Does it make sense to drop health insurance?

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Epsilon Delta
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Re: Does it make sense to drop health insurance?

Post by Epsilon Delta » Wed Nov 29, 2017 1:49 pm

nisiprius wrote:
Wed Nov 29, 2017 12:46 pm
If you have sufficient assets that you can literally say that you have a spare $2 million that you do not need, have not dedicated (even mentally) to some other purpose, can earmark for medical costs (and not double-count by also earmarking it for another purpose), and can take it philosophically if your medical costs spend it down to zero, then it seems to me that you would be no worse off without health insurance, compared to a family without substantial assets, insured by a policy with a $1 million cap.
As I understand it you are using "no worse off" in a Pareto sense, meaning "no worse off in any way", and I think that is a bad way to look at it. It certainly highlights a difference in the way different people think about this. Some people fixate on reducing the risk of a medical expense disaster and ignore everything else.

There are a large number of low probability calamities. Having an extra $100,000 laying around mitigates a great many of them. So "Fred" with no medical insurance but $100,000 to deal with an arbitrary problem may be at lower overall risk than "Barney" with no money but $1,000,000 medical coverage. Even though Fred is clearly worse off in the case of a $500,000 illness. Now $100,000 might be the wrong number, but it is clearly less than the $2,000,000 you suggest earmarking solely for medical expenses. Even if you had the $2M you should not dedicate it to medical expenses. It would be sub-optimum to die with $2M in a medical fund because you couldn't otherwise afford a bus ticket out of a war zone.

delamer
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Re: Does it make sense to drop health insurance?

Post by delamer » Wed Nov 29, 2017 1:54 pm

SrGrumpy wrote:
Wed Nov 29, 2017 1:45 pm
^ Medical tourism is an option, as long as your intestines aren't splattered all over the place. People talk a lot about excellent Asian hospitals, but there are also options in many other countries, as diverse as Israel and New Zealand.

It is one thing to go to New Zealand for a knee replacement. It is another thing if you have breast cancer and need surgery and chemotherapy.

Hug401k
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Re: Does it make sense to drop health insurance?

Post by Hug401k » Wed Nov 29, 2017 2:07 pm

Could you move somewhere the rates are more reasonable? Like Canada? Kidding but not really on that Canada thing..they won't take just anyone but if you have significant assets..

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dm200
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Re: Does it make sense to drop health insurance?

Post by dm200 » Wed Nov 29, 2017 2:09 pm

IMO wrote:
Wed Nov 29, 2017 1:42 pm
Your post doesn't make sense, you say you are retired 20 yrs prior to Medicare eligibility, but then you're going to be working as a contractor for $120K. So 1st, I'd say you're not really retired by my definition. But putting that aside:

Contractors are paid more than employees in all situations that I have personally seen. Sometimes dramatically more doing the same job, but the caveat is that they are not getting benefits, and that typically includes some aspect of health insurance being covered by the employer. Thus a very realistic way at looking at your $120K is that you're not getting paid $120K, but probably more like $100K when comparing apples to apples. Like paying taxes, I think you have to accept that fact of being a contractor (life's not fair). On the other hand, you can shelter significantly more retirement income from taxes as a contractor (life's not fair).

Healthcare is extremely expensive. That should be obvious from the salaries you see from those in healthcare on this site :shock: Somebody has to pay that, and in the US it's a combination of private insurance, government funds, and some funds coming directly from the patient.

On one hand, you CAN probably just self insure and pay the penalty. On a typical year, it is unlikely that you'll have to pay much for some doctor visits here/there, and all those premiums can be saved up. You could seek out using medical tourism to pay much less for surgeries outside the US and save money that way for those planned type of events.

You're biggest risk is the unplanned events, such as those that cause hospitalizations, emergency surgeries, massively expensive pharmaceuticals costs, etc, where it will become apparent, healthcare is extremely expensive. Really just comes down to how much risk you want to take in life.
The other (big in my opinion) difference is that contractors have lower "job security" than employees.

EnjoyIt
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Re: Does it make sense to drop health insurance?

Post by EnjoyIt » Wed Nov 29, 2017 2:20 pm

LiterallyIronic wrote:
Wed Nov 29, 2017 1:22 pm

But, then again, I'm pretty jaded by health insurance because we had health insurance, including maternity coverage, and we still ended up paying the entire $12,000 bill for our baby being delivered earlier this year with insurance not chipping in a cent.

So, yeah, there does come a point where the premiums aren't worth it, but you need to figure out what that point is for your own circumstance.
I had a friend with a high deductible who paid the hospital in advance to have the baby and negotiated a rate in case of c-section. Ended up costing a fraction of the $12k you paid. I can't remember the exact figure, but I was amazed at how little it was to pay in advance.

Your experience is also what gets me. You spend thousands in health insurance premiums and when an issue comes up you spend thousands more. I have also seen rates with insurance actually higher than cash pay. The reason is that cash pay does not qualify for adding up the deductible while the higher insurance rate does. You sometimes even see this at pharmacies where a drug without insurance costs $10 and $40 with insurance. Insane.

I would agree that at some point saving up a quarter million and investing it in a CD or something else that is safe will provide much better returns than the overpriced health insurance we are paying today. Is $1300/month the right price point to self insure? I don't know. It isn't for me. I think I would pay the $1300 mainly because of the child. At $2500 or $3000/month I would strongly start considering being self insured.

Most medical expenses are expensive but usually well under your current yearly premium and deductible of $25k. Especially when you negotiate the rates afterwards. In todays environment you can always renew health insurance the following year if anyone develops a chronic condition and require insurance at that point. The big expenses that may occur are severe accidents, cancer therapy, or a severe infection landing the person in the ICU for several days.

Another interesting point is if you are holding lets say $250k in savings in case of medical expenses that money will be earning 1-2% interest instead of being invested earning 4-8% growth in the market (pre-inflation). A 6.24% return will equal your current monthly premium of $1300. Thinking of lost opportunity it really makes your effective 1300 expense lower if you plan on investing the $250k while paying insurance premiums. How much lower depends on future returns and how much you want to keep on the sidelines in case you need it.

book lover
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Re: Does it make sense to drop health insurance?

