MEDICAL INSURANCE
(and Maintaining Your Health)

You WILL find helpful information here (plus some nonsense).
Sorting it out is up to you, but it would be a good idea to do so.

I asked about health insurance on the several forums: "I'd like to hear from people who have actually tackled the issue of health insurance when you're fulltime self-employed."

Here (edited) are some very informative responses, some wise and some (the ones that recommend doing without insurance) very foolish choices: 

"I have my own insurance, like any business owner. It's part of the legitimate cost of doing business. "


"I have an HSA (Health Savings Account) policy. As a self-employed individual, HSA can be VERY beneficial. Look it up online."

I did look it up, and here's the deal:

An HSA is a savings account in which you can save money, pre-tax, to offset the deductible of a High-Deductible Health Plan (insurance). The money can be invested, and rolls over from year to year (unlike a Flexible Spending Account [FSA] in which unspent money is forfeited at year's end).

There are rules that set a minimum level of deductible for a plan that qualifies to link an HSA to (at this writing, a qualifying plan has at least an $1100 annual deductible for an individual, and maximum $5500 annual out-of-pocket expense for an individual - double those figures for a family plan.) The funds contributed to the HSA are not subject to income tax, but can only be used to pay for qualified medical expenses.

In addition (don't take this as authoritative or comprehensive) I'm told that funds unspent in such an account can be withdrawn tax-free (???) after a certain age, making this arrangement very similar to an IRA.

When you use the online insurance-quote services below, you will see some plans that have links to HSAs. Also, see HSA Insider or HealthDecisions.org

There are other plans: HRAs (Health Reimbursement Accounts) and FSAs (Flexible Spending Accounts) offered by some employers, but I won't go into them right now.


"I work 10 days a month as a firefighter/paramedic for the fire department … I have pretty good benefits."


From Kiplinger: Work with an insurance broker specializing in health insurance.

"Most health insurance brokers, who deal with several insurers all the time, know from experience which ones are more likely to accept people with certain conditions. In many cases, the broker can call the company's underwriter and ask questions about its criteria before submitting an application. Go to the National Association of Health Underwriters Web site for help finding a health insurance broker in your area. Ask for one who works with individuals; some just specialize in group coverage.

"If you have preexisting conditions, working with a broker can also be valuable because most brokers know how to strengthen your application. … The broker should also have advice on what to do if you still end up getting rejected. Thirty-three states have high-risk pools that guarantee coverage to people who have been rejected by private insurers. For more information on each state's high-risk pool, go to the National Association of State Comprehensive Health Insurance Plans Web site, and click on "states with pools."

The Georgetown University Health Policy Institute's state-specific guides for getting and keeping health insurance are also great resources. HIPAA says a private insurer cannot deny insurance or exclude coverage for pre-existing conditions if you had coverage for 18 months without a break, most recently with a group plan; have exhausted or are ineligible for COBRA; and are not eligible for a group or government-sponsored plan. Each state has rules for providing such coverage.


PRO-UNIVERSAL-HEALTHCARE:

"Not a single European (or Canadian) would raise these questions, because it is not possible for any of them to be brought to bankruptcy, forced to sell their homes or dramatically lower their living standard, forced to choose between food or medicine, or forced to forgo medical care, or to limit themselves to partial or inferior care, because they cannot afford the cost of health care.

"These countries recognize a universal right to health care independent of a citizen's income or employment. This right, like all rights, is a freedom, and one that Americans don't have. How come we are the only industrialized country in the capitalist world that does not?"


ANTI-UNIVERSAL-HEALTHCARE:

"We are fortunate to live in a state where they cannot refuse to sell you health insurance. In many other states they can deny a policy. I know people from other states who have established their permanent addresses in states where the law mandates that insurance cannot be denied.

"I recently bought a new policy about 2 years ago. My wife and I are in our 30's and pay 20% co-pay after a $1000 deductible - the policy costs $225 a month. In our absolute worst year, we paid $17,000 out of pocket, but did not lose the house. At the moment, Federal income tax laws let you deduct healthcare expenses over a certain percentage of your income.

