Health Insurance: Worth the expense? Looking for advice

I would be extremely worried about that slim chance that something catastrophic would happen. With the costs of hospitalizations and associated treatments today you can easily blow past the 10K mark in bills within a short period of time.

Also what would happen if one of you were in a serious accident that required extended treatment, therapy and/or surgery? Or if you were diagnosed with cancer or some other serious condition? Getting any type of insurance at that stage would be much harder, assuming you could get any at all. Unless you and your wife were essentially financially independent you could end up spending all of your savings and then some.

I can understand where you're coming from in terms of wanting to self-insure. Especially with high-deductible plans which still run over a hundred and fifty dollars a month. But the consequences of not having health insurance when you really need it are serious enough that I would strongly encourage you to go with one of the high deductible plans (which ever one makes the most sense for where you are now). It's just not worth the gamble, especially when it comes to your family.

 

Danny:
Don't forget that, with insurance, you are charged at negotiated rate, which is much lower (up to 50% off) than the normal rate (what they charge you if you don't have insurance). Also, in an unlikely but possible event, a C-section operation could cost beyond $20K due to delivery complication and longer stay at hospital.

I would still suggest a higher deductible HSA plan.

 

N one wants to think about catastrophes, but remember that when you have a baby, you have a chance of having a baby with serious health issues. Could you afford neonatal ICU for 2-3 months for a preemie? Unfortunately in our current world of health issues, one must have some sort of catastrophic coverage unless one is willing to give up everything in the way of assets. To me, it's too big a gamble.

 

Danny's having a baby? Congrats!

I don't know your employment situation, but many states offer subsidized rates to self-employed individuals and families.

Here are a couple of sites that will help you compare rates:

http://healthinsuranceinfo.net/

https://www.ehealthinsurance.com/

 

You also have the option of traveling to Thailand or India for treatment if needed.They have reportedly as good or better facilities as the US but charge only 10% of the US cost.There are staff there who were trained and worked in the USA.The USA built the Thai hospitals during the Vietnam war.
The Indian hospitals look like 5 star hotels.
You cant sue if things go wrong though.
But you cant sue some US HMOs either.

 

well, my answer will be predictable... we collected over $50k in insurance-paid benefits while DH was at the dealership. (once we hit that number, i was far too depressed to continue keeping track.) that's from his sleep apnea (no indication there, we just thought he needed a lot of sleep until it crossed a threshold and became a major issue), a little back pain that turned into a big mess, and a tumor that showed up out of nowhere in my left breast to wreak some havoc.

sure we paid a chunk in premiums, and we paid our own dear share of money... but adding $50k to that would have cost us everything we've got.

though those deductibles are pretty hardcore... we were previously dealing with a $1750 deductible. how hard have you shopped around here? bcbsnc has a self insurance plan that wouldn't ever insure us because of our history, but you can get a fairly reasonable rate in comparison. usually they provide a copay option instead of a straight deductible-coinsurance situation. (i think you only stand to benefit from coinsurance if you've got serious health issues anyway, copays kicked our asses in 2006.) maybe your state has a similar thing you can check out for reference.

yes, pregnancy coverage is expensive through the self-insure stuff too... i suggest that if you're not ready to face the cost of prenatal surgery or emergency c-section or any of the other high cost possibilities, to keep a close eye on proper birth control use!

i won't dig up how much my tumor ultrasounds cost... i imagine maternity ultrasounds are more.

my point here is that accidents and other things you can't predict are what's most likely to take you out financially. i'd shop around more because those rates are pretty harsh, maybe you can find something more reasonable to provide a safety net for yourselves.

 

I really don't know the answer to your question, Danny, but health care seems like a lose-lose situation at present in the USA. The cost of insurance is staggering, but the cost of a catastrophic illness is even more staggering. That's why a lot of people stay with jobs they don't like, because those jobs provide health coverage.

The average insured person will pay in more in premiums than he/she ever receives in benefits. But the uninsured person that gets cancer or has a serious accident will be bankrupted.

I think 2007 is the first year that my benefits for the year have ever exceeded my premiums for the year. But that's because I had two operations. I don't expect a lifetime of paying in premiums ever to be justified by my actual medical expenses. However, that can change in the blink of an eye with a serious accident, or a diagnosis of an incurable illness.

In the end I have to advise carrying insurance if you can afford it. And since I can afford it, I go with lower deductibles and copays. Not the very lowest, but not high. And I'd advise including the maternity coverage if you plan on having kids. I guess I'd have to recommend making that decision, one way or another, now, even if you're going to wait a few years to have them, so that you get to 80% or 100% coverage before the time comes.

No easy answers. It's a lose-lose no matter what.

 

If you can predict the future with 100% certainty I guess you know whether you'll come out ahead or not by self-insuring.