Post by book lover » Wed Nov 29, 2017 2:27 pm

Since you are self employed, have you been reducing your taxable income via a Solo 401 k plan? It makes much more sense to insure against a catastrophic financial event than to role the dice.
Last edited by book lover on Wed Nov 29, 2017 2:29 pm, edited 2 times in total.

iamlucky13
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Re: Does it make sense to drop health insurance?

Post by iamlucky13 » Wed Nov 29, 2017 2:28 pm

MP123 wrote:
Wed Nov 29, 2017 12:47 pm
But $25,600 would look like a bargain if you or someone in your family came down with a serious health problem. I don't really think you can self insure for healthcare unless you are very comfortable with writing a million dollar check with no hesitation. Pre-ACA that was often the cap on policies anyway. Of course most things would be less but you never know. Even leaving aside the really rare medical conditions you still have to think about car accidents, slip/fall, kids sports injuries, and so on. If you think the insurance premiums are bad just wait until you see the hospital bills...

So I'd say no don't drop it.
It's not $25,600.

It's $25,600 * (1-(1+r)^-n) / r, which for an early retiree needing 40+ years worth of savings, has a present value adjusted for inflation of $600,000 (nominal is over $1 million).

I'm not going to necessarily recommend dropping the insurance, but I definitely see why it would be tempting, especially if they are all in good health, and have a margin in their retirement savings.

It really does seem like the sort of situation a really catastrophic plan could exist for. If I had the amount of margin I'd be comfortable retiring early on, and could get something with a $100k deductible and with a high enough lifetime maximum benefit, priced somewhere in the ballpark term life insurance, I'd very seriously consider it.
delamer wrote:
Wed Nov 29, 2017 1:14 pm
As someone else mentioned, you are going to pay "retail" for any care you do receive if you go without insurance. Health insurance negotiate discounts with doctors, hospitals, labs, etc. for their enrollees.
Or else they give you a discount to reflect the cost savings of not having to deal with the insurance company.

Unfortunately, I don't know how that really works out in general. Nobody seems to be trying to collect detailed data on this, so we have very little information other than the near universal claim is that adding a middle man in the form of perhaps the only economic sector in this entire country less efficient than the federal government somehow reduces costs.

What I do know is that when I dropped COBRA coverage after getting laid off in the recession (Worst cases were low risk. Running out of money and ending up homeless with numerous health effects that go with that was a high risk), and got strep throat, the bill I received for my doctor's visit had a large discount (over 1/3, if I remember right) listed on it for paying the clinic directly instead of billing it to insurance. So non-insurance discounts are a real thing at least with some providers.

delamer
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Re: Does it make sense to drop health insurance?

Post by delamer » Wed Nov 29, 2017 2:44 pm

iamlucky13 wrote:
Wed Nov 29, 2017 2:28 pm
MP123 wrote:
Wed Nov 29, 2017 12:47 pm
But $25,600 would look like a bargain if you or someone in your family came down with a serious health problem. I don't really think you can self insure for healthcare unless you are very comfortable with writing a million dollar check with no hesitation. Pre-ACA that was often the cap on policies anyway. Of course most things would be less but you never know. Even leaving aside the really rare medical conditions you still have to think about car accidents, slip/fall, kids sports injuries, and so on. If you think the insurance premiums are bad just wait until you see the hospital bills...

So I'd say no don't drop it.
It's not $25,600.

It's $25,600 * (1-(1+r)^-n) / r, which for an early retiree needing 40+ years worth of savings, has a present value adjusted for inflation of $600,000 (nominal is over $1 million).

I'm not going to necessarily recommend dropping the insurance, but I definitely see why it would be tempting, especially if they are all in good health, and have a margin in their retirement savings.

It really does seem like the sort of situation a really catastrophic plan could exist for. If I had the amount of margin I'd be comfortable retiring early on, and could get something with a $100k deductible and with a high enough lifetime maximum benefit, priced somewhere in the ballpark term life insurance, I'd very seriously consider it.
delamer wrote:
Wed Nov 29, 2017 1:14 pm
As someone else mentioned, you are going to pay "retail" for any care you do receive if you go without insurance. Health insurance negotiate discounts with doctors, hospitals, labs, etc. for their enrollees.
Or else they give you a discount to reflect the cost savings of not having to deal with the insurance company.

Unfortunately, I don't know how that really works out in general. Nobody seems to be trying to collect detailed data on this, so we have very little information other than the near universal claim is that adding a middle man in the form of perhaps the only economic sector in this entire country less efficient than the federal government somehow reduces costs.

What I do know is that when I dropped COBRA coverage after getting laid off in the recession (Worst cases were low risk. Running out of money and ending up homeless with numerous health effects that go with that was a high risk), and got strep throat, the bill I received for my doctor's visit had a large discount (over 1/3, if I remember right) listed on it for paying the clinic directly instead of billing it to insurance. So non-insurance discounts are a real thing at least with some providers.
I take your point about the cash discounts. As you said, though, no one can predict how that will play out with any given provider for any given illness/condition. I would be concerned about being denied expensive treatments because of doubts about my ability to pay without insurance. Obviously, strep throat isn't the problem. A cancer diagnosis or required heart surgery is.

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flamesabers
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Re: Does it make sense to drop health insurance?

Post by flamesabers » Wed Nov 29, 2017 2:53 pm

fredflinstone wrote:
Wed Nov 29, 2017 12:45 pm
flamesabers wrote:
Wed Nov 29, 2017 12:37 pm
Unfortunately I have more questions then answers for your situation.

Have you looked at short-term health insurance as an alternative?

Does your wife work? If so, can she get access to health insurance or transfer to a company that offers health insurance?

How long will you be going without health insurance for you, your wife and your child?

Does any of you require ongoing care or prescriptions?
Great questions. No, we have not looked at short-term coverage as an alternative. Because I feel that premiums will only go higher from here, I view this as a long-term problem requiring a long-term solution.

My wife works, but she is currently an independent contractor. She cannot get health insurance for any of us.

We will not be eligible for Medicare for another 20 years or so. Perhaps my wife or I will work for a large firm (one that provides its employees health insurance) at some point before then, but I really doubt it. The other possibility is to deliberately lower our income to such an extent that we become eligible for free or subsidized health insurance. This is an option we are seriously considering. I guess we would have to move our assets in a way to minimize our interest and dividend income (i.e., short-term bonds rather than long-term bonds; growth stocks rather than dividend stocks).