"The 'savings plans' do help. Administrative expenses are usually about $150 a year, but a HSA can easily pay for itself many times over, especially if you don't have dental or eye care insurance.

"I buy from Canadian pharmacies and save a bundle.

"Don't be fooled about the Universal Health Care systems in some countries."

The writer goes on to cite very high out-of-pocket costs in countries with universal health care. 

Other arguments I've heard are that resources are limited (if you're diagnosed with cancer, you need radiation and chemo right away, not in 8 to 10 months) and that the quality of care suffers (and from the several views I've had of our government-run Veteran's Administration hospital system and family care in the military health care system, I'm sure the quality-of-care argument is very valid.)

In those countries, many people buy supplemental insurance to make up for the gaps in the national plan.

  affiliate_link


"I used to get my family health insurance through my local Arts Council's group plan for its members. When they discontinued that service, I contacted the marketing department of my existing HMO and found out that they offer small group rates for businesses that have two or more employees. So my wife immediately went on my payroll and I now purchase a family plan directly for my local HMO at rates that were less than I paid previously. 

"If you operate as a sole proprietor, that option may not work for you as you have no employees. My business operates as a 'subchapter S' corporation that now has two employees on payroll. Every state has its own insurance laws, and they make dramatic differences in the types, terms and rates that are offered in your state.

"In New Jersey, you need 2 or more people on the payroll. You can put your wife on as the other employee, but make sure that you give her a regular pay check. The insurance company has the right to ask for tax records showing that the group legitimately and strictly meets its criteria. They will sometimes do this on a major claim. I know one person that was denied a 20K claim because of this issue.

"Check with your local provider's marketing department regarding their small business plans."


"I trust in the Lord, and there's this plan where Christians share the medical costs of plan members…" 

No. Just no.

These "church plans" are far less expensive than traditional insurance, and are sold with compelling emotional appeals to your faith, instead of being sold on their benefits. 

Any time you see such a radical departure from time-tested fiscal practices, be suspicious … run away fast if it depends on appeals other than practical and conservative reliance on tried-and-true fiscal responsibility.

All of these "church plans" evade consumer protection laws by imposing restrictions (read "reasons to deny coverage"), restrictions that conventional insurance plans are forbidden by law (for good reason) to impose. They exclude coverage of preexisting conditions, recurring cancer, serious heart disease, psychiatric disorders or vision problems. In addition, you generally have to have your pastor certify your morality in writing (??!!) and you have to agree in writing that the plan has no obligation to pay your bills (!!??) but only to ask members to share your burden.

Most have violated their own promises and evaded their legal and ethical duties so badly that they have been sued for fraud, unfair trade practices, and more. “Unauthorized health plans operate in a regulatory vacuum," said a Montana watchdog. "There is no accountability, no oversight, and the people who participate have little to no protection. Unlike valid insurance companies… there is no safety net for members when it comes time to pay claims.” 

Don't risk your family's security. Don't be swayed by the rhetoric of salesmen who may show up (and be endorsed by) your church.

They come challenging you to trust God to watch over you, and other Christians to share each others' expenses in a shared-risk arrangement.

Let's quote chapter and verse to these salesmen (and that's what they are) and to the pastors who invite them into their sanctuaries):

"No one can serve two masters … you cannot serve both God and Money." Matthew 6:24

"You shall not put the lord your God to the test…" Deuteronomy 6:16

"Jesus said to him, "Again it is written, you shall not tempt the Lord your God." Matthew 4:7

And possibly the best text:

"Get thee behind me, Satan." Luke 4:8


"My solution: I have a wife with a day job, who supplies me with health insurance. I make more money than she does, but it is a team effort, she has a job, and I stay home waiting for the phone to ring."


