Author Topic: Super healthy freelancers who want to FIRE, is self-insurance the best deal?  (Read 3100 times)

juliav

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I'm having a very hard time justifying paying for health insurance given my outstanding health, the fact that I would be happy to pay for annual check-ups out of pocket and that I would rather stop working and qualify for Medicaid if there's any catastrophic event. I do value the HSA, my favorite savings vehicle, but I wouldn't pay for it either.

Is anybody in a similar situation? I used to have catastrophic insurance only but Polis banned it this year, so didn't even bother renewing it for a bloated ACA plan.

Wondering if self-insuring in healthcare is a good way to compensate for my continuously inflating rent in Westminster, because it would keep housing + healthcare costs at a reasonable % of income (just under 35%). BTW the preventive stuff I did this year I had to do out of pocket (Gardasil because I don't have HPV), UHC's argument not to cover it even though the FDA recommends it for women under 45 was literally "almost every American women your age is infected". Left me feeling that health insurance isn't even good for preventive.

RedmondStash

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It depends on your personal comfort level. I've gone without insurance at various times in my life.

But those catastrophic events can happen fast and unexpectedly, no matter how outstanding your health. I know I wouldn't go without health insurance again. I'm currently not working, so I'm buying individual insurance. It is quite expensive, but I guess I'm used to that.

Might you qualify for an ACA subsidy? That could offset the cost quite a bit.

Basically, going without health insurance is Russian Roulette. You might well get lucky for the rest of your life. Or you might not. Of course, even with insurance, you could end up with whopping medical bills. There really is no great option here.

(Edited to change "self-insure" to "buying individual insurance." I was tired when I wrote the original post.)
« Last Edit: November 18, 2019, 01:41:05 PM by RedmondStash »

Fru-Gal

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It's a giant racket.

Juslookin

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My perfectly healthy 40 year old husband was sitting at a red light when a tractor trailer without adequate insurance, lost control and hit 8 cars. 3 people with potentially catastrophic injuries, including DH. Auto insurance medical payments coverage exhausted immediately and we were left with bills of almost $1,000,000. which went to our health insurance. We were out of pocket only $500.00. Which we obviously recovered after the trucks pathetic policy limits were divided up. Their policy never would have been enough to cover all of the meds.

We would have been bankrupted if not for our health insurance. As PP said, it’s all just a huge gamble. So do you feel lucky? Good luck!
« Last Edit: November 16, 2019, 06:23:23 PM by Juslookin »

Monkey Uncle

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Going without health insurance in the U.S. is colossally stupid.  Doesn't matter how healthy you are, some major health issue can still crop up.  Young, healthy people get cancer and other major maladies all the time. 

A former co-worker of mine, a very healthy man in his early 30s, was diagnosed with bone cancer in one of his legs.  He went through surgery, chemo, radiation, and PT over the course of about 2 years.  After all of that, he has been in remission for years and is going about his normal life, but if he hadn't had health insurance, he and his family would have been bankrupted (and he probably would have died because he would not have gotten all that care if he was uninsured).

My otherwise very healthy son had appendicitis when he was 19.  If we hadn't had insurance, the routine laparoscopic surgery would have cost over 20 grand.

If you think you might qualify for Medicaid, go ahead and sign up.  Don't wait until you are sick - it's too late then.
« Last Edit: November 16, 2019, 06:21:42 PM by Monkey Uncle »

Sibley

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I can remember at least 3 different threads about the same topic. They all go the same way. Some OP thinks they're healthy and invincible and doesn't want to pay for health insurance. They ask if this is a good idea. Then dozens of people respond with some variation of "NO".

Look, it doesn't matter how healthy you are. Sure, you can self insure for the regular checkups and stuff. Insurance isn't for that stuff though, not really. It's really for the oh shit stuff. It's the oh shit, appendix burst. Or oh shit, drunk driver/winter storm/fog/stupidity and someone smashed your vehicle, leaving you with serious injuries. It's the cancer diagnosis out of nowhere.

So, no. If you're in the US, you can not afford to be without health insurance. If you choose to ignore this, that's fine. Just do not ask taxpayers to bail you out. You have zero excuses here.

Cranky

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If you have to worry about rising rent costs, you are in no position to self-insure. Self- insurance means that you have a few million dollars set aside for health care.

Find a high deductible policy and pay out of pocket for your ordinary health care costs. Health care isn’t that expensive, right up to the point where it suddenly is.

