Self Insuring for Healthcare

[ripper1]

One nuance of Obamacare is that if your income is too high for a subsidy and the lowest cost silver plan exceeds 8% of your income (O-MAGI) then you can buy catastrophic coverage even if you are over 30.

We have that situation and luckily, where we live health insurance is not age rated so the cost of a catastrophic policy is 35-40% lower than the cost of a bronze plan. That might be an angle to explore. It has saved us a bunch.

Also, you might consider moving to someplace where health insurance is more affordable.

I have never heard that. But that being said my health premiums with city equal 22% of my pension and wife's ss. Do you have something to show that?

 

[Animorph]

The thing is we are used to PPO's and most of what I see is HMO. I would say that PPO's are much higher.

I hear that can be a problem. I'm in an ACA PPO HSA plan that I like. I purchased it directly with the insurer, without a subsidy, rather than through healthcare.gov. That might give you more options, though my plan is on the official site as well.

 

[utrecht]

You will pay deductible, co-pay, co-insurance and all other cost sharing until you reach the total out of pocket maximum, then you pay no more that year for covered services. In your example, that's $6300.

That doesn't make any sense. If I pay everything until I meet the deductible, then why does it say $250 for facility fee for a surgery and 0% co-insurance for the surgeon? If I pay everything before the deductible is met and nothing afterwards, then where does the $250 come in and why do I pay 0% for the surgeon?

 

[Nunthewiser]

ripper1-

Scanning the thread I can't figure out if you have retired or not retired yet. It would be wise to limit/adjust your MAGI to fit what you need for subsidy. My ex-employer( Lockheed Martin) put me in the same boat as you- we would have had to pay $17k for healthcare on a $36k pension. Instead, we pay about $1k for healtcare (mine is a Bronze Plan $0, wife gets the silver low deductable cost sharing plan $800, kid gets CHIP $200). I could have had a higher , front loaded, pension but it would have cost me in subsidy.

 

[aaronc879]

ACA compliant plans do not have annual or lifetime caps.
Reference: Lifetime & Annual Limits | HHS.gov/healthcare

The premium subsidy can be applied to any metal plan including Bronze. It is the cost sharing subsidy that is limited to Silver plans.

My bad. I'm low income and I pay most attention to what affects me. I know that I need to have a Silver plan to get the best deal but I do realize that higher income people probably do not want the Silver plan.

 

[Animorph]

In Illinois I see BCBS has Blue PPO Bronze 006, which is HSA eligible, and also available in other non-HSA flavors if you want low deductibles. You should be able to get a quote directly at Health Insurance Illinois | Blue Cross and Blue Shield of Illinois , though some of the links didn't work for me.

 

[nun]

If you can live of savings so that your income is below 150% of federal poverty level you will qualify for Medicaid. When I retired I couldn't buy an ACA plan as my income was too low and I had to choose a Medicaid plan and provider. During this I was also told of a state plan that would pay for insurance I got from an employer or as a retiree if my income was low. I think they do this to keep the working poor off Medicaid if they have access to other insurance.

 

[ziggy29]

IMO health insurance is the one kind of insurance which is almost impossible, except for the very richest among us, to truly "self-insure".

 

[ziggy29]

The premium subsidy can be applied to any metal plan including Bronze. It is the cost sharing subsidy that is limited to Silver plans.

For most people. For American Indians at or below 300% of the FPL, you can buy any policy on the Exchange with no cost sharing at all ($0 deductible, $0 copay).

I was doing that for a while and I had an ER visit last year which cost me $0 out of pocket. Now I have an HSA-eligible plan through FEHB since I became eligible for FEHB in May, since it's about $95 a month for me instead of $310 a month on the Exchange, so I figure I can self-insure the $215 a month difference into an HSA to offset the copay and deductible I have now, and probably come out ahead.

 

[jim584672]

Isn't it true that Obamacare has to take anybody regardless of their current condition?