We do not require any ongoing care or prescriptions of note.
Did you have health insurance prior to your retirement or semi-retirement since you're still working as a contractor :confused? The reason I ask is because I think it's becoming more and more common for people to continue working to keep their health insurance even if they're otherwise financially independent.

I think twenty years is a very long time to hope your family is not going to incur a major medical expenditure. Regardless if you're health-conscious and take extra good care of your body, there is still the danger of becoming seriously injured in a car accident or something. Even if a major hospital bill doesn't bankrupt you, your financial assets may be depleted to the point that retirement is no longer an option for you in the foreseeable future.

Unless you're completely comfortable with gambling on the chance you're not going to need health insurance, I recommend continuing to explore the other options to obtain health insurance. Seeing if you can restructure your assets to be eligible for various health insurance might be worth it.

jayk238
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Re: Does it make sense to drop health insurance?

Post by jayk238 » Wed Nov 29, 2017 2:54 pm

IMO wrote:
Wed Nov 29, 2017 1:42 pm


Healthcare is extremely expensive. That should be obvious from the salaries you see from those in healthcare on this site :shock: Somebody has to pay that, and in the US it's a combination of private insurance, government funds, and some funds coming directly from the patient.

I'm sorry but I have to disagree strongly with this statement. It drips with a certain amount of envy and is patently untrue. Healthcare costs are enormously expensive but not because of doctors incomes despite what people have you believe.

Doctors income constitute 8% of expenses at apprx 80billion in a 2.5 trillion economy.
If we cut off salaries for doctors and go to zero the healthcare industry would be 1.7 trillion dollars.

But thats not even the real point- cutting physician pay will not reduce the absurd increases in healthcare costs each year because physician incomes have not generally increased at the same rate costs have. The main driver of expenses in healthcare is the regulator/insurance model/hospital systems/profit driven behavior of these groups along with misalignment of regulations.

So while it might make someone not in the healthcare industry feel better or even cathartic to put our hardworking physicians down- the result will not fix OP's costs.

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Re: Does it make sense to drop health insurance?

Post by folkher0 » Wed Nov 29, 2017 2:56 pm

Few thoughts:

1. As you get older your health care expenses are likely to increase. Expecting your current expenditures to remain stable is probably naive.

2. You said a family of 3. You may be willing to role the dice with your own health care. Do you feel comfortable doing the same with your loved ones? What do they think of going without health insurance?

3. One of the good (and bad) things about health insurance is that it somewhat incentivizes the individual to seek timely care and not delay early screening/diagnosis. Do you want to self-pay for screening colonoscopies, mammograms, pap-smears, etc? If you are willing to self-pay, are you comfortable with the followup tests or surgeries that such recommended screening often entail? What if there are complications?

4. If you have enough money to retire early and seriously contemplate self-insurance, than $1300 a month doesn't sound like that much.

5. Are you as healthy as you presume to be? Are you sure?
Last edited by folkher0 on Wed Nov 29, 2017 3:02 pm, edited 1 time in total.

jayk238
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Re: Does it make sense to drop health insurance?

Post by jayk238 » Wed Nov 29, 2017 3:01 pm

I firmly believe that one should get appropriate insurance for their healthcare needs.

If everyone chose to not get insurance for their medical care the result would be even more expensive healthcare and a broken insurance model. Thus those who dont pay into it and then decide to get healthcare after a catastrophic result will only end up with even more expensive payments. To me this is a tragedy of the commons type deal. Everyone's looking out for themselves with limited resources and it will just result in worsening situation.

I cant speak for OPs problem specifically, Im not an expert of any sort in finance.
If OP has no chronic issues, like insulin dep diabetes, migranes, MI hx etc then I would strongly recommend he go for the cheapest insurance he can.

To entertain OPs question I looked up on the healthinsurance marketplace and entered a few things. These are not the same as OP ie age state, and their insurance cost but it does provide an interesting info:

I put age in the 50s for a married couple who do not smoke and an income of 120k. I looked for the cheapest plan which came to approx:
780 a month for 13k deductible and a max payout after of 14k by patient.

This is extremely reasonable for someone who is trying to protect their health.

The idea of saving, instead, millions in the bank in retirement just so they can avoid these costs makes no sense.

If OP is in 50s thats 15 years till retirement at a cost of 90k over that 15 year period if he has no medical costs otherwise. Even so it may add up to maybe 150k with additional NONcatastrophic issues- medications, seeing doctor - copays etc.

Im just surprised that people are even talking about forgoing insurance on a bogleheads forum and some are actually in agreement.

There seems to be some hyperbole here.
Last edited by jayk238 on Wed Nov 29, 2017 3:03 pm, edited 1 time in total.

letsgobobby
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Re: Does it make sense to drop health insurance?

Post by letsgobobby » Wed Nov 29, 2017 3:02 pm

fredflinstone wrote:
Wed Nov 29, 2017 1:18 pm
bottlecap wrote:
Wed Nov 29, 2017 1:10 pm
jayk238 wrote:
Wed Nov 29, 2017 1:06 pm
If you have an adverse outcome. Say a heart attack or cancer youre looking at 200k+ for those bills.

Once u have the acute phase over ur looking at the maintenance phase. Upwards of 20k a year.

This excludes medications easily upwards 50k for cancer meds.

Al for one uninsured pt.

Just my 2 cents.
Open enrollment starts every year.

JT
Great point. So if we develop a chronic, expensive condition that requires ongoing care, we can simply sign up for coverage the following November or whatever.
Under the current rules. Those could change.

I think there are three main risks to going naked.

1. Catastrophic medical expenses such as traumatic brain injury requiring long term therapy; cancer; etc.
2. Paying full retail price (which is an artifical and made up number) for medical services.
3. Not being eligible for insurance in the future because of a preexisting medical condition.

It is a real problem. Have you talked with an insurance broker about all the options available in your area? Are you eligible for a faith-based health care collective (those are not without their risks but they are much cheaper)?

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Christine_NM
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Re: Does it make sense to drop health insurance?

Post by Christine_NM » Wed Nov 29, 2017 3:13 pm

OP -

I don't see the important number for the policy you would be using -- what is the maximum out of pocket annual cost to you and your family, after which insurance pays everything?

If MOOP is 50k, for example, that is the most you would spend in any one year on healthcare. Compare that with the open-ended, undiscounted costs of having no insurance.