Mtngrl

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I managed a medical clinic for several years. I encountered plenty of 'super healthy' people who didn't have insurance and suddenly faced catastrophic illness. Two examples that come to mind are a twenty-something tri-athlete who tripped going downstairs to the laundryroom and ended up a quadraplegic. Millions of dollars in medical bills. Another young man with no family history and no bad habits developed testicular cancer. He survived, but only after again, millions of dollars in care. These two cases had to rely on charity and family and eventually Medicaid. But Medicaid takes a while to kick in and in some cases you might not have a while.

SwordGuy

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Super-healthy people get hit by cars.

Super-healthy people trip and fall.

Super-healthy people get shot.

Super-healthy people discover they are no longer super-healthy.

Fru-Gal

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Edge cases presented as the mean is the best you can expect from this question but plenty of people do self-insure.

Paul der Krake

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Edge cases presented as the mean is the best you can expect from this question but plenty of people do self-insure.
Idiots and paupers (or both at the same time), sure. No shortage of those in America.

Fru-Gal

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Thanks! Really it is helpful as I'm wasting entirely too much time here.

waltworks

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Look, again, for people who don't get this: self-insurance doesn't mean going without insurance in the hopes that you'll be fine. Self-insurance (like, say, if you're a giant corporation, or a very very rich individual) means that while you'd rather not cough up millions of dollars in a worst case scenario, you could easily do so, so you don't worry about insuring against unlikely events that will cost millions of dollars. Jeff Bezos can self-insure. Walmart can self-insure. You probably can't.

If you aren't super rich, and millions of dollars in medical bills would bankrupt you/ruin your life, then going without health insurance isn't "self insuring". It's just gambling that you'll stay healthy, since you can't/won't pay for medical care in the event that you need it.

You can decide that's a good idea, fine with me. But don't call it "self insuring". Because that's not what you're doing.

-W

Paul der Krake

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Maenad

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Edge cases presented as the mean is the best you can expect from this question but plenty of people do self-insure.

"Average number of car accidents in the .U.S. every year is 6 million. More than 90 people die in car accidents everyday. 3 million people in the U.S. are injured every year in car accidents. Around 2 million drivers in car accidents experience permanent injuries every year." (From https://www.driverknowledge.com/car-accident-statistics/)

Given that 1% of the US population is injured every year in car accidents, that's not an edge case. 1% is actually a huge number when one is talking about the risk of being bankrupted by medical bills. In my industry (medical devices) a 1% occurrence rate* with a high severity is unacceptable enough to kill development of a product.

*Assuming the rate can't be reduced, etc.

hudsoncat

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I'll just add my story even though it probably beating a dead horse at this point.

Super healthy. Seldom even a cold. While switching jobs, I was going to be without insurance for 5 days. What could go wrong, right?!

Turns out getting bit by a Brown Recluse Spider. I had a very bad reaction and ended up in the hospital for 3 of those 5 days without insurance. Luckily I was able to pick up COBRA from my previous employer and it is retroactive to the first day without insurance. Looking at the hospital bill before the insurance kicked in was enough to make me never want to be without insurance again.

Laura33

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You can do whatever you want.  Just don't call it "self-insuring."

What you are doing is "free government insuring."  You are relying on voluntary impoverishment so that Medicaid covers you, followed by SSDI to cover your expenses if you are permanently disabled. 

Personally, that's not a risk that I'd be willing to take; having known people who relied on Medicaid and had no assets of their own, I'm not willing to be that helpless and give someone else that degree of power over what treatments and medicines I can get -- and I'm certainly not willing to rely on the continued goodwill of the American people to fund programs for the poor so they'll be there if/when I need them. 

But that's me, not you.  As long as you're knowledgeable about the real risks and consequences and willing to accept them, go for it.  Just don't bitch about how horrible the system is if things do go wrong.

jim555

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I think your plan is super risky.  Sudden events can land you in the hospital and by the time you qualify for any program your medical bills will probably have bankrupted you.

DaMa

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It always amazes me that people ask this.  We think nothing of paying for car insurance and home insurance, and yet the potential loss is so much less that the potential loss from unforeseen healthcare.  And it's not just about bankruptcy. You may not be able to get treatment if you can't pay.   Chemotherapy is not emergency treatment. 

Buy the cheapest ACA policy with the biggest deductible that's available to you.


Altons Bobs

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I thought I was super healthy too since I was working out 5-6x/week and I drank raw green juice everyday, until I was diagnosed with a new condition earlier this year. I'd only consider self-insuring if I had at least $100mil. If you only have a few million dollars in the bank, you're not wealthy enough to self insure unless you just want to rely on other people to take care of you when you lose all your money, which is irresponsible. My state does not have Medicaid expansion, so Medicaid is only available to pregnant women, children, and poor people over 65.

