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Health Insurance When Leaving the Corporate World?
An anonymous reader writes "I've been working at a large company since I got out of college, so I didn't have to give much thought to getting my own healthcare plan. Now I'm thinking about leaving the corporate world and starting out on my own. I have a family now, so I need to make sure we're going to be covered should anything happen. Researching online turns up horror stories of people trying to get individual healthcare plans, or getting denied coverage on plans they thought they had. Does anyone else have experience going through this and what you've had to deal with, or am I making too big a deal of it?"
Good luck. Depending on what state you live in, you are either well and truly fucked, or deeply, seriously fucked.
The best thing you can do is start a trivial corporation, hire on some fake employees, and then get a group plan.
and enjoy universal health care for about $100 per month for a family of 4, unless you can show economic hardship, and then it's free.
When I was self-employed, I was able to get cheaper insurance through my local Chamber of Commerce. I had to join (and pay the membership fee), and it was still expensive, but nowhere near as bad as if I'd done it all by myself. And don't just limit it to your own town - a lot of them don't care where you live/work as long as you're close enough to be in the same general area :)
If you live where they serve. I've had them for 35 years, my daughter was born in their hospital, wife had multiple surgeries. Get the plan with the highest co-pay and then self-fund an HSA account to cover the copay and other things like eyeglasses. About half the price of the mainline insurance companies and no worries about how much the 80/20 costs will bankrupt you. And yes, small business and self-employed plans are available.
"Eve of Destruction", it's not just for old hippies anymore...
FYI, in the U.S., you can buy health insurance at a discount by joining either a freelancer's union or your local Chamber of Commerce. I did the latter when I was freelance. Most CoC's offer health insurance packages to their members at group rates, e.g. lower than what you'd pay directly. Still expensive, though. You definitely need to factor that into your budget.
Liberal? Conservative? Compare perspectives at Left-Right
I bought an HSA when a few years ago my company raised insurance premiums. They had a plan and were self insured so basically we just paid for what the cost was divided by number of employees. We had some employees that enjoyed the outdoors and got into a lot of accidents that raised the costs for everyone. My family plan was $700/mo.
So I went out on my own and got an high deductible HSA from Humana. It was about $200 a month for a family of 4. It had a $10k deductible so basically you are paying for your own health care unless you have something major happen. Then it paid 100% above the $10k. The good part is you can put up to $10k pre-tax into the HSA savings account. You can then pay your health bills using pre-tax money. They had a PPO which means they have a network of doctors you can use that they have a negotiated prices. But you can use any doctor you want.
What I found is that we shopped around. You would be amazed at the difference in prices if you say you will pay at the time of service. Some doctors wouldn't quote us a price for the visit so we didn't go there. Also we shopped around for drug prices and found that most of the big pharmacies will match prices.
Small group insurance is _much_ better than individual because group policies -- even for just two people -- must be issued. Individuals can be turned away but groups cannot. At least that's the law in California.
He could join his local Chamber of Commerce as well. Most offer group plans to members to help address this exact situation.
There are other professional groups that have insurance programs.
For instance, the ACM has insurance programs, though I don't know much about the cost or coverage. The IEEE has a similar set of programs, though it does not look like they have a straight health insurance offering. If you are going on your own, it might help to start a formal business - you might be able to get a small employer program.
You will spend a fair amount on medical care for kids, even if you just do the normal preventive care. The cost of a whole-family plan will reflect that. If I had a young family now, I would seriously consider a high-deductible plan. You pay for most of your own care, but the insurance is there in the event that you have major expenses.
Floating face-down in a river of regret...and thoughts of you...
On the off chance you find something decent, budget that rates will explode over the next couple years. In Michigan people who buy their insurance individually were hit by a 56% increase this year. Other states have similar problems.
Individual health insurance is an absolute joke in the US, especially for family care. If you do 'go it alone' and you don't make a ton of money (well into six figures) then you might as well just skip to the end, flush your cash down the toilet and file for Medicaid. You will end up there eventually.
Considering you have a family to look out for, you need need NEED to find a cooperative or small business owners group to buy into that provides benefits. It will still be very expensive, but you *will* be ruined if you go it alone or go without it.
What you want to do is actually very simple and you will not have to enter into the individual health care market. You likely have these options:
1) No matter what, when you leave you'll be given the option to sign up for COBRA. COBRA lets you keep the health insurance you have now and it is mandated by federal law. So long as you pay the premiums, they have to keep you on at the exact coverage you have today. After 2 or 3 years, the insurance company will take you off of COBRA but will be required to offer you a guaranteed issue policy. This option can be pricey.