I have no idea how MOOPs run in the high deductible market. The MOOP on my Medicare Advantage plan is $1,500 per YEAR. For that I pay medicare plan b and d, plus $50/month premium.
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EnjoyIt
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Re: Does it make sense to drop health insurance?

Post by EnjoyIt » Wed Nov 29, 2017 3:18 pm

jayk238 wrote:
Wed Nov 29, 2017 3:01 pm
I firmly believe that one should get appropriate insurance for their healthcare needs.

If everyone chose to not get insurance for their medical care the result would be even more expensive healthcare and a broken insurance model. Thus those who dont pay into it and then decide to get healthcare after a catastrophic result will only end up with even more expensive payments. To me this is a tragedy of the commons type deal. Everyone's looking out for themselves with limited resources and it will just result in worsening situation.

I cant speak for OPs problem specifically, Im not an expert of any sort in finance.
If OP has no chronic issues, like insulin dep diabetes, migranes, MI hx etc then I would strongly recommend he go for the cheapest insurance he can.

To entertain OPs question I looked up on the healthinsurance marketplace and entered a few things. These are not the same as OP ie age state, and their insurance cost but it does provide an interesting info:

I put age in the 50s for a married couple who do not smoke and an income of 120k. I looked for the cheapest plan which came to approx:
780 a month for 13k deductible and a max payout after of 14k by patient.

This is extremely reasonable for someone who is trying to protect their health.

The idea of saving, instead, millions in the bank in retirement just so they can avoid these costs makes no sense.

If OP is in 50s thats 15 years till retirement at a cost of 90k over that 15 year period if he has no medical costs otherwise. Even so it may add up to maybe 150k with additional NONcatastrophic issues- medications, seeing doctor - copays etc.

Im just surprised that people are even talking about forgoing insurance on a bogleheads forum and some are actually in agreement.

There seems to be some hyperbole here.
Lets ignore your $780/month for the moment and go with the figures OP has because those appear real to OP. $1300/month is a lot. Despite that high number I personally would pay for insurance because the downside risk is too high for $15,600 per year payments. Considering that premiums continue to rise as they have, at some point the math may start to favor being self insured? Just out of curiosity at what point would you consider self insuring? What about $2500/month? Or $5k/month? At the end of the day we can not expect every person to buy health insurance for the sole purpose of propping up a system that may or may not be broken. Eventually at some price point people will be forced to think of themselves and will act accordingly which is what OP is doing. Again, insurance is supposed to be something you buy incase poop hits the fan. For me $15,600/yr although a lot, is not enough to take the risk on myself.

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celia
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Re: Does it make sense to drop health insurance?

Post by celia » Wed Nov 29, 2017 3:18 pm

bottlecap wrote:
Wed Nov 29, 2017 1:43 pm
fredflinstone wrote:
Wed Nov 29, 2017 1:35 pm
SrGrumpy wrote:
Wed Nov 29, 2017 1:33 pm
crystalbank wrote:
Wed Nov 29, 2017 1:14 pm
Like many posters already mentioned, hospitals likely won't give you the same discount when paying out of pocket ...
I don't think this is true.
There seems to be a difference of opinion on this point.
It will likely depend on the hospital/provider. Many offer up to 20% cash discounts even if you have insurance.
Our medical group says that the contract they have with some of the insurers prevents them from giving discounts to uninsured.

Did you notice the thought earlier that after the doctor/hospital sends the bill to the insurance company, the insurance company first adjusts the price to the contracted price, which may be 25% or 33% of the billed price. So that lower amount is all you have to pay if you have not yet met the deductible. That should be less than what the uninsured (with discounts) has to pay. Just think about this. If everyone who didn't have insurance ended up paying the same as those who have it, pretty soon everyone would stop buying it.

As far as the question as to why doctors and hospitals start by charging more than they will accept (at the contracted price), I have heard that each insurance company has a different payment agreement and that some insurance company, somewhere, is willing to pay that high amount. So it is just simpler to charge the highest amount and let each insurance company adjust the price.

As far as the OP, the health issues the family has experienced should be a warning that they may not be as healthy as they assume. The next "issue" could surface in ten years--or tomorrow.

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Artsdoctor
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Re: Does it make sense to drop health insurance?

Post by Artsdoctor » Wed Nov 29, 2017 3:31 pm

fredflinstone wrote:
Wed Nov 29, 2017 1:35 pm
SrGrumpy wrote:
Wed Nov 29, 2017 1:33 pm
crystalbank wrote:
Wed Nov 29, 2017 1:14 pm
Like many posters already mentioned, hospitals likely won't give you the same discount when paying out of pocket ...
I don't think this is true.
There seems to be a difference of opinion on this point.
Several things.

Before you make any decisions, try to involve your whole family in the decision-making process. Any untoward financial issues in the future that would occur because you have no health insurance are likely to impact everyone.

Regarding negotiating your hospital bills if you have no insurance, this would be dependent on the hospital. However, "cash packages" are commonly negotiated at our hospital (a lot of people come for surgery from different countries, for example) and if one is uninsured, there will always be negotiations to decrease the billed rate; whether or not this is comparable to an insurer's negotiated rate would be dependent on the patient's ability to pay among other things.

You may have a more limited access to care without insurance, if that matters to you. Although a routine doctor's visit can easily be paid with cash, if you require elective surgery, you'll have to negotiate a price. But the reality of the situation is one which would be very unpleasant: if you have a chronic illness which requires care, you will be endlessly negotiating prices. This may seem manageable while we're sitting here in good health, but the dynamic changes remarkably when you're very ill. Don't rule out two people getting sick at similar times--it happens.

I don't have the data to back this up, but I think you'd be hard-pressed to find someone who's had a significant illness in the past you would recommend going without coverage. Usually, the people who drop coverage have never been sick and are sometimes operating under the illusion that if you exercise and eat well, you won't get sick. That sort of thought process is magical thinking.
Last edited by Artsdoctor on Wed Nov 29, 2017 3:34 pm, edited 3 times in total.

IMO
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Re: Does it make sense to drop health insurance?

