongoing cancer treatments. Then she was hit by a car as a pedestrian and that was at $350,000+ in  hospital bills and I don’t know how how much in  attendant physician care. Following rapidly she had appendicitis, gallbladder, dental surgeries.  The driver of the car that hit her had minimal liability insurance, I’m thinking it was $75,000? So that was a drop in the bucket.

She said she negotiates these bills down to 1/3 of what they were. She’s a pretty savvy business person, having owned her own company. So this is her style – rack up the health care bills, negotiate them down, pay them.

She lives very very simply. When she came home from the hospital incapacitated from her automobile run in, a social worker came to visit her and talked about getting on Medicaid. My friend nodded and smiled But ultimately ignored her,Understanding the social worker would have no frame of reference for her situation. The social worker would have “seen “a senior citizen woman living in a small, old, worn one bedroom apartments in a middle class/blue collar neighborhood,having no idea of the family estate that’s behind this.

Tl;dr Yes one can in modern America pay one’s significant healthcare bills. But the OP neither has The sophistication nor the resources to do that.

Dammit. I need to get me some of that *sophistication. Haha

[Sibley]

My DIL's medications alone are $6K - for one single month!

A good friend has insurance - yet - every year she hits the annual limit of what the insurance co-pays for medications.....
..... two months before the year is over.
She literally saves enough pills each month so she can make it through the last two months of the year.

Never mind doctor visits or other treatments or hospitals or rehab or even paying for hundreds for paramedic transportation.

Sad but true - your 100K is far from buying you protection from financial ruin in the good ole USofA.

Huh? I'm very confused. Typically, insurance will pay a portion until you hit whatever amount (deductible/out of pocket max), then it'll pay more/all of it. So your friend either doesn't have true insurance, has something different but calls it insurance, or is just really terrible at understanding how insurance works.

[iris lily]

re the 600k bill, I forgot to add in the catherization that is another 10 to 20 k, I think Medicare would then pay 60k for the surgery. I highly recommend insurance as others said you can not negotiate a 50 percent discount for self pay. Then there is post discharge care like cardiac rehab.

I am glad your spouse had the surgery and is doing well. Count your lucky stars.

My spouse and I are so close to Fire and are worried about insurance also. I know in my state there is always Medicaid for back up catastrophe and self pay for the office visits and labs and such, I am also looking into Cobra and the ACA.

Actually, you can negotiate cash payment for self-pay. I have a pretty close friend who has had major health issues over the past 10 years. She is a unique flower, she would be the first to admit it. But for political and personal reasons, she does not have health insurance. She has significant family money, however, I’m not sure how much of that goes to pay her health bills. I think not a lot actually.

Anyway – she’s had ongoing cancer treatments. Then she was hit by a car as a pedestrian and that was at $350,000+ in  hospital bills and I don’t know how how much in  attendant physician care. Following rapidly she had appendicitis, gallbladder, dental surgeries.  The driver of the car that hit her had minimal liability insurance, I’m thinking it was $75,000? So that was a drop in the bucket.

She said she negotiates these bills down to 1/3 of what they were. She’s a pretty savvy business person, having owned her own company. So this is her style – rack up the health care bills, negotiate them down, pay them.

She lives very very simply. When she came home from the hospital incapacitated from her automobile run in, a social worker came to visit her and talked about getting on Medicaid. My friend nodded and smiled But ultimately ignored her,Understanding the social worker would have no frame of reference for her situation. The social worker would have “seen “a senior citizen woman living in a small, old, worn one bedroom apartments in a middle class/blue collar neighborhood,having no idea of the family estate that’s behind this.

Tl;dr Yes one can in modern America pay one’s significant healthcare bills. But the OP neither has The sophistication nor the resources to do that.

Dammit. I need to get me some of that *sophistication. Haha

You, sir, are a peach for putting up with face punches!

[KBecks]

At age 50, I expect that you are just approaching the expensive stage of life.
Take care of yourself and hope for the best!  While we could afford a lot of basic health care, insurance is for catastrophes and we do not underestimate life's ability to randomly kick a person in the... (pick a body part).

[Cassie]

My healthy, young DIL had a million dollar surgery.

[jim555]

Let's say you went with no insurance.  Medicaid is retroactive to 90 days, so you could get sick and get Medicaid later.  The only catch is you would need low income in those retroactive months to qualify for it and your state must have expanded Medicaid.

[Monerexia]

Let's say you went with no insurance.  Medicaid is retroactive to 90 days, so you could get sick and get Medicaid later.  The only catch is you would need low income in those retroactive months to qualify for it and your state must have expanded Medicaid.

Yes I'm well over 3x avg household income so in that sweet spot--way too rich to actually be poor and way too poor to use rich guy tricks to appear poor. :(

[Monerexia]

re the 600k bill, I forgot to add in the catherization that is another 10 to 20 k, I think Medicare would then pay 60k for the surgery. I highly recommend insurance as others said you can not negotiate a 50 percent discount for self pay. Then there is post discharge care like cardiac rehab.

I am glad your spouse had the surgery and is doing well. Count your lucky stars.

My spouse and I are so close to Fire and are worried about insurance also. I know in my state there is always Medicaid for back up catastrophe and self pay for the office visits and labs and such, I am also looking into Cobra and the ACA.

Actually, you can negotiate cash payment for self-pay. I have a pretty close friend who has had major health issues over the past 10 years. She is a unique flower, she would be the first to admit it. But for political and personal reasons, she does not have health insurance. She has significant family money, however, I’m not sure how much of that goes to pay her health bills. I think not a lot actually.

Anyway – she’s had ongoing cancer treatments. Then she was hit by a car as a pedestrian and that was at $350,000+ in  hospital bills and I don’t know how how much in  attendant physician care. Following rapidly she had appendicitis, gallbladder, dental surgeries.  The driver of the car that hit her had minimal liability insurance, I’m thinking it was $75,000? So that was a drop in the bucket.

She said she negotiates these bills down to 1/3 of what they were. She’s a pretty savvy business person, having owned her own company. So this is her style – rack up the health care bills, negotiate them down, pay them.

She lives very very simply. When she came home from the hospital incapacitated from her automobile run in, a social worker came to visit her and talked about getting on Medicaid. My friend nodded and smiled But ultimately ignored her,Understanding the social worker would have no frame of reference for her situation. The social worker would have “seen “a senior citizen woman living in a small, old, worn one bedroom apartments in a middle class/blue collar neighborhood,having no idea of the family estate that’s behind this.

Tl;dr Yes one can in modern America pay one’s significant healthcare bills. But the OP neither has The sophistication nor the resources to do that.

Dammit. I need to get me some of that *sophistication. Haha

You, sir, are a peach for putting up with face punches!

Haha yes soon they will be envious of my sophistication--and I shall insert the they of my choice. May even revisit GRE vocab and get the Strandmoks out of the closet...

[jim555]

Let's say you went with no insurance.  Medicaid is retroactive to 90 days, so you could get sick and get Medicaid later.  The only catch is you would need low income in those retroactive months to qualify for it and your state must have expanded Medicaid.

Yes I'm well over 3x avg household income so in that sweet spot--way too rich to actually be poor and way too poor to use rich guy tricks to appear poor. :(

If you could realize all your income in one month all the other months would be low, so your risk would be one month.