My wife had a healthy pregnancy, and our son had a relatively minor problem with fluid in his lungs when he was born, which required about a six day stay in the infant ICU before he could go home. Total cost: about $100,000. With our insurance I think we paid about $1000 out of pocket.

 

Uh, that's fine if you actually save that amount each month and don't dip into it. AND don't get seriously ill until you've got a big nest egg.

Think of it this way.

You can have appendicitis at any time. Without surgery, you die. Go price an appendectomy, everything including all of the post op AND lost wages for 6 weeks. Then see how long it will take you to save enough to cover that appendectomy et al.

If you could afford the lowest deductible with maternity I'd go for that. Even if it meant brown bagging lunches and cutting way back on going out to dinner and a movie. All it takes is one major medical emergency to ruin you financially.

And be sure to get Galaxee's input. She *has* insurance and look what happened to DH.

 

definitely get the health insurance and dont think twice about how much it costs. Theres no other option, this is your life were talking about.

And if your having a kid multiply that importance by infinity, you cant put a value on your child having parents.

remember the stock market is worthless if your not around to use it

 

The other option is to hope Hillary can bring us into the civilized world of universal heath care.

 

With all the same jokers in Congress? And the private health-care lobby shoveling money into their pockets? Good luck!

 

Some advice from someone who is gainfully self-employed. I went through the analyses over and over again a few years ago after I left a very good job to start my own company with a few partners. Here it goes:

1) You MUST have health insurance in case of catastrophe. Consider it a cost of being in business. In your situation, I would opt for the $10K HSA. Maternity coverage or not is a personal choice. It's not much money, so get it if it makes you feel better.

Are you going to be self-employed? Then...

2) You MUST have long-term disability insurance. Plan on $800-$1K/yr. Northwestern Mutual has by far the best rates and terms for the self-employed. The terms are extremely important. Northwestern's policy pays full disability for life if an injury ends your current career, even if you can still work in a different career. To get the lowest rates, opt for the longest time you can get by without being paid before disability kicks in. Choosing 180-365 days nets a MUCH lower rate than 30 days, for example. Remember that the idea is to get the lowest rate that pays out the highest lifetime benefit. Two very important points about self-employed long-term disability insurance: 1) the premiums are paid with post-tax money; 2) because the premiums are paid post-tax, if you ever go on permanent disability, the payouts are tax-free for the rest of your life. Factor this in when selecting your plan so you don't buy too much coverage.

3) Got a sizable mortgage? Planning on or have kids? Then you MUST have adequate life insurance. Regular 20-yr or 30-yr term is fine for most cases. Shop around. My auto/home insurance company had the best rates for me. Start there first. If you have been with them for years, they know you well and usually give multi-policy discounts that you will not find if you buy it a la carte somewhere else. Buy enough life insurance to fully cover your debts and have a decent amount of spending money left over. For example, if you have a $200K mortgage as your primary debt, then a $250K-$350K policy should suffice. Remember, the goal is to leave your wife and kids without debt, not strike it rich. Buying too much life insurance means paying way higher premiums. Most people are better off with less life insurance and putting the savings into some mix of money market, CDs, and/or stocks/bonds.

4) Sign up ASAP for a self-employed 401K or Keogh. Fidelity is very easy to deal with for this and has zero management fees. The 401K will let you put away the standard maximum amount, $15.5K for 2008. If you can afford to save more and you earn enough, the Keogh profit-sharing feature lets you put away up to another $29.5K ($45K total) per year as profit sharing. Once a business gets rolling, maxing this out is easier than you might think.

5) DO NOT waste your money on short-term disability. Too much cost. Way too much hassle to prove a claim. Just save money in a money market account for a rainy day.

Items 1-3 above are just costs of doing business. IMO, it's insanely risky not to have all three if you work for yourself, especially if married and/or with kids. Anything can happen. You could be permanently disabled or killed in a car accident tomorrow. You and your family will be thankful beyond words if something bad happens and you have proper insurance to cover it.

Good luck!

 

Danny,
HSA is definitely the way to go. Anyone who is not on HSA should study it and decide.
It is a good plan/regulation from Fed.
That said, you may also raise deductibles of auto-insurance and home insurance to cut cost. If cutting cost is the main issue here, then, don't limit yourself to health insurance.

 

i knew you knew better.

 

Yep. Your family is definitely worth more than your car. (Even if it is a Prius. )

 

I am lucky to have the insurance that I have through my union. It really costs me very little out of pocket. That said, to purchase insurance for yourself can be insanely expensive. I had 40 days between when I aged out of my parents plan and when my union plan kicked in. The cost for that period was over $1000 to keep what I had previously had. I made the tough decision to go without for that short period and fortunately nothing happened. I have plenty of friends around here who freelance and carry no insurance at all and that really scares me.