Slashdot Mirror
Health Insurance for the Self-Employed?
SharkJumper writes "Looks like this question has been asked before, but might be due for an update. I'm a self-employed programmer who is about to become a father. Previously, my family's insurance has come through my wife's employer, but she is eagerly looking forward to being a stay-at-home mom. We must look for that elusive low-cost insurance in order to enable her to do this. Losing her insurance is not a huge loss as, due to failed negotiations, the hospital in our city (3rd largest city in the state), along with most of the doctors that refer to it, is dumping the network (largest in the state) that our insurance uses. On the individual coverage plan front, my research shows story after story of deception, fraud, and general run-around or obfuscation by most of the major players and nearly all the minors. With all of the bad experiences out there, I've yet to see a good review of an insurance company. What does the Slashdot crowd use and recommend? Company and plan-type? PPO? HMO? HDHP + HSA (High Deductible Health Plan + Health Savings Account)?"
Even if your wife leaves her job, she (and the family, if you have a family policy) can stay on her former employer's health insurance for 18 months under COBRA. But they can charge you the actual cost of the policy plus two percent. (Meaning if she currently plays 80% of the cost of the policy through deductions and the company pays the other 20% percent, after you go on COBRA you'll pay the 80% + 20% + up to 2%. The HR department of her company can tell you the COBRA rates.)
After the 18 months of COBRA runs out, the insurance company is required to offer you a non-group policy that is not medically underwritten. I think they usually call this a HIPAA policy. This will probably be more expensive than the policy you get through COBRA, but you can't be denied for pre-existing conditions.
It's been a while since I've read the DOL publication on COBRA, so follow the link above to verify that none of the details have changed.
Unfortunately, I have way too much experience with health insurance, so here's my suggestions.
1. Extend your wife's plan with COBRA even after she quits at least until your baby is born. Do this, even if that means traveling further because your closest hospital is no longer in network. My first child required an emergency C-section and a few days in the neonatal ICU. He was almost 11 pounds at birth and there was no way he was coming out through the in door, so to speak. The bill was pretty amazing, but I didn't have to pay much out-of-pocket. So, if there are additional expenses related to your child's birth, at least you won't be completely screwed. On a side note, my son ended up with cerebral palsy, possibly due to decisions made by our doctor and his team. Learn up front about what can go wrong, and don't assume the experts are paying close attention to your wife/child.
2. Never go without health insurance and life insurance. I was 33 years old and my wife was pregnant with our third child when I found out I had testicular cancer. I caught it before the cancer had spread, but I still required one minor and one major operation, all kinds of diagnostics, and years of follow-up. My bills, way back in 1994, were well over $100K. My insurance at the time covered almost all expenses. Because I had life insurance, I had one less thing to worry about. Without life insurance, I probably would have died simply from stress.
3. If you have pre-existing conditions, you really need some type of group plan. Individual insurance plans are out of the question if you have any kind of serious pre-existing condition (cerebral palsy, testicular cancer, etc.). I know, because I tried this route. I pay around $10K per year for medical/dental at my current company. I thought that was a ripoff until I tried to get insurance on my own. Your only reasonable way to get health insurance is to be in some kind of group plan where your risks can be spread across a large pool of individuals. Even then you may have problems if you have any coverage gaps or you aren't going into a large enough group plan. If you have no pre-existing conditions and are healthy, the medical savings plan along with a high deductable plan is a cost-effective approach.
4. Without health insurance, you pay much higher rates for the same procedures/care. I recently had a 4-day stay in the hospital (as a result of the cancer surgery 10 years earlier). The unadjusted bill was 3 times the amount of the adjusted bill. Without insurance, you get the unadjusted bill and no expert on your side to help negotiate the bill down.
Hopefully your luck will be better than mine when it comes to health. However, I can say that insurance has saved me from financial ruin on more than one occasion. More important, insurance allowed me to make career and life decisions (like having more than one child) that I may not have made if I was paying out the ass for the rest of my life due to one bad medical experience.
I wish I had an answer for our country's current medical insurance problem. I don't think a government-based single-provider solution is best, but I think government may need to help fund large group plans that are affordable for the tens of millions of americans that want insurance but can't afford it. The uninsured are driving up costs for the rest of us by waiting too long to get care, and then entering the system directly through hospital emergency rooms. I'm encouraged by the pay-as-you-go clinics that are popping up at Wal-Marts and elsewhere for non-emergency care. It costs a lot less to pay $25 at a clinic to have your kid checked out than to wait until your kid is seriously ill and then take him/her to the emergency room.
Best of luck with your new family.
Canada is no panacea either. Here is how Canada works. For the most part things that are common get covered, myself I pay about $100 a month for insurance to the state (provincial level), $50 for my group plan from my employer (a similar non-group plan would cost $300 for my family). My health insurance would be more to the state but because my wife is stay at home we put the kids under her free plan from the state. (For some reason there is no law requiring a family claim together). I think it would be around $200 a month if we claimed together and her and the kids would pay a whole bunch of user fees and lose a bunch of benefits. That is the funny thing, I pay more and am covered for less. Anyway, so how it works is anything that is expensive doesn't get covered, or they don't have enough machines so you merely die on a waiting list rather than getting denied coverage. In anything cutting edge we are far behind the latest technology so that it doesn't cost so much. Basically, health care in Canada is cheap because we ride on the coattails of the expensive US system that develops the technology. And the system weasels its way out of anything expensive that isn't common. Get Cancer in Canada and you will spend $3000 a month buying drugs. The funny thing is its also ripe with corruption and misallocation of resources.