Post by IMO » Wed Nov 29, 2017 3:32 pm

jayk238 wrote:
Wed Nov 29, 2017 2:54 pm
IMO wrote:
Wed Nov 29, 2017 1:42 pm


Healthcare is extremely expensive. That should be obvious from the salaries you see from those in healthcare on this site :shock: Somebody has to pay that, and in the US it's a combination of private insurance, government funds, and some funds coming directly from the patient.

I'm sorry but I have to disagree strongly with this statement. It drips with a certain amount of envy and is patently untrue. Healthcare costs are enormously expensive but not because of doctors incomes despite what people have you believe.

Doctors income constitute 8% of expenses at apprx 80billion in a 2.5 trillion economy.
If we cut off salaries for doctors and go to zero the healthcare industry would be 1.7 trillion dollars.

But thats not even the real point- cutting physician pay will not reduce the absurd increases in healthcare costs each year because physician incomes have not generally increased at the same rate costs have. The main driver of expenses in healthcare is the regulator/insurance model/hospital systems/profit driven behavior of these groups along with misalignment of regulations.

So while it might make someone not in the healthcare industry feel better or even cathartic to put our hardworking physicians down- the result will not fix OP's costs.
Wow statement wasn't trying to put down hardworking physicians or any other hardworking healthcare workers down. You'd be presuming myself/family/relatives/friends/colleagues aren't or weren't in healthcare (and presuming that I was opposed to those salaries). Point being, healthcare is expensive period, not worth debating on how/why it's expensive, it's just expensive. OP has to decide if he wants to self insure and take that risk.
Last edited by IMO on Wed Nov 29, 2017 3:44 pm, edited 2 times in total.

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Artsdoctor
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Re: Does it make sense to drop health insurance?

Post by Artsdoctor » Wed Nov 29, 2017 3:36 pm

^ Regarding the healthcare expense question, the biggest fees the uninsured patient will be paying will be hospital, lab, imaging, and treatment modalities. The physician fees will not be what breaks you in the end.

aprilcpa
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Re: Does it make sense to drop health insurance?

Post by aprilcpa » Wed Nov 29, 2017 3:37 pm

Your scenario is exactly why we went to a health sharing plan (we use Medishare). We have been very happy with it!

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Re: Does it make sense to drop health insurance?

Post by SrGrumpy » Wed Nov 29, 2017 3:42 pm

Artsdoctor wrote:
Wed Nov 29, 2017 3:36 pm
^ Regarding the healthcare expense question, the biggest fees the uninsured patient will be paying will be hospital, lab, imaging, and treatment modalities. The physician fees will not be what breaks you in the end.
True about physician fees. My wife is about to get a displaced fibula repaired for a cash rate - about $8,000. Doc said his fee accounts for about $1,900, and one of the bigger chunks is the cost of the screws and plate - though it may be all relative.

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Re: Does it make sense to drop health insurance?

Post by Chip » Wed Nov 29, 2017 3:46 pm

fredflinstone wrote:
Wed Nov 29, 2017 1:35 pm
SrGrumpy wrote:
Wed Nov 29, 2017 1:33 pm
crystalbank wrote:
Wed Nov 29, 2017 1:14 pm
Like many posters already mentioned, hospitals likely won't give you the same discount when paying out of pocket ...
I don't think this is true.
There seems to be a difference of opinion on this point.
Put me in the camp of "can't negotiate to the insurance company price". First, try actually getting a price. Then try to get them to put it in writing. Then see if it actually gets billed that way. My bet is that none of those things happen without hours and hours of time spent, if at all.

Here's a recent example. I had very minor elective surgery, but it required anesthesia. It was done in a hospital. The actual surgery probably took 10 minutes. Just the hospital facility charge was $11,000. That doesn't include the surgeon's fee or the anesthesiologist's fee. The insurance company "price" was $2,600, a 76% discount. I'm not a bad negotiator but I seriously doubt I would have targeted that price as my endpoint.

Someone here pointed out Steven Brill's 2013 Time magazine article "Bitter Pill: Why Medical Bills are Killing Us". It's a fascinating and disgusting read. And well worth the time spent reading it. Here's one source for it: https://www.uta.edu/faculty/story/2311/ ... dGreed.pdf

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Re: Does it make sense to drop health insurance?

Post by SrGrumpy » Wed Nov 29, 2017 3:50 pm

Chip wrote:
Wed Nov 29, 2017 3:46 pm
I had very minor elective surgery, but it required anesthesia. It was done in a hospital.
Big mistake.

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Re: Does it make sense to drop health insurance?

Post by jayk238 » Wed Nov 29, 2017 3:50 pm

IMO wrote:
Wed Nov 29, 2017 3:32 pm

Wow statement wasn't trying to put down hardworking physicians or any other hardworking healthcare workers down. You'd be presuming myself/family/relatives/friends/colleagues aren't or weren't in healthcare (and presuming that I was opposed to those salaries). Point being, healthcare is expensive period, not worth debating on how/why it's expensive, it's just expensive. OP has to decide if he wants to self insure and take that risk.
Yes but your image of the bug-eyes is listed as 'shocked.' Thats expressly an emotion. A shocked emotion at the perceived high incomes of physicians.

the clarification and your explanation means my previous comment would not apply in this context.

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Re: Does it make sense to drop health insurance?

Post by Chip » Wed Nov 29, 2017 4:02 pm

SrGrumpy wrote:
Wed Nov 29, 2017 3:50 pm
Big mistake.
Well, that was where the surgeon I selected was going to do the procedure. Do you think I should have asked him to do it out in the parking lot?

I've had other procedures done in "surgery centers". Charges were at a similar level.

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Re: Does it make sense to drop health insurance?

Post by SrGrumpy » Wed Nov 29, 2017 4:09 pm

Chip wrote:
Wed Nov 29, 2017 4:02 pm
SrGrumpy wrote:
Wed Nov 29, 2017 3:50 pm
Big mistake.
Well, that was where the surgeon I selected was going to do the procedure. Do you think I should have asked him to do it out in the parking lot?

I've had other procedures done in "surgery centers". Charges were at a similar level.
In my cases (colonoscopy, nasal septoplasty, wife's fibula), the surgery centers came out considerably cheaper than the hospitals, but maybe it all depends. For a 10-minute procedure, I would ask about a parking lot option.

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Re: Does it make sense to drop health insurance?