2) Most states offer some form of socialized medicine. For example, Maine has a state program that anyone can qualify for provided their employer doesn't provide insurance. Massachusetts requires insurance companies offer you a policy (and requires that everyone carry it). If your wife doesn't work or doesn't make a lot, until you can cover your new company's expenses and pay yourself you are low income and will therefore qualify for many of the programs out there.
3) Some states such as Florida require that health insurance companies offer guaranteed issue policies to companies under a certain size (50 employees in the case of Florida). Since your company has only 1 employee, you qualify. Insurance salesmen don't often like to take these policies because the commissions are intentionally set low to encourage the salesmen to put you in an individual policy instead.
Over the last dozen years, things have become bad. This summer, I broke my finger. Snapped the bone clean off near the joint. Drove to emerg. About 12 other people in the waiting room. After 6 hours of sitting, the only person who spoke to me was an administrative clerk who took down my information. I had to go interrupt someone to get an ice pack. I wasn't allowed to eat in case I got called in and they needed to operate. Finally, they called me in to an open bed. Sit for another hour. A doctor comes around and says "your finger is probably broken. Follow the blue line, get an X-ray and come back." 6 minutes later, I've returned; my x-ray done. By this time, the bone guy has gone off shift. Sit in the waiting room another 6 hours. More ice packs. Still not allowed to eat. Another bone guy just finished 6 hours doing surgery and is now doing rounds to talk to people in emergency with broken bones... So I go in. Wait another 2 hours until he gets around to me. By this point, I haven't eaten in the 14 hours since I got there nor the 4 hours prior to when I broke my finger. I _finally_ get seen. The guy looks at my x-ray and says "yup, your finger is broken. We'll schedule you in for surgery. Come back tomorrow at 13:00 (now only about 12 hours away). They tape a splint on my finger and I'm gone... Total attention by medical staff: about 8 minutes. Total waiting time: 14 hours. The next day, I show up for 13:00 for my surgery. I wait 2 hours, go in... 30 minutes later, I emerge with 2 pins and a splint. If someone had chosen to use their brain and said "ok, his finger is likely broken so lets get him in for an X-ray before the bone guy comes down next", I could have avoided at least one iteration. If someone else had used their brain and said "gee, that finger is flopping around like an injured seal. Lets get him an x-ray and book him for surgery tomorrow", I could have freed up a seat and been home inside of an hour...
This isn't abnormal. Last spring, I went to the hospital because my heart was beating at 240 bpm for no apparent reason and had been doing so for 40 minutes. I sat in the waiting room for almost 8 hours before someone even spoke to me (besides the admitting clerk)... By that point, it had gone back to normal and the ECG had nothing intelligent to say. I got to go home, none the wiser. It's happened a few more times since then and I'm no closer to understanding what the problem is. Through experimentation, I've determined I need to cut caffeine out of my diet and I've missed at least 2 recurrences of it.
Things are slightly better at the Children's hospital though... We're usually in and out of there in under 6 hours (active 8 year old boy who likes to play outside a lot.)
I had a stint of several years without corporate insurance. The situation is grim and I can only tell you what I ended up doing.
I too had a family (3 kids and a wife). I found a private plan with Blue Cross that cost around $1200/month and considered it a steal. (Although I was not affected, I heard horror stories about individuals who were unable to get private insurance at any cost.) The coverage was similar to my prior corporate plan but with higher deductibles and more gate-keeping by our primary care physician.
After a year of this I looked around for an alternative and moved to a high-deductible plan with Aetna (deductibles were $5k/person; $15K/family) and opened an HSA. I contributed the maximum allowed to the HSA each year (note, this is not a FSA!). For the remaining years this was the approach I took and it worked well but no one got seriously ill, we didn't need any hospitalization, and only used a hospital once for my daughter's broken foot. For the duration I was with Aetna's high-deductible plan, they paid nothing, but my cost was only $612/month and I got the tax benefits of the HSA.
Absent a health plan you are paying retail for all medical services vs. the negotiated cost your insurer has obtained. You still end up paying a lot (all?) out-of-pocket but at a reduced rate. The same applies to prescription drugs. This negotiated cost business is the secret sauce of the industry. You go to your doctor and he charges you $100 for the office visit and $300 for an x-ray. But Aetna has negotiated these fees to be $65 and $125 respectively which is what you end up paying unless you've reached your $5K deductible. If you've got the money in your HSA you pay it from there using pre-tax dollars. If you don't have any insurance (or the doctor doesn't take your plan) then you pay the whole retail price ($400 in this example).