You need to get a policy in the open enrollment or special enrollment periods only. This is to prevent people from buying insurance only when they get sick. Medicaid will take you at any time of the year, but you need low monthly income to qualify.

Self insurance is a really bad idea, IMHO.

 

[rodi]

Two reasons not to self insure - learned this year by me.

Past medical expenses do not predict future medical expenses. We were, in general, a very low consumer of medical services as a family. Until this year. Multiple broken bones (sports injuries) and a short hospitalization has us approaching our family deductible. Rosie's example would be a similar example.

Negotiated rate is FAR cheaper than full price. Even though we're out many thousand this year (on top of insurance), the price we paid was far less than the full price. Probably about half of full price. If you're having to pay-as-you-go, it's nice to have the price be negotiated lower by your insurance company. If we didn't have insurance, we'd have paid full price.

 

[Walt34]

Unless one is extremely wealthy, as in has a yacht with a helicopter on it and a private transoceanic jet, I think it would be foolish to self-insure given the potentially horrific expenses of some diseases and injuries.

A late aunt was on a cancer drug that cost $10,000. A week. (They got help somehow for that, but they were by then broke.) A medivac helicopter ride starts at ~$40k. A week in ICU is six figures and a missed step on a stairway can put you there.

Nobody I know can shrug off expenses like that.

 

[MBSC]

Im looking at the details of a bronze plan. It has a $6300 deductible with $6300 max out of pocket. Under "surgery" it says:

Facility fee....$250 co-pay
Surgeon fee...0% co-insurance

Lets say I have paid $1000 towards my deductible this year and need surgery. The surgery costs $20,000. How much do I pay?

That doesn't make any sense. If I pay everything until I meet the deductible, then why does it say $250 for facility fee for a surgery and 0% co-insurance for the surgeon? If I pay everything before the deductible is met and nothing afterwards, then where does the $250 come in and why do I pay 0% for the surgeon?

In this scenario, you will reach the $6300 OOPM before meeting the $6300 deductible. The $250 copay will be applied toward the $6300 OOPM. This leaves $6050 in deductibles to be met between your earlier services and upcoming surgery. As MichaelB stated, you will reach the $6300 OOPM with all patient responsibility combined.

Co-insurance is your responsibility after the deductible is met and before the OOPM is met. Since your deductible and OOPM are the same, the co-insurance is not applicable. Instead of saying N/A, they used 0% instead.

 

[pb4uski]

I have never heard that. But that being said my health premiums with city equal 22% of my pension and wife's ss. Do you have something to show that?

Something to show what?

https://www.healthcare.gov/choose-a-plan/catastrophic-plans/

People under 30 and people with “hardship exemptions” may buy a "catastrophic" health plan. This type of plan has lower monthly premiums and mainly protects you from very high medical costs. (emphasis added)

https://www.healthcare.gov/fees-exemptions/exemptions-from-the-fee/#hardshipexemptions

Income-related exemptions

• The lowest-priced coverage available to you, through either a Marketplace or job-based plan, would cost more than 8.05% of your household income

.......

I mispoke in my earlier post where I said lowest cost silver plan.... it is really lowest cost bronze plan.

Obamacare: How affordable is health insurance after the Affordable Care Act? | NJ.com

“…..The federal government, however, provides a specific definition. Under the new law, individuals must pay a penalty if they do not have health insurance unless the cheapest available plan would cost more than 8 percent of their modified adjusted gross income. The federal government deems any plan that costs more than that "unaffordable."

Unaffordable by definition

An analysis of insurance plans on the new exchange found many residents in New Jersey who are in their 50s and 60s will find insurance unaffordable by the government’s own definition.

For example, a 60-year-old in New Jersey won’t find an individual health insurance plan on the exchange for less than $600 per month. Anyone who earns between $45,960 — the level at which subsidies stop — and $90,000 would be exempt from the penalty because the federal government considers that unaffordable.