Post by rkhusky » Wed Nov 29, 2017 4:13 pm

aprilcpa wrote:
Wed Nov 29, 2017 3:37 pm
Your scenario is exactly why we went to a health sharing plan (we use Medishare). We have been very happy with it!
Sounds like something the OP should look into. Or moving to an area with more insurance competition. Or joining a trade group that can enable less expensive insurance. Or just accepting the fact that you may lose your assets and have to go on the public dole if something really bad happens.

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Re: Does it make sense to drop health insurance?

Post by IMO » Wed Nov 29, 2017 4:18 pm

jayk238 wrote:
Wed Nov 29, 2017 3:50 pm
IMO wrote:
Wed Nov 29, 2017 3:32 pm

Wow statement wasn't trying to put down hardworking physicians or any other hardworking healthcare workers down. You'd be presuming myself/family/relatives/friends/colleagues aren't or weren't in healthcare (and presuming that I was opposed to those salaries). Point being, healthcare is expensive period, not worth debating on how/why it's expensive, it's just expensive. OP has to decide if he wants to self insure and take that risk.
Yes but your image of the bug-eyes is listed as 'shocked.' Thats expressly an emotion. A shocked emotion at the perceived high incomes of physicians.

the clarification and your explanation means my previous comment would not apply in this context.
If people 1st read the great link posted above:
https://www.uta.edu/faculty/story/2311/ ... dGreed.pdf

If I say, of course medical care is expensive, have you seen to salaries of CEO's with healthcare? :shock: Hopefully I'm not offending any CEO's on this site. :wink:

Disdain for healthcare providers/salaries? Try empathy and understanding the burnout. :wink:

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Re: Does it make sense to drop health insurance?

Post by nisiprius » Wed Nov 29, 2017 4:23 pm

delamer wrote:
Wed Nov 29, 2017 1:22 pm
It is my understanding that doctors are not legally required to treat either Medicaid or Medicare patients,
Yes, according to Medicare.
Make sure your doctor, provider, or supplier accepts assignment. Most doctors, providers, and suppliers accept assignment, but you should always check to make sure. Participating providers have signed an agreement to accept assignment for all Medicare-covered services.

Non-participating providers haven't signed an agreement to accept assignment for all Medicare-covered services, but they can still choose to accept assignment for individual services. These providers are called "non-participating."

A private contract is a written agreement between you and a doctor or other health care provider who has decided not to provide services to anyone through Medicare.
delamer wrote:...and that many do not because of the low reimbursement rates.
I've heard this too, but so far I haven't found a doctor who didn't accept assignment. I've heard that they dislike the low reimbursement rates, but they like collecting from Medicare, which is said to be faster and easier than from insurers. In any case, I have a challenge for you: see if you can find any doctors that you go to, or think you might go to, who do not accept Medicare assignment. You can look them up here. Start with the ones least likely to accept it, try a few, then report your results.
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Re: Does it make sense to drop health insurance?

Post by dm200 » Wed Nov 29, 2017 4:28 pm

SrGrumpy wrote:
Wed Nov 29, 2017 3:50 pm
Chip wrote:
Wed Nov 29, 2017 3:46 pm
I had very minor elective surgery, but it required anesthesia. It was done in a hospital.
Big mistake.
Why was this a "Big mistake"??

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Re: Does it make sense to drop health insurance?

Post by knpstr » Wed Nov 29, 2017 4:31 pm

a few years from Medicare, my parents pay ~$1,500/mo in premiums for a "bronze" plan.

I think the potential risk is still too great to go without.

You're saving $12,600 (premiums minus penalty) and could easily rack up way more than that amount amount with an ambulance trip, to the hospital for a surgery, where you stay for a few days.
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Re: Does it make sense to drop health insurance?

Post by SrGrumpy » Wed Nov 29, 2017 4:33 pm

dm200 wrote:
Wed Nov 29, 2017 4:28 pm
SrGrumpy wrote:
Wed Nov 29, 2017 3:50 pm
Chip wrote:
Wed Nov 29, 2017 3:46 pm
I had very minor elective surgery, but it required anesthesia. It was done in a hospital.
Big mistake.
Why was this a "Big mistake"??
Surgery centers are generally much cheaper. YMMV, etc.

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Re: Does it make sense to drop health insurance?

Post by dm200 » Wed Nov 29, 2017 4:33 pm

nisiprius wrote:
Wed Nov 29, 2017 4:23 pm
delamer wrote:
Wed Nov 29, 2017 1:22 pm
It is my understanding that doctors are not legally required to treat either Medicaid or Medicare patients,
Yes, according to Medicare.
Make sure your doctor, provider, or supplier accepts assignment. Most doctors, providers, and suppliers accept assignment, but you should always check to make sure. Participating providers have signed an agreement to accept assignment for all Medicare-covered services.
Non-participating providers haven't signed an agreement to accept assignment for all Medicare-covered services, but they can still choose to accept assignment for individual services. These providers are called "non-participating."
A private contract is a written agreement between you and a doctor or other health care provider who has decided not to provide services to anyone through Medicare.
delamer wrote:...and that many do not because of the low reimbursement rates.
I've heard this too, but so far I haven't found a doctor who didn't accept assignment. I've heard that they dislike the low reimbursement rates, but they like collecting from Medicare, which is said to be faster and easier than from insurers. In any case, I have a challenge for you: see if you can find any doctors that you go to, or think you might go to, who do not accept Medicare assignment. You can look them up here. Start with the ones least likely to accept it, try a few, then report your results.
In this area (Washington DC), a great many Primary Care Physicians do not accept new Medicare patients. Before being on medicare and going to a Kaiser Medicare plan, our primary care group had signs up that they would not accept new Medicare patients but could see existing patients who go on Medicare. I know several folks who, when their primary care physician stopped practicing, had a real challenge to find a Primary care physician they were happy with.

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Re: Does it make sense to drop health insurance?

Post by dm200 » Wed Nov 29, 2017 4:35 pm

SrGrumpy wrote:
Wed Nov 29, 2017 4:33 pm
dm200 wrote:
Wed Nov 29, 2017 4:28 pm
SrGrumpy wrote:
Wed Nov 29, 2017 3:50 pm
Chip wrote:
Wed Nov 29, 2017 3:46 pm
I had very minor elective surgery, but it required anesthesia. It was done in a hospital.
Big mistake.
Why was this a "Big mistake"??
Surgery centers are generally much cheaper. YMMV, etc.
OK - see what you mean. If you have a surgeon, though, as I understand, that surgeon may only deal with a hospital.

