Going bare on insurance...

[SecondCor521]

I am seriously considering going mostly bare on insurance.

I would keep auto coverage because (a) it is required by law in my state, (b) a wreck in my car is the most likely way I'm going to incur liability. I would also keep homeowner's insurance when required by my mortgage lender. And I would keep life insurance as needed until my nest egg is bigger and my kids are older.

But I am considering skipping everything else, in particular umbrella, long-term care, dental, and...gulp...health insurance.

Advantages:

1. *On average*, I am statistically likely to come out ahead because I don't have to pay the overhead/profit of the insurance companies.
2. No need to stress out about what insurance will pay, whether my doctor is covered, waiting for reimbursement, what decision to make at open-enrollment, etc.
3. I could (in theory) be investing my premiums into long term investments and make money on the time difference between when I would have paid my premiums and when I would have to pay for medical care.
4. I would be more likely to take care of myself because I wouldn't have a safety net.
5. If things worked out, I could perhaps persuade my doctors and hospitals to accept a cash paid right now no hassle discount. I know some doctors are offering this anyway.

Disadvantages:

1. I may "lose the bet" and lose everything I own.
2. I may lose my life or shorten it if I avoid seeking preemptive medical care when necessary.
3. I wouldn't get the bargaining power of the group insurance companies.

OK, go ahead and talk me out of it / decry my extreme idiocy / congratulate me on my out-of-box thinking and brave frontiersmanship. I'm listening.

2Cor521

 

[lets-retire]

From what I've seen, routine medical exams and procedures are not too expensive. It is only when you get into the exotic or long term things that the bills start to add up.

 

[2B]

You aren't going bare. You are keeping the biggies -- home and auto. Medical is one you should reconsider but you can save a bundle going with a high deductible. If your health is good, you can get a $5000 deductible for very little -- depends on age -- plus you get lower costs at the doctors and pharmacies because most have some sort of PPO feature. That's a biggie you should reconsider. The umbrella is only a factor if you have significant assets to protect.

 

[unclemick]

Wonderful - I did exactly that for 12 years - no insurance and ER or insurance and back to work to afford it.

Now - a couple of pesky details. I was single so if my porfolio was totally wiped out including the house - our financial affairs were arranged  so she(da SO) could survive on her portfolio - and her heath insurance came with her small union pension. My live at home Mom's affairs were also set up so me and my portfolio could go proof.

It's a big gamble - I had no trouble sleeping at night - BUT I don't recommend it for anyone else either.

BTW - insurance on a fish camp over water is a non-starter.

heh heh heh heh - remember the Clint Eastwood movie -'do ya feel lucky----' eh?

BTW - the house did go poof - Katrina. And after 12 years of cheap bastardhood - my portfolio could afford 5k deduct BC/BS in MO and a new house with mortgage. I don't think the 90's market will repeat for a while.

 

[REWahoo]

What 2B said...

At age 37 you should be able to get a high deductible ($5k) health insurance policy relatively cheap. Don't leave home (or stay home) without it.

 

[Tadpole]

I agree with REWahoo!

You are not safe from a bad driver just because you are healthy. Make sure you have coverage for the big ticket scenario.

 

[Zathras]

I concur with the others regarding medical. Keep it but up the deductable to max. Much cheaper and you are covered in case you end up getting hit hard.

Personally I can't imagine what that would be like as I am medically behind the eight ball with maintainance payments. Would be nice to be average or above average in that department

The umbrella policies are usually fairly cheap and will cover large liabilities so I am curious about the thinking on that one.

 

[Tadpole]

The umbrella policies are usually fairly cheap and will cover large liabilities so I am curious about the thinking on that one.

I admit to being quite ignorant of umbrella policies too. I have been wondering what keeps someone from sueing for what their lawyer knows the umbrella is worth plus what you are worth too. Don't they usually try to go for it all?

 

[brewer12345]

I admit to being quite ignorant of umbrella policies too. I have been wondering what keeps someone from sueing for what their lawyer knows the umbrella is worth plus what you are worth too. Don't they usually try to go for it all?

Heh, with an umbrella you cover the limit of 95+% of all possible suits against you. Plus you can bet that if the insurance company is on the hook for millions, they will put their best lawyers on the case.

 

[haha]

I admit to being quite ignorant of umbrella policies too. I have been wondering what keeps someone from sueing for what their lawyer knows the umbrella is worth plus what you are worth too. Don't they usually try to go for it all?

Trying and getting are 2 different things. Umbrella seems worth the cost to me.

Ha

 

[brewer12345]

SC, I think you can reasonably skip dental, all kinds of property coverage and LTC. I think you're nuts to skip liability/umbrella or at least high deductible health insurance.

 

[Dawg52]

I even went with a 10k ded BCBS plan. Has drug benefits, office copays and wellness benefits that skips the deductible. If I have some kind of surgery, yes I will have a pretty stiff bill to pay but I can sleep well knowing I have catastrophic protection.

 

[Outtahere]

Dh and I just went thru getting an umbrella policy, I couldn't explain it to his satisfaction so while we were in the ins co office he asked, he looked at me and said I guess we need this. It was more expensive than I had hoped but we also found out that for the past 9 years we could have been saving 5% for having multiple cars, they didn't know we were married because I never changed my name.

 

[maddythebeagle]

Interesting juxtaposition for the folks that quote the number of unisured as a reason for universal health care....the number of people that view health insurance as wealth protection....and some folks willing to fly by the seat of their pants so that they can spend on other stuff.....Now I can kinda understand why some states are looking at mandatory health insurance.....I guess I dont really have a point.....I still want health insurance not connected to work

 

[dmpi]

I don't understand this.  If you have no insurance, you get hurt & the medical cost is greater than your assets. Who is going to pay the diffrence?