Two 60-year-olds shopping for a family plan will pay almost $14,000 annually for the cheapest plan. Their income would have to be about $178,000 to meet the government’s "affordability" test. That’s more than twice the median household income for New Jersey residents ages 45-64, according to the U.S. Census.

Plans on the exchange are based on metallic tiers — platinum, gold, silver and bronze. The cheapest plans, the bronze, often pay only 60 percent of medical costs and have deductibles that are more than $2,300, putting them beyond the reach of many New Jersey families. Those who do not meet the "affordability" test are eligible to buy catastrophic coverage on the exchange, where plans are typically about $100 cheaper per month. Premiums are based, in part, on age. The older you get, the more health insurance costs because insurance companies believe older people are a greater risk for expensive care. ……” (emphasis added)

For these purposes income would include your pension and SS and most other elements that enter into adjusted gross income on your tax return. See http://laborcenter.berkeley.edu/pdf/2013/MAGI_summary13.pdf

 

[Tandemlovers]

We bought a HDHI plan that is HSA eligible using the ACA exchanges this year. Our monthly premium is $534 for a family of four.

In June of this year, my husband was the victim of a car jacking attempt in Florida, during which he was shot through the stomach and leg. He has recovered fully, in no small part due to the quick response of emergency care workers and physicians. Since the incident occurred outside of our insurance network, we were quite apprehensive about what kind of bills we would be facing, as his stay in the ICU lasted six days. All told, his stay cost almost $200k.

Our insurance carrier has paid all his expenses except for $3,800, which we will owe the hospital in Florida.

This was an unusual thing to happen; we don't know anyone in our circle of friends and relatives who has been the victim of a violent crime. I relate this incident to emphasize how grateful we are to have had health insurance and I can't imagine what we would have been facing had we self insured.

 

[easysurfer]

Insurance premiums seems like a waste of money until you really need it, then that is a lifesaver. Which reminds me, my LTC insurance premium is due in a couple of months . No way would I self-insure for health insurance.

 

[Car-Guy]

Negotiated rate is FAR cheaper than full price. Even though we're out many thousand this year (on top of insurance), the price we paid was far less than the full price. Probably about half of full price. If you're having to pay-as-you-go, it's nice to have the price be negotiated lower by your insurance company. If we didn't have insurance, we'd have paid full price.

Real life example. Last year a close family member had some serious medical issues. I saw the bills. Between hospital stays and doctors visits the total charges were about 200k. Their insurance paid about 72k (the insurance negotiated rates), and the patient paid 3k. (deductible and co-insurance). That is about 125k that no-one had to pay. Makes you wonder what happens to that 125k. Write offs, tax breaks, passed on to those who don't have insurance, etc.

I "assume" that the doctors and the hospitals are still making money at the negotiated rates.

I can almost hear MR: T saying, "I pity the fool", without insurance.

 

[Texas Proud]

Real life example. Last year a close family member had some serious medical issues. I saw the bills. Between hospital stays and doctors visits the total charges were about 200k. Their insurance paid about 72k (the insurance negotiated rates), and the patient paid 3k. (deductible and co-insurance). That is about 125k that no-one had to pay. Makes you wonder what happens to that 125k. Write offs, tax breaks, passed on to those who don't have insurance, etc.

I "assume" that the doctors and the hospitals are still making money at the negotiated rates. I can almost hear MR: T saying, "I pity the fool", without insurance.

Why would you think anything happens to that $125K

It would be the same as if you went into a store and they said this item sells for $100, but we have a 50% off sale today.... so you buy it for $50.... the store records $50 of income.... the $100 is a made up number, or sticker price.... so the other $50 never existed....

 

[Texas Proud]

I only read half the thread.... but I would just buy the lowest cost bronze plan and call it a day....


OH... that is what I am doing!!! (but I do not have any other option right now)...

 

[Car-Guy]

Why would you think anything happens to that $125K

It would be the same as if you went into a store and they said this item sells for $100, but we have a 50% off sale today.... so you buy it for $50.... the store records $50 of income.... the $100 is a made up number, or sticker price.... so the other $50 never existed....