RedmondStash

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It always amazes me that people ask this.  We think nothing of paying for car insurance and home insurance, and yet the potential loss is so much less that the potential loss from unforeseen healthcare.  And it's not just about bankruptcy. You may not be able to get treatment if you can't pay.   Chemotherapy is not emergency treatment. 

This is an excellent point. I think we put car insurance into a "mandatory" category, but health insurance into an "optional" category, because the law doesn't require you to have it. But your health is more important to safeguard than your car.

reeshau

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If you have to worry about rising rent costs, you are in no position to self-insure. Self- insurance means that you have a few million dollars set aside for health care.

This is the heart of the matter, as others have built on.  Self-insure, which is common for larger companies, means you can cover anything.  Doing it individually means the same thing.  You cannot avoid every health risk, as the many examples here show.  And that's not insuring, anyway.

It doesn't matter the topic:  car, home, health, life, disability, long-term care.  Insure for any risk that you cannot cover yourself.  And, as a slightly lesser sin, don't bother with those small things that you can cover:  making a claim for a windshield fix is going to cost you in the long run, not save you.

wenchsenior

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Going without insurance in this country is absolutely insane IMO, unless you can potentially cover millions in medical bills, or tens of thousands of yearly ongoing medical costs. Or you are willing to become impoverished and use Medicaid {ETA: assuming you are in a state that expanded Medicaid, which ours did not, so N/A}.

I've seen so many incredibly costly medical events happen over the past few years to people that I know...without insurance these people would all have been bankrupted, in some cases within weeks.  One unexpected accident and an emergency surgery/brief hospital stay, or any kind of ongoing treatment (e.g., our formerly athletic and healthy-living friend diagnosed with an autoimmune illness that requires ongoing drug treatment that costs more than his annual professor's salary), and you are into the million dollar+ range shockingly fast.
« Last Edit: November 18, 2019, 04:51:24 PM by wenchsenior »

Paul der Krake

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Turns out getting bit by a Brown Recluse Spider. I had a very bad reaction and ended up in the hospital for 3 of those 5 days without insurance. Luckily I was able to pick up COBRA from my previous employer and it is retroactive to the first day without insurance. Looking at the hospital bill before the insurance kicked in was enough to make me never want to be without insurance again.
For anyone else reading this who doesn't know this great little nugget: COBRA generally allows ex-employees to sign up retroactively for up to 60 days after coverage ends.

My own family is taking advantage of this this December before ACA coverage starts in January. It's the only time I would consider going "without insurance". You can actually roll the dice because there's a legal guarantee.

Hula Hoop

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I was a perfectly healthy, non-smoking, exercising, normal weight 30 something when I started feeling bad and ended up being rushed to the hospital for emergency open heart surgery.  Then a bunch of other bad stuff happened.  I'm fine now though but would have been in extreme difficulty if I'd still lived in the US and didn't have insurance. 

ROF Expat

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First post: 

"I would rather stop working and qualify for Medicaid if there's any catastrophic event"

Is this just a troll?

dogboyslim

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My perfectly healthy 40 year old husband was sitting at a red light when a tractor trailer without adequate insurance, lost control and hit 8 cars. 3 people with potentially catastrophic injuries, including DH. Auto insurance medical payments coverage exhausted immediately and we were left with bills of almost $1,000,000. which went to our health insurance. We were out of pocket only $500.00. Which we obviously recovered after the trucks pathetic policy limits were divided up. Their policy never would have been enough to cover all of the meds.

We would have been bankrupted if not for our health insurance. As PP said, it’s all just a huge gamble. So do you feel lucky? Good luck!

FYI, this is what UM/UIM coverage at high limit amounts helps deal with.  It stands in to make up for the lack of BI limit by the at-fault driver.  Luckily your Health insurance covered it, but for those on HDD plans the out of pocket could have been MUCH higher.

Samuel

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If you aren't super rich, and millions of dollars in medical bills would bankrupt you/ruin your life, then going without health insurance isn't "self insuring". It's just gambling that you'll stay healthy, since you can't/won't pay for medical care in the event that you need it.

You can decide that's a good idea, fine with me. But don't call it "self insuring". Because that's not what you're doing.

This. The textbook purpose of insurance is "transfer of risk". There's a small risk of a young, healthy person requiring medical interventions costing 6 or 7 figures, but should that small risk materialize the results would be financially catastrophic. Insurance companies take on that small risk on behalf of a very large number of people in exchange for premiums.

Unless you have many millions to spend on medical care you're not self insuring, you're rolling dice with your entire financial life on the line.

Buy the cheapest ACA policy with the biggest deductible that's available to you.

This too.