ER Eddie
Thinks s/he gets paid by the post
- Joined
- Mar 16, 2013
- Messages
- 1,794
Hi folks. I'm posting this in the hopes to get some feedback on my health insurance dilemma and my choice among the various options.
Here's the skinny: I'm 57, and in 5 months, I will lose my health insurance. My company, where I work part-time, is eliminating health coverage for part-time workers. I could retain health insurance if I increased my work hours, but I don't want to do that. So, I need to cover health insurance.
My options seem to be:
1. ACA plans
2. COBRA
3. Christian health sharing plans
4. Short-term policies
5. No insurance; self-insure
I've investigated each of these, and #4 seems to be my best option. Here's my analysis:
1. ACA plans are too expensive. I can't see myself writing a check for $1000 every month, just to cover a low-probability event. My expenses run around 25K per year without health insurance. I'm not going to raise my total expenses by 50%, just for a single item which, in all probability, I will not use. I can do it financially; I budgeted for it; I can afford it. I just don't want to do it. I find it a ridiculous expense. Plus ACA plans often have restricted provider networks.
There is the issue of subsidies. To qualify, I'd need a MAGI of under 48K. My MAGI would be over that, assuming the market does as well as it has over the past 5 years (I've averaged 43K/yr from cap gains and dividends; I'm also going to continue to work a little and draw a pension, which would add another 28K, so that totals 71K). While it's true that my MAGI would drop below 48 if the stock market has a bad year, I don't want to bet on it it happening.
2. COBRA is priced around the same as ACA plans ($1000/mo, maybe increasing). So again, I can't see writing a check for $1000+ every month, just to protect me against some low-probability event. Plus, it runs out in 18 months, and I'd be faced with the same problem.
3. The Christian healthshare plans appealed to me at first, at least the more lenient ones that don't require strict adherence to specific dogma. But I am hesitant, because they are under no legal obligation to provide services; it's not a legal contract. You just have to trust that they'll stick to their agreements. They do seem to have a good track record of doing that. But I don't know, and I'm not confident about putting my financial security in the hands of an organization that ultimately is under no legal obligation to do what they say. Also, I didn't see any high-deductible options.
Another negative was that if you have a pre-existing condition like high cholesterol, you have to work with a health coach to get it down, and you have to do what the coach says, or else. I don't believe a lot of what passes for standard nutritional advice, and "high cholesterol" is junk science for the most part. So I can imagine getting into debates with my health coach, then being tossed out for non-compliance.
4. Short-term plans seem like my best option. They allow you to have really high deductibles, like 10K or 12.5K, and to select a wide variety of parameters. The provider network is good. The annual cost can be around 2K per year, which is much more reasonable than the 12-14K/yr of the ACA plans. The government has lifted restrictions on the plans, so that they can extend a full year rather than the 3 months they were limited to previously. And you can renew the policy 3 times, so it can go 4 years. Although the plans are not ACA compliant, that doesn't matter anymore, because the tax penalty has been removed.
The downside is that I'll have to pay out-of-pocket for all my routine medical care -- doctor's visits, blood work, medication. That's okay. I like the idea of insurance covering catastrophic expenses, not every little thing (I think that's one reason why insurance is so expensive ... different subject). I don't really know how much paying out of pocket will cost, because I've never done that, but as a rough guess, I'll say 3K/yr. for 2 doctor visits, one pill, and two rounds of labs.
5. Go commando; self-insure. As I understand it, this option is basically just saying you'll pay for whatever comes up, out of your own savings. I suppose that's an option, and it might be a good one for people who have massive savings and good health. I'd have more peace of mind if I knew I had some protection against catastrophic expenses.
So that's my analysis of the options and my plan. Thanks for taking the time to read through it.
I'm interested in any feedback you might have. Does my analysis make sense? Does my selection of a short-term plan sound like the right choice, given my circumstances? Did I overlook something?
Cheers.
Here's the skinny: I'm 57, and in 5 months, I will lose my health insurance. My company, where I work part-time, is eliminating health coverage for part-time workers. I could retain health insurance if I increased my work hours, but I don't want to do that. So, I need to cover health insurance.
My options seem to be:
1. ACA plans
2. COBRA
3. Christian health sharing plans
4. Short-term policies
5. No insurance; self-insure
I've investigated each of these, and #4 seems to be my best option. Here's my analysis:
1. ACA plans are too expensive. I can't see myself writing a check for $1000 every month, just to cover a low-probability event. My expenses run around 25K per year without health insurance. I'm not going to raise my total expenses by 50%, just for a single item which, in all probability, I will not use. I can do it financially; I budgeted for it; I can afford it. I just don't want to do it. I find it a ridiculous expense. Plus ACA plans often have restricted provider networks.
There is the issue of subsidies. To qualify, I'd need a MAGI of under 48K. My MAGI would be over that, assuming the market does as well as it has over the past 5 years (I've averaged 43K/yr from cap gains and dividends; I'm also going to continue to work a little and draw a pension, which would add another 28K, so that totals 71K). While it's true that my MAGI would drop below 48 if the stock market has a bad year, I don't want to bet on it it happening.
2. COBRA is priced around the same as ACA plans ($1000/mo, maybe increasing). So again, I can't see writing a check for $1000+ every month, just to protect me against some low-probability event. Plus, it runs out in 18 months, and I'd be faced with the same problem.
3. The Christian healthshare plans appealed to me at first, at least the more lenient ones that don't require strict adherence to specific dogma. But I am hesitant, because they are under no legal obligation to provide services; it's not a legal contract. You just have to trust that they'll stick to their agreements. They do seem to have a good track record of doing that. But I don't know, and I'm not confident about putting my financial security in the hands of an organization that ultimately is under no legal obligation to do what they say. Also, I didn't see any high-deductible options.
Another negative was that if you have a pre-existing condition like high cholesterol, you have to work with a health coach to get it down, and you have to do what the coach says, or else. I don't believe a lot of what passes for standard nutritional advice, and "high cholesterol" is junk science for the most part. So I can imagine getting into debates with my health coach, then being tossed out for non-compliance.
4. Short-term plans seem like my best option. They allow you to have really high deductibles, like 10K or 12.5K, and to select a wide variety of parameters. The provider network is good. The annual cost can be around 2K per year, which is much more reasonable than the 12-14K/yr of the ACA plans. The government has lifted restrictions on the plans, so that they can extend a full year rather than the 3 months they were limited to previously. And you can renew the policy 3 times, so it can go 4 years. Although the plans are not ACA compliant, that doesn't matter anymore, because the tax penalty has been removed.
The downside is that I'll have to pay out-of-pocket for all my routine medical care -- doctor's visits, blood work, medication. That's okay. I like the idea of insurance covering catastrophic expenses, not every little thing (I think that's one reason why insurance is so expensive ... different subject). I don't really know how much paying out of pocket will cost, because I've never done that, but as a rough guess, I'll say 3K/yr. for 2 doctor visits, one pill, and two rounds of labs.
5. Go commando; self-insure. As I understand it, this option is basically just saying you'll pay for whatever comes up, out of your own savings. I suppose that's an option, and it might be a good one for people who have massive savings and good health. I'd have more peace of mind if I knew I had some protection against catastrophic expenses.
So that's my analysis of the options and my plan. Thanks for taking the time to read through it.
I'm interested in any feedback you might have. Does my analysis make sense? Does my selection of a short-term plan sound like the right choice, given my circumstances? Did I overlook something?
Cheers.
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