So in that analogy, to compare apples to apples, the buyer that shopped at that store and didn't have an insurance card (or discount card for the store) would have to pay full price.

You may be right, but I suspect there is something else going on behind the scenes with medical.

 

[Fermion]

Technically you *can* gain an open enrollment at any time by changing state residency. This could be fairly easy for someone in an RV or a person who snowbirds and already has two residences.

This would not get you out of the bike crash or car jacking expense (btw that sounds awful...did he resist or did the POS scumbag just shoot him for getting out of the car too slow?)

I guess you could couple the catastrophic plan with the residency plan, such that you could switch to a silver gold or platinum plan within a week or so if you developed an expensive condition over several months.

A lot of effort to save a portion of $1600 though.

 

[NW-Bound]

About hospital rack rates vs. insurance-negotiated rates, I read the following reason regarding how the former being so much higher. It was claimed that many individuals failed to pay, and the bills had to be sent to collection. Because of the low payment rate, they had to jack up the price to make the same amount. I don't know whether that is true or not.

 

[Rosie]

Ouch Rosie!

DW and I are cyclists too. Very sobering story. I hope you've made a full recovery.

If you care to share, I'm curious as to how the crash happened. Any lessons learned?

Yes, I did make a full recovery, thanks! I'm told I hit a rough patch of pavement while I was going downhill at ~ 30 mph and went over the handlebars. I remember none of it, thankfully.

But back to the topic at hand ...

The following year, when I left my j*b and started consulting, I tried to obtain health insurance on my own. By that time I had completely recovered from my injuries and had resumed all my normal activities, including bike riding.

Mind you, this was in 2010, before the ACA was implemented.

I first applied to Blue Shield CA, the company who insured me on my employer's plan. They turned me down *flat*. They said I "did not meet their underwriting criteria", and they provided a list of all the treatments I had the previous year, on account of my accident, to justify their refusal. Basically, being in an accident was tantamount to having a preexisting condition.

I applied to a couple of other insurance companies, who likewise turned me down, on account of the treatments I received the previous year due to my accident. I cannot begin to tell you how stressful this was for me.

At least Kaiser, who also turned me down initially, told me that I could request reconsideration of my application. So I trooped to all the physicians who treated me the previous year -- GP, spine doc, ophthalmologist, PT -- and they very willingly wrote letters describing my treatment and recovery, stating that I had fully recovered from my injuries, and rather subtly assuring Kaiser that my prior accident wouldn't cost them going forward. And next thing I knew, the Welcome to Kaiser packet arrived in my mailbox.

Like I mentioned, this was before the ACA went into effect. I was perfectly healthy yet I had a helluva time obtaining health insurance. If I hadn't recovered fully from my accident the previous year, or if I had any condition more serious than, say, a hangnail, I probably would have been unable to get coverage and I would have basically been screwed. Like so many others were screwed back then.

So whenever I see some politician ponderously proclaiming that he or she would repeal Obamacare, I sprout fangs & grow hair on my knuckles and flash back to all the hoops I had to jump through to get insurance pre-ACA, and how fortunate I was to finally obtain it.

 

[DEC-1982]

Going through this thread, I was slightly unclear about the exceptions to the once a year ACA enrollment.

I left MegaCorp in mid 2015 but as part of the severance package I get insurance through MegaCorp till mid 2017. Can I apply for ACA in mid-2017 or do I have to apply at the beginning of 2017 (or very late 2016)?

 

[hnzw_rui]

Going through this thread, I was slightly unclear about the exceptions to the once a year ACA enrollment.

I left MegaCorp in mid 2015 but as part of the severance package I get insurance through MegaCorp till mid 2017. Can I apply for ACA in mid-2017 or do I have to apply at the beginning of 2017 (or very late 2016)?

Iirc, you get a special enrollment period and can apply for ACA up to 60 or 90 days (forgot what it was exactly) upon losing company-provided health insurance.