We had no dental nor eye care coverage for the duration but both can be paid using the HSA account.
In both policies a pregnancy was specifically excluded but we had finished our family by then so it was not an issue for us.
I hope this helps.
Alternatively, just move to Massachusetts. Since MA started requiring all state residents to have health insurance, they've made it easy for anyone to buy individual insurance, with no restrictions, through the Commonwealth Choice program (and there's extra assistance through Commonwealth Care if your income is low enough). I have a mess of pre-existing conditions (diabetes, asthma), and all I had to do was pick a plan and start paying. Depending on the size of deductible and copays, premiums vary widely: I'm paying about $380/month as an under-30 individual with no family, but that's for no deductible and pretty low copays, which are helpful given how much regular care and prescriptions I need; you can pay several times less per month if you think you're likely to need less in an average year. And, of course, you get to deduct the premiums from your taxes if you're self-employed.
how the hell did we arrive at this retarded status quo
Government regulation. Health care became bundled with employment as a response to FDR's wage controls. Later tax benefits for that made it more common. The Federal Government created HMOs, which then expanded the role of health insurance from unexpected events (ie, cancer, breaking your leg, etc) to covering your kid getting a cold. Harry Browne explains this better than I have.
Currently we have a third party (insurance or medicare/medicaid) paying the bills rather than the patient. When a third party pays, costs generally go up since people don't bother to shop around for better deals (or are forced to not to shop around by the insurance company). This raises prices. Real competition will lower prices.
If you look at things people pay for out of pocket, such as Lasik, prices have dropped both in Federal Reserve Notes and in gold/silver while prices in every other form of health care has risen sharply. Same goes with veterinary care. Prices, adjusted for currency devaluation, have dropped over time. John Stossel explains this well.
We need competition. Real competition. We need an end to state mandates. We need competition over state lines (the Interstate Commerce Clause of the Constitution is meant to stop states from preventing commerce across state lines). We need an end to government price fixing. The role of insurance needs to be reduced back towards covering unexpected conditions. We need better fraud laws to protect people from getting dropped from their plans when making a claim. Etc.
Also, we need a focus on nutritional medicine as the majority of our diseases are caused/induced by poor nutrition. Proper nutrition can cure disease rather than just covering up the symptoms with drugs and cause a lower need for surgery.
WE CURRENTLY HAVE. do you not see that?
when you oppose socialized medicine in the usa, because of all the evils of that you see, you merely support a MUCH WORSE STATUS QUO
are you resisting because you have a better solution? (crickets)
The current plans in Congress are, as Representative (and Medical Doctor) Ron Paul puts it, "Corporate Welfare". Howard Dean even agrees with that and referred to the plan as "this is is a giant bail-out. This is a bail-out that makes AIG look cheap. Sixty billion dollars a year go to the insurance companies under this bill."
where do you think these single payer systems gain the medical advances they need to efficiently and effectively treat people?
Many of our big pharma firms here in the US get grants from Taxes, corporations and non profits to create new drugs. Many of the companies patenting new drugs are patenting minor changes and re-branding and marketing the new product for big money. The pharma argument is bogus and invalid, the drug patent system is broken. All the new drugs need to prove is that they are no more dangerous for the population, not that they provide material benefit over previous drugs.
In fact, much of modern medicine is taught and researched at publicly funded teaching university hospitals. Once again, we're already paying for a significant amount of the breakthroughs with our tax dollars. Big pharma and malpractice insurance are the industries that are getting wealthy, and it's at the expense of the lower and middle classes. What happened to the Health Care bill? For one thing, insurance companies are now hiking up thier premiums to finance their lobying expense from last year.
In short, We the People will continue to fund research, as will billionares who feel that they need to help the communities that helped them (charitable organizations such as The Bill and Melinda Gates Foundation)
Most ignorance is vincible ignorance. We don't know because we don't want to know. --Aldous Huxley
Totally man, I feel you. I could counter your anecdotal evidence with my own by telling you about the time I took my son to the emergency room around midnight one night because he couldn't stop vomiting. We got 10 minutes of a nurses time, ~3 minutes of doctor time, a saline IV and a single pill. We didn't leave until 7am, and a few weeks later I got a nice surprise when a $2200 bill showed up because his insurance had been suspended due to incomplete paperwork.