"Eat healthy, food man didn't make. Drink pure water and plenty of it. Exercise. Get good sleep. Keep your nervous system tuned up via Chiropractic care. Stimulate the mind and keep it sharp. Laugh and encourage others to do the same. Avoid large quantities of alcohol. Avoid smoking & smoke filled rooms. Don't eat yellow snow. Take the money you would be spending on health care and invest it."

Ross says: "Yes, this is actually a real reply."  Then he says: "AAAAAAAARGH!"

Don't gamble your future against the chance that disaster won't strike.

See my notes on keeping your health. They're in the box at the bottom of this page.

I think they make sense.


"Unless you are very wealthy, doing without a health plan ("self insuring") is a poor option. A hospital stay can run hundreds of thousands of dollars, and longer stays with many post-hospitalization services (like home nursing care or therapy) can be a very fast way into bankruptcy."


"Most Americans think, "The company gives me a large portion of the cost of my Insurance." Companies do not GIVE anything. The sum they pay for your insurance and other benefits is one part of your TOTAL compensation, just as they don't GIVE you your salary - you earn it. It's all, in a very real sense, your money.

"The only thing companies have going for them is they are able to get "Group Rates". It would be great if IBM or SAM could offer that for members."


"Some ideas if your spouse is not employed:

"A high-deductible plan so that even though small bills are not paid, when the worst happens you can afford the best care.

"Group plans for two or more are great because in our country now you can't be turned down. But because of this rates are 20% more than if you insured just yourself. The biggest problem is qualifying: the other employee must be full time and you should pay (in our state) at minimum 25% of their costs, and some companies don't recognize a spouse as an employee.

"In severe cases, if you are very ill, some states have a guaranteed risk pool that accepts those that are declined by companies offering popular plans. This is most expensive. Pre-existing conditions sometimes have to wait for 6 months and maximum benefits are less than all other plans, but it offers some protection in the worst case.

"You should also know that premiums are tax deductible now for the self employed.


"Do you belong to any organizations? The Better Business Bureau, local Chamber of Congress? Certain college alumni organizations? You will get better benefits for less cost than if you try as an individual.

"Since my wife is a nurse I hear often of people who do not have insurance and are now selling their house and everything else they own to pay the bills. Some clients of hers pay $2000 a month for medications alone.

"Honestly, don't go without insurance. It really doesn't pay. Not only are you subject to viruses (think if you are a performer and exposed to other people), but also genetics. A lot of "normal" conditions (high blood pressure, etc) are hereditary.


"Here are three practical solutions currently in use by people I know personally:

"1. Check into becoming a substitute teacher in your local area. Many U.S. county school systems provide access to a full range of health and pension benefits to people who work as little as 30 days a year (or less). It's a great way to work when you're not booked, and it leaves your evenings and weekends free!

"2. One friend of mine found that it was fairly expensive to add himself to his wife's plan at her full-time job. Being relatively young and healthy, he has a $1,000-deductible Blue Cross/Blue Shield plan, and put $1,000 in a Medical Savings Account to cover the deductible. He pays less than $300/month.

"3. Check out the National Association for the Self-Employed at http://www.nase.org . Another friend has great coverage through this group, and has a daughter with special health problems - all covered for a reasonable monthly fee."


Here are some online resources to see quotes for buying your own insurance:

AARP, if you're an old codger like me.

E-Healthinsurance quotes.

Insweb

Affordable-Health-Coverage.com


Ross on
"Your Health (and how to keep it)"

You can't — not forever, anyway. In time, you will certainly become more frail than you are now … that's the destiny all of us face. But you CAN do something to keep your best health, your vigor, your independence and your happiness LONGER (barring calamities).

How?

Here are some principles you may want to consider, and they're all based on moderation. As Plutarch said, "'Know thyself and 'Nothing too much'; upon these all other precepts depend."

First, decide whose advice to listen to. You'll never stop the torrent of advice, from friends, from (largely irresponsible) media, from respected authorities. Of those sources, probably the worst choice is to listen to the ones who have something to sell you. Oprah and her 'celebrity pop medicine authors of the week' are not your friend.

