Would you risk no insurance and ACA Penalty?

[Whisper66]

I wouldn't risk not having insurance. This year we've had two relatively common issues, below are the billed amounts and what insurance did for us. (FYI - Our insurance is through my old company.) I can't imagine the bills without insurance for some of the really terrible things that happen to folks (cancer, bad car wrecks, etc..)


Kidney Stone Attack - 6 hrs in ER with pain meds and tests run + 1 followup doctor visit
$15,700 - billed
$ 9,650 - total negotiated price (61% of billed amount)
$ 2,250 - we paid out of our pocket

Gall Stone Attack and Gall Bladder Removal - Emergency Room visit with pain meds, misc tests + f/u visits to doctors and eventual surgery to remove
$54,390 - billed amount
$15,730 - total negotiated price (29% of billed amount)
$ 2,690 - we paid out of our pocket

 

[Texas Proud]

It really is a risk vs reward decision.... and with the costs you are talking about it MIGHT be worth it...

I will give an example... at the gym a younger lady (late 30s early 40s) was out... class instructor said she got pancreatitis and was in the hospital for 3 days... while talking to another lady she said that neither the lady who got sick or the lady talking to me had insurance... they could not afford it... (now, I did talk about tax credits etc. but the lady talking said she could not even afford $200 a month!!!)....

Now, the sick lady has a $26K bill... someone else said they had just finished paying of a bill for their son last year...


So, one lady has paid out big time for no insurance and one not at all...

Also, think about how much you are saving... $12K a year with no problems can add up quickly... if you have a major incident every 5 years that is $60K you have saved... plus, you still would have to pay out of pocket....


It might be an option to go outside and buy a very large deductible plan that does not cost near as much... sure, you take the risk but it probably would save you money in the long run....

 

[gauss]

For 2017, I am not going to log in to healthcare.gov, select the lowest-cost bronze plan, and sign up. Instead, I'm going to carefully consider all of the options before purchasing an on-exchange or off-exchange plan, including various forms of partial and total self-insurance. This will be unpleasantly time-consuming, but as a skinflint I've been known to exhaustively investigate options for purchases much less costly than modern health insurance.

Assuming that as part of this you will be doing a legal analysis of your assets and income streams to identify which ones are fair game for creditors (ie hospitals) and which are not...

-gauss

 

[Packman]

We live in AZ and at this point, don't even know for sure if there will be one insurer in healthcare.gov. And if there is, I expect our premiums to double or triple. Could be paying $25k/year (for two of us) for a HDHP. We are healthy and don't see doctors much. I thought of self insuring, moving to another state, or going back to work as options. Of the three options, we expect that one of us will try to go back to work, just for group HI. It stinks, if that is what we have to do, but it's not just 2017 I'm concerned about. I have 5 more years to Medicare and my DW has 7.

I might have one more option and that is to try to lower our MAGI to under the cap to get the subsidy.

 

[photoguy]

We are both pretty healthy. It seems like there's a 98% chance that we'd be better off not getting insurance. The problem is that 2% chance that we get sick which could be a killer. Of course, we could re-enroll in 2018 if needed.

Would anyone roll the dice and not get health insurance under these circumstances?

Generally people buy insurance to eliminate worst case outcomes (even if unlikely) for which they can't take the hit. When the worst case outcome is not material, then it can make sense to skip insurance as it generally has negative expected return.

I'm comfortable going without comprehensive on my car because my net worth is such that I could buy a new car without any problem.

I'm not comfortable going without health insurance because a bad year (not even worst case) might result in several hundred k in medical bills. If my net worth was much higher (maybe $10-20M) then maybe health insurance would be inconsequential.

Also, how many years were you planning on going without insurance? A 2% risk for one year is not too bad a gamble (lets assume 2%/year is accurate). But if you repeat this several years in a row, you greatly increase the probability that you'll hit a bad outcome. E.g. for ten years you'll be at 20% probability of a bad outcome.

 

[littleb]

There is no way we would take the risk to not have health insurance. DH and I are very active and healthy for our age. We do not take any medication and exercise weekly and eat healthy.

We have had a high deductible health plan for over 10 years and even when our deductible was 2,500 per person we never met the deductible. Even with our health history we would never take the gamble.

You are in good health until you are not.

A family member who exercised, did not smoke or drink and was not overweight had a heart attack called the widow maker at age 50. Heart disease does not run in the family. This heart attack came out of left field. He survived but his hospital bill was over $80,000 which did not include dr. visits or prescription drugs. When his co workers heard about it they were concerned because he was the last person they would expect to have a heart attack at such a young age.

Cancer also strikes many people at all ages regardless if they are healthy. Imagine being diagnosed with cancer and you are waiting 4-5 months for the next open enrollment before you proceed with the necessary surgery or chemo treatment.