The COBRA premiums reflect the true cost of the coverage. They are the same as the full premium that was being paid jointly by you and your employer. Most employees are blissfully unaware what the true cost of their insurance is -- they think the amounts deducted from their checks are the insurance premium. Actually, that payroll deduction represents only approximately 20% to 40% of the true cost.
The real pain isn't the premium cost -- you already take that into account when setting the rates you will charge as an independent. The real pain is that when you apply for medical insurance and aren't part of an employer group (which includes plenty of young healthies), the insurance companies will assume that you have cancer and AIDS (at least!), and that the only reason you are applying for coverage is to trick them into paying for your expensive bills. They will scrutinize your health experience with a fine tooth comb -- expect even minor nicks in your health to be grounds for them to say no.
Against stupidity, the Gods themselves contend in vain. --Friederich Schiller
And earlier this month Rep. John Murtha of Pa., while in the care of the best health care system in the world, died after a simple gallbladder operation was botched.
Undetectable Steganography? Yep, there's an app fo
Interesting experiences. I too have had experience with both the U.S. and U.K. and I came away with a much higher opinion of the U.K. I lived in the U.K. for about a year and towards the end of my stay my parents came for a visit. My mother hurt her back getting out of the bath on the weekend. By Monday (a bank holiday Monday) she was bedridden and my landlord suggested we call the hospital. I was very skeptical, having grown up with the U.S. system. I called the local hospital (South London - Herne Hill) and the first thing they asked was whether she was well enough to travel to the hospital. If not, they offered to come to the house. I couldn't believe it. I told them we would get her in a cab and bring her over. Once there, there was no paperwork to fill out, and they saw her right away. After just a few minutes she was given a prescription for a muscle relaxer and a pain-killer. Got another cab to take my folks back to my place, and then I asked the cab driver to take me to the nearest chemist to fill the prescription. Got both prescriptions filled for about $16. I tipped the cabbie handsomely when he dropped me at my place. He asked me, "Do you know how much you are giving me here?" I told him I did, and that it was because I was having a great day. In the U.S. I would have had to have taken her to an emergency room. That would have taken 4 to 12 hours of my day and cost her about $500 copayment. Then the drugs would have cost another $65 copayment. In the U.K the whole thing took less than an hour portal to portal, and the cost was $20. As others have commented, maybe the U.K. is better for the little things than the big things, but I've got plenty of U.S. horror stories for big things too. I just find it interesting that the U.K. spends significantly less in terms of GDP and they don't have reduced life expectancy than the U.S.
IMHO Americans really need to get past the solialist bogeyman that is preventing the implementation of a sane health system.
UHC here in Australia costs 1.5% tax on income, I can see whatever doctor I like, often without an appointment. The doctor prescribes whatever tests/pills I need without input from an accountant. I never have to pay more than $1200/yr for medicine, nobody cares if I have a pre-existing illness, if I travel to Europe I get reciprocal care from their governments at no cost to me other than said 1.5% tax. I have statistically better medical outcomes than a US citizen and never have to worry about medically induced bankruptcy. Currently government sponsered doctors are visiting every workplace in the country to offer free health checks as part of the preventative care provided by UHC.
I'm single with grandkids, I earn well above average wage and a back of the envolope calculation says my 1.5% covers 5-6 other Aussies I have never met. However I'm more than happy and proud to pay above my fair share since when I was a young dad the same system looked after my chronicly asthmatic son during the times he needed a hospital bed and specialist care, it also paid for his medicine and saved me from certain bankruptcy.
US citizens already pay more in tax per head for Medicare/Medicaid than Aussies pay for a full blown UHC. I think this is mainly due to the army of paper pushers the US employs to console ignorant people who think of socialised medicine as a government handout.
I'm not saying our system is perfect but it's run by health proffesionals and is demonstratably light years ahead of the US. It is supported by 80% of Aussie voters. It recieves true bipartisan support from politicians, any politician who dared to suggest going back to the previous US style system we had in the 70's would find himself unemployed at the next election.
In the end I really don't care what the US does with health system but having experienced both fully privatised and socialised health care my impartial advise would be to upgrade to a 21st century UHC system and ignore the corporate propoganda that is telling you socilaist death panels will kill your grandma to save a buck.
And did you exchange a walk on part in the war for a lead role in a cage? - Pink Floyd.