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Re: Does it make sense to drop health insurance?

Post by SrGrumpy » Wed Nov 29, 2017 4:44 pm

dm200 wrote:
Wed Nov 29, 2017 4:35 pm
SrGrumpy wrote:
Wed Nov 29, 2017 4:33 pm
dm200 wrote:
Wed Nov 29, 2017 4:28 pm
SrGrumpy wrote:
Wed Nov 29, 2017 3:50 pm
Chip wrote:
Wed Nov 29, 2017 3:46 pm
I had very minor elective surgery, but it required anesthesia. It was done in a hospital.
Big mistake.
Why was this a "Big mistake"??
Surgery centers are generally much cheaper. YMMV, etc.
OK - see what you mean. If you have a surgeon, though, as I understand, that surgeon may only deal with a hospital.
Yeah, depends. But one should ask. I'm not privy to every doctor's employment contract.

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Re: Does it make sense to drop health insurance?

Post by jalbert » Wed Nov 29, 2017 4:48 pm

fredflinstone wrote:
Wed Nov 29, 2017 12:24 pm
I recently retired from the quarry (early retirement). The wife (Wilma) and I are too young to go on Medicare so we buy health insurance on our own through the individual market. In our town of Bedrock, premiums are going up big-time in 2018. We will have to pay more than $1,300 per month for our family of three (me, Wilma, and Pebbles). That's for a plan with a family deductible of about $10,000. So we would pay $25,600 out of pocket ($15,600 in premiums plus a $10,000 deductible) before we would receive even a penny from the insurer.

Let's say I work as an independent contractor and our income next year will be $120,000. If we go without health insurance, we will have to pay a penalty to the federal government of $3,000.

We have substantial assets and of course I worry about a very high cost health care expense that would wipe out those assets. That said, there surely is a point at which premiums become so high that even a risk-averse person would prefer to go without coverage. For example, even a highly risk-averse person would not pay $100,000 per month for a health insurance plan since surely it would be more sensible in that case to simply self-insure.

My question is: Is my family at the point where it is rational to forego coverage?

Obviously, I am taking some liberty with the names of my family members and other details, but the numbers are roughly correct and this is a serious question.

Thoughts?
You are making the common mistake of viewing health insurance as prepaid healthcare instead of as insurance. When considering your expected value of uncertain outcomes, you also have to include tail risk events like a $5 million hospitalization in the analysis. A traffic ticket for driving without car liability insurance is probably cheaper than the liability ibsurance premium, but I assume you insure your cars/drivers nonetheless.

Also many policies have individual out-of-pocket maximums in addition to family maximums.
Index fund investor since 1987.

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Re: Does it make sense to drop health insurance?

Post by Sandtrap » Wed Nov 29, 2017 4:50 pm

Fred.
Health insurance is "insurance". God forbid that something serious should happen to "Bam Bam". Barney backing out of his garage and rolling over Wilma's foot but it get's infected and requires long term care. Or something should "befell" you at the quarry. DinoExcavators can be tricky.
Health insurance is for the "worst case scenario". If you have to keep premiums down, you can raise the deductibles.
Yaba Dabba Don't drop health insurance. . . .

j :D

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Re: Does it make sense to drop health insurance?

Post by jayk238 » Wed Nov 29, 2017 4:59 pm

Haha!
Wish I could like a comment

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Re: Does it make sense to drop health insurance?

Post by flamesabers » Wed Nov 29, 2017 5:05 pm

Sandtrap wrote:
Wed Nov 29, 2017 4:50 pm
If you have to keep premiums down, you can raise the deductibles.
Isn't there limits as to how high the deductibles can be, especially if the OP doesn't have a wide selection of insurance in his area? The deductible for Fred's policy is already $10k. Are there health insurance plans that offer an even higher deductible? :?

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Re: Does it make sense to drop health insurance?

Post by Sandtrap » Wed Nov 29, 2017 5:12 pm

flamesabers wrote:
Wed Nov 29, 2017 5:05 pm
Sandtrap wrote:
Wed Nov 29, 2017 4:50 pm
If you have to keep premiums down, you can raise the deductibles.
Isn't there limits as to how high the deductibles can be, especially if the OP doesn't have a wide selection of insurance in his area? The deductible for Fred's policy is already $10k. Are there health insurance plans that offer an even higher deductible? :?
ACA in our area was between Gold, Silver, Bronze, with various deductibles. Ours (Silver) was over 10k. Might be different in Bedrock.

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Re: Does it make sense to drop health insurance?

Post by Katietsu » Wed Nov 29, 2017 5:14 pm

Our insurance is through a large employer self insured plan. The cost for each employee each month is paid by a combination of the employee and their cost center. We have a family plan a high deductible plan, a little less than the OP’s option, which requires us to stay in a network and still has a 70% copay after the deductible before reaching OOP max. The cost charged per family is over $1300 a month. In other words, this is a very realistic number for the actual cost to provide care. It does not seem to be a number artificially inflated by the vagaries of the current insurance system.

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Re: Does it make sense to drop health insurance?

Post by michaeljc70 » Wed Nov 29, 2017 5:23 pm

All these comments everywhere about self-insuring are a joke to me. My Grandfather had heart surgery last year. It was over $500k. I don't think people know what things really cost. A broken bone with a trip to the er, surgery and therapy could be $50k+. If you get a chronic condition, it could cost 7 figures. Imagine if you need dialysis 3 times a week (like a family member did).

If you stop working (really stop, not contracting), will your income be low enough to get an ACA subsidy?

Unfortunately, I don't believe catastrophic policies are legal anymore (or at least you'd be subject to the penalty). I think the deductibles and OOP and a lot of plans now are what used to be considered catastrophic 15 years ago. If they sold a policy with a $50k deductible for a minimal cost, that would be ideal for some.

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Re: Does it make sense to drop health insurance?

Post by flamesabers » Wed Nov 29, 2017 5:30 pm

michaeljc70 wrote:
Wed Nov 29, 2017 5:23 pm
Unfortunately, I don't believe catastrophic policies are legal anymore (or at least you'd be subject to the penalty). I think the deductibles and OOP and a lot of plans now are what used to be considered catastrophic 15 years ago. If they sold a policy with a $50k deductible for a minimal cost, that would be ideal for some.
Catastrophic policies are still legal, but OP would have to meet the hardship /affordability exemption.