 

[mickj]

I don't understand this. If you have no insurance, you get hurt & the medical cost is greater than your assets. Who is going to pay the diffrence?

We will

 

[Tadpole]

Interesting juxtaposition for the folks that quote the number of unisured as a reason for universal health care....the number of people that view health insurance as wealth protection....and some folks willing to fly by the seat of their pants so that they can spend on other stuff.....Now I can kinda understand why some states are looking at mandatory health insurance.....I guess I dont really have a point.....I still want health insurance not connected to work

You have a point or rather the picture. The debate has taken a wrong turn, I think. While people measure their best option on insurance, no one seems concerned that the costs cannot contiune at rates so far above inflation forever. So is there a better delivery system that maximizes the use of resources, minimizes the use of unnecessary resources, and introduces cost/benefit and risk into the system? What precisely contributes to run away inflation in this area? So far, most of what I have heard is technology. This seems to imply that technology is an add-on to the care that was previously provided. Is that efficient. Has some of the care that was previously given become obsolete? I am not a medical person but the medical profession would do the country a favor if they poured some of the lobbing energy into defining the problem.

 

[runnerr]

Tadpole, just who do you think benefits from the higher costs…could it be the medical profession? In addition, if the system is a money making proposition for them why would they change it. It will take congress to change the system and I do not see that happening

 

[Ed_The_Gypsy]

Check out Healthcare Savings Accounts. See if/what is available to you in your state.

This gives you high deductable health insurance (gotta have it!) and an associated account to use to invest your savings. I think it is a great deal.

Use the 'search' function on this board for HSAs. They have come up before and there is some great information here.

 

[tryan]

Dropped dental ins when I left mega-corp. No regrets (even after a couple cavities for the kids). Dental is not life/FIRE threatening. So it goes.

Won't renew a 10 year term life policy when it expires in a few years. NW should/will allow us to be self insured. No threat to FIRE ... so it goes.

But without health insurance you're a cat-scan away from bankrupcy. So it stays. Not the "gamble" I want for myself, much less the DW and kids.

On a side note, I was rejected for a umbrella policy 3 times ... too many rentals.

I have been wondering what keeps someone from sueing for what their lawyer knows the umbrella is worth plus what you are worth too. Don't they usually try to go for it all?

Having been sued a few times, most lawyers will take the easy $$ (insurance settlement). Much harder to take a primary residence or garnish wages. They are looking for the best return on thier time, too.

 

[Martha]

I don't understand this. If you have no insurance, you get hurt & the medical cost is greater than your assets. Who is going to pay the diffrence?

Depends. If you have an emergency, and are treated in the hospital, hospitals can be very aggressive in their collection techniques because they usually use outside collection agencies. You will lose your non-exempt assets. If you file bankruptcy, that will be it and the hospitals and providers will eat the difference.

The real problem is what happens if you get a terrible illness. After spending your assets you might not get healthcare. It is going to be tough to buy insurance when you are ill and you will face at least a 6 month pre-existing condition exclusion period, even if you go on a risk pool.

Get a policy while you are young and they are relatively cheap. I would get the umbrella too if you have non-exempt assets.

If you have non-exempt assets, lack of good insurance is not going to protect you from lawsuits.

 

[jazz4cash]

You aren't going bare.  You are keeping the biggies -- home and auto.  Medical is one you should reconsider but you can save a bundle going with a high deductible.  If your health is good, you can get a $5000 deductible for very little -- depends on age -- plus you get lower costs at the doctors and pharmacies because most have some sort of PPO feature.  That's a biggie you should reconsider.  The umbrella is only a factor if you have significant assets to protect.

Check out the high deductible. Another good reason to do so is the negotiated rates between healthcare providers and insurers. I went to chiropractor recently and at first they said treatments were "covered" and my cost was $66 until deductible was met. Once they figured out my coverage did not include chiropractic, the cost per treatment was $85, so there was a 20% discount just for being insured even though they did not pay a dime. In looking at other doctor bills, the "negotiated rates" or "reasonable and customary" are often 40% less than the going fee.

 

[shorttimer]

Since our friend, who was training for a marathon and in excellent health was diagnosed and subsequently died of pancreatic cancer died at age 40, I could not imagine going without health insurance. He could barely stand the pain with the very costly drugs covered by his insurance company. he would have left his young children with nothing if they had to pay themselves.
Then last year we had our own bout with Malignant Melanoma in my house. Probably from too much sun when DH was a child, before sun block when a tan was considered healthy. Several surgeries later, he goes to the MD every three months for agressive skin checks. I would not want the thousands of dollars in bills we incurred with a very early detection. At any time another spot could pop up and back we'll go for surgery and this time probably chemo. and he had no control over what happened when he was a youngster fourty years ago.

I agree with the high deductible- going bare is risky. Getting cancer or some crazy health problem can happen to anyone. It is a non discriminating illness.

 

[TromboneAl]

If you have no insurance, you get hurt & the medical cost is greater than your assets. Who is going to pay the diffrence?

It could also happen that you need some procedure but can't afford it, so you don't get the procedure, and you die.

 

[Rich_by_the_Bay]

It could also happen that you need some procedure but can't afford it, so you don't get the procedure, and you die.

I think that happens regularly. We have lots of patients who noticed a lump somewhere, had no money, put it off until their bodies are riddled with cancer. Then they come in even though they have no money because they are so sick.

Their care, not to mention their lives, is much costlier and less successful.