Still, the advice from respected and responsible authorities is probably the hardest to sort out. So many factors affect which advice you should heed. Remember back a few years? "Eat red meat, you need the protein!" - "No, red meat is bad for you, eat fish!" - "No, there's mercury in fish, eat rice and beans" - "AAAARGH! NO CARBS!"

A short history of medicine: "Doctor, I have an earache…"

2000 BCE: "Here, eat this root."

1000 CE: "That root is heathen. Here, say this prayer."

1850 CE: "Prayer is superstition. Here, drink this potion."

1940 CE: "That potion is useless. Here, swallow one of my pills."

1985 CE: "That pill is ineffective. Here, take this scientifically-developed and rigorously tested antibiotic."

2008 CE: "That antibiotic isn't natural. Here, eat this root."

Author (and onetime physician) Michael Crichton has to say (his comments are about larger life issues but they apply here):

"1. Be cautious around anyone who even implies he has the answer. The real gunslingers always tried to avoid pulling their guns. Same with the real gurus. Anyway, nobody has the answer for you except you.

"2. Be cautious around anyone who creates proselytizing followers. In most cases, personal development is only temporarily associated with any particular group.

"3. Be cautious around anyone who seems interested in your money."

Eat fewer calories than you burn. Burn many calories doing something you enjoy (preferably something you love).

Banish denial and procrastination — they got me (Ross) fat, diabetic, fatter, unbelievably out of shape. How did it get that far? The same way many shocking evils happen: ONE DAY AT A TIME, until when I looked back at the damage done I saw a huge mountain to climb to return to healthy norms. True, "I can start tomorrow", but finally one day "tomorrow" arrived in the form of a stroke. I'm lucky to be alive, but I will never be able to run again, or walk on a lawn without a walker, or walk at all without a cane. And with the bucketful of pills I have to take daily, there are other consequences, and detailing them would be far too depressing. You don't want them - trust me.

Neither do you need any prescription medicines advertised on television - they wouldn't be spending all that ad money if they didn't stand to make big bucks by convincing you to beg your doctor for these more expensive meds instead of generic versions. For almost all advertised-to-the-consumer prescription meds, there are generic prescription medications that do the same job but cost you far less.

If you're tempted to turn to "alternative medicine," see this site and this site for some straight talk about chiropractors and other 'alternatives'. You're wasting your money and putting your health in irresponsible, unscientific hands. STICK WITH SCIENCE. Science may not have a 100% track record, but "herbal supplements," "Homeopathic remedies" and "alternative medicine" provide only anecdotal evidence to support thir claims. In general, if it's sold at GNC (General Nutrition Center) stores, or on television (with loads of disclaimers in teensy print that flashes by too fast to read) stay far away from it. 

A word to the wise: "Alternative medicine" pitchmen make three dangerous claims that undermine confidence in legitimate medicine:

(1) Quacks often claim that their theories and treatments are being suppressed by the medical establishment, or by drug companies, or by the government. These claims are always groundless, and you should consider such a claim a 100% certain sign of quackery. Nobody's trying to suppress anything. In fact, the first guy with a provable cure for cancer (or any of the other diseases the 'everybody's against me' charlatans claim to cure) will make literally billions of dollars. The world is not a pulp-fiction novel or Hollywood "conspiracy" thriller.

(2) Only multiple, controlled, rigorously-designed, peer-reviewed published trials and studies can demonstrate the effectiveness of a cure. Anecdotal reports ("it must be good, I took it and I got better") for a medicine or treatment are not meaningful.

(3) A product or treatment is surely spurious if it is available from only one doctor or clinic, or only in another country. If it really were a cure, it would be used worldwide by legitimate mainstream health care providers.

Quacks like to charge that "science doesn't have all the answers." Science doesn't claim to have all the answers. Science is a rational and disciplined process that can answer many questions, including whether a theory can be demonstrated as fact, and whether a medical treatment can be demonstrated to be both safe and effective.

 

Revised 3/9/2009

 

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