Per healthcare.gov:
Who can buy a Catastrophic plan

Only the following people are eligible:

People under 30
People of any age with a hardship exemption or affordability exemption (based on Marketplace or job-based insurance being unaffordable)
Oddly enough, the highest deductible for a catastrophic plan is less then Fred's current policy:
For 2017, the deductible for all Catastrophic plans is $7,150. After you spend that much, your insurance company pays for all covered services, with no copayment or coinsurance.
https://www.healthcare.gov/choose-a-pla ... ategories/

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Re: Does it make sense to drop health insurance?

Post by dbr » Wed Nov 29, 2017 5:51 pm

I have never, ever heard of a situation where one should not have health insurance even for a day. Even dental insurance is a good idea to avoid being gouged by the fictitious "regular" cost. This is nothing like co-insuring collision damage to your vehicle or some other transaction that is not conducted in Wonderland.

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Re: Does it make sense to drop health insurance?

Post by denovo » Wed Nov 29, 2017 6:01 pm

fredflinstone wrote:
Wed Nov 29, 2017 1:27 pm
Just a quick note to thank everyone for their thoughts. There is an incredible depth of knowledge on this site.

Do you have a million dollars that you are willing to set aside and lose because of health care expenses? If no, stay insured.
Last edited by denovo on Wed Nov 29, 2017 6:06 pm, edited 1 time in total.
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Re: Does it make sense to drop health insurance?

Post by fredflinstone » Wed Nov 29, 2017 6:03 pm

Sandtrap wrote:
Wed Nov 29, 2017 4:50 pm
Fred.
Health insurance is "insurance". God forbid that something serious should happen to "Bam Bam". Barney backing out of his garage and rolling over Wilma's foot but it get's infected and requires long term care. Or something should "befell" you at the quarry. DinoExcavators can be tricky.
Health insurance is for the "worst case scenario". If you have to keep premiums down, you can raise the deductibles.
Yaba Dabba Don't drop health insurance. . . .

j :D
important clarification: Bam Bam is Barney's son, not mine.

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Re: Does it make sense to drop health insurance?

Post by JBTX » Wed Nov 29, 2017 6:04 pm

If the OP has “substantial” assets then those insurance rates should be affordable.

Having insurance gets you discounted rates even when paying out of pocket. While you can likely get competitive cash discounts at a doctor visit, at a hospital you will be charged a price that is grossly inflated by “the chargemaster”. The rates are multiples higher than what you would pay with insurance. Google
“Chargemaster” and “hospital”

https://www.uta.edu/faculty/story/2311/ ... dGreed.pdf
Last edited by JBTX on Wed Nov 29, 2017 6:06 pm, edited 1 time in total.

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Re: Does it make sense to drop health insurance?

Post by fredflinstone » Wed Nov 29, 2017 6:05 pm

flamesabers wrote:
Wed Nov 29, 2017 5:30 pm
michaeljc70 wrote:
Wed Nov 29, 2017 5:23 pm
Unfortunately, I don't believe catastrophic policies are legal anymore (or at least you'd be subject to the penalty). I think the deductibles and OOP and a lot of plans now are what used to be considered catastrophic 15 years ago. If they sold a policy with a $50k deductible for a minimal cost, that would be ideal for some.
Catastrophic policies are still legal, but OP would have to meet the hardship /affordability exemption.

Per healthcare.gov:
Who can buy a Catastrophic plan

Only the following people are eligible:

People under 30
People of any age with a hardship exemption or affordability exemption (based on Marketplace or job-based insurance being unaffordable)
Oddly enough, the highest deductible for a catastrophic plan is less then Fred's current policy:
For 2017, the deductible for all Catastrophic plans is $7,150. After you spend that much, your insurance company pays for all covered services, with no copayment or coinsurance.
https://www.healthcare.gov/choose-a-pla ... ategories/
We do not buy coverage through healthcare.gov. Bedrock has its own marketplace.

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Re: Does it make sense to drop health insurance?

Post by Sandtrap » Wed Nov 29, 2017 6:05 pm

fredflinstone wrote:
Wed Nov 29, 2017 6:03 pm
Sandtrap wrote:
Wed Nov 29, 2017 4:50 pm
Fred.
Health insurance is "insurance". God forbid that something serious should happen to "Bam Bam". Barney backing out of his garage and rolling over Wilma's foot but it get's infected and requires long term care. Or something should "befell" you at the quarry. DinoExcavators can be tricky.
Health insurance is for the "worst case scenario". If you have to keep premiums down, you can raise the deductibles.
Yaba Dabba Don't drop health insurance. . . .

j :D
important clarification: Bam Bam is Barney's son, not mine.
Oops. Apologies.
I thought they were dating though. . . .

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Re: Does it make sense to drop health insurance?

Post by michaeljc70 » Wed Nov 29, 2017 6:05 pm

flamesabers wrote:
Wed Nov 29, 2017 5:30 pm
michaeljc70 wrote:
Wed Nov 29, 2017 5:23 pm
Unfortunately, I don't believe catastrophic policies are legal anymore (or at least you'd be subject to the penalty). I think the deductibles and OOP and a lot of plans now are what used to be considered catastrophic 15 years ago. If they sold a policy with a $50k deductible for a minimal cost, that would be ideal for some.
Catastrophic policies are still legal, but OP would have to meet the hardship /affordability exemption.

Per healthcare.gov:
Who can buy a Catastrophic plan

Only the following people are eligible:

People under 30
People of any age with a hardship exemption or affordability exemption (based on Marketplace or job-based insurance being unaffordable)
Oddly enough, the highest deductible for a catastrophic plan is less then Fred's current policy:
For 2017, the deductible for all Catastrophic plans is $7,150. After you spend that much, your insurance company pays for all covered services, with no copayment or coinsurance.
https://www.healthcare.gov/choose-a-pla ... ategories/
The OP has work income of $120k plus (presumably) investment income so they aren't going to be eligible for an exemption.

If a "catastrophic" plan has a deductible less than my bronze plan, it isn't really catastrophic and will probably cost the same or more money. It says "catastrophic" plans include all essential health benefits (after deductible).

Locked