We are also in a financial predicament for 2017 because Blue Cross is pulling out of major cities in Tennessee and premiums are predicted to increase 50%. We will be covered because our city was not part of the BCBS exodus but 2018 is another story. The ACA is slowly imploding. We are actually thinking about moving to another state that is more stable until we are Medicare eligible.

 

[Packman]

We live in AZ and at this point, don't even know for sure if there will be one insurer in healthcare.gov. And if there is, I expect our premiums to double or triple. Could be paying $25k/year (for two of us) for a HDHP. We are healthy and don't see doctors much. I thought of self insuring, moving to another state, or going back to work as options. Of the three options, we expect that one of us will try to go back to work, just for group HI. It stinks, if that is what we have to do, but it's not just 2017 I'm concerned about. I have 5 more years to Medicare and my DW has 7.

I might have one more option and that is to try to lower our MAGI to under the cap to get the subsidy.

Update: I just received an email from our state insurance commissioner with rates for 2017. It looks like the rate increase we will be paying is 128% for a HDHP, more than double. We'll pay $1,555 per month from $682 this year. If I understand the subsidy calculations correctly, we will try to qualify for the subsidy. If not, it's back to work we go.

 

[littleb]

Outrageous Packman!

I hope you can get your MAGI down so you will be eligible for subsidies.

We are currently paying 1300/monthly and with the 2017 increase it would not surprise me if our premium will be close to 2000/monthly. No subsides at this point but next year we will move money around to reduce the MAGI. Maybe take money out of savings accounts if necessary.

 

[pb4uski]

Update: I just received an email from our state insurance commissioner with rates for 2017. It looks like the rate increase we will be paying is 128% for a HDHP, more than double. We'll pay $1,555 per month from $682 this year. If I understand the subsidy calculations correctly, we will try to qualify for the subsidy. If not, it's back to work we go.

That is outrageous...... I would move before I would go back to w*rk!

Will the new premium be more than 8.13% of your income? If so, what is the pricing of catastrophic coverage for people your age in your state?

 

[fh2000]

Update: I just received an email from our state insurance commissioner with rates for 2017. It looks like the rate increase we will be paying is 128% for a HDHP, more than double. We'll pay $1,555 per month from $682 this year. If I understand the subsidy calculations correctly, we will try to qualify for the subsidy. If not, it's back to work we go.

DW and I are on our OMY still. The ACA bronze HSA plan premium that I looked at 2 years ago, has now increased more than 30%. We are in Los Angeles. Within my zip code, there are 38 plans to choose from (actually more than 2 years ago), except all have increased pricing.

My retirement income would be mainly Roth conversion. In order for me to get subsidy now, I will have to cut back on large amount of Roth conversion. That means that I definitely will pay more taxes after RMD begins. I will need to work on the math of getting subsidy, as opposed to paying taxes.

 

[ABQ2015]

I agree with a previous poster that if you plan to risk having no health insurance, research your state medical bankruptcy laws and have as much of your assets in protected areas as possible. I know a couple who decided to retire in their late 50's and forego health insurance. She had an emergency appendectomy at age 60 that resulted in blood clots and a bad stroke. They declared bankruptcy but lost some savings because it was distributed between several IRAs and investment accounts. Sold their motor home and extra vehicles to family members. He is a lawyer so is able to navigate the system better than most of us.

I don't know if their lack of health insurance impacted the quality of her healthcare but they could not afford the expensive rehab that she needed to regain some independence. She then went on Medicaid so they could afford a temporary nursing home but Medicaid paid very little for rehab.

 

[Lakewood90712]

Nope! You also gain access to the discounted "in-network" provider rates via the insurer--especially if you use the large dominant player in your area.

Without insurance there are no limits on what the providers can charge you.

I look at the premiums as half "insurance" and half "group purchasing".

-gauss

+ 1. I recently ended up in the emergency room , got some tests , discharged in about 10 hours , not admitted to the hospital. The billing were close to $14,000. The insurance co ( BC, PPO ) paid about $2800 , I paid about $400.

No way to pre negotiate a cash price after the fact. I would have been stuck with the " List Price bill if un-insured.

Sure , you can shop for medical services on a non urgent basis, and get a price close to the so called " Negotiated rates".

 

[Rosie]

Would anyone roll the dice and not get health insurance under these circumstances?

No. No no no no no.

I was in a bike crash several years ago, and the bill for my treatment and rehab amounted to over $250K. I had insurance at the time and I only paid about $8K out of pocket.

If I had to go without health insurance, I'd stay home wrapped in bubble wrap.

 

[Sunset]

Wouldn't even think about it. Woke up this spring with a special kind of pain. The kind no male could ever ignore. Few hours in the ER was 20k after the insurance companies discount.

All that money for a few tests and bottle of pills, and a diagnosis of "don't know".

Hope it's better, I really hate stepping on it as well

 

[Katsmeow]

Never. I could get cancer or some other serious illness that would cost beyond any reasonable means of cost to treat.

And, it isn't just that. Having insurance can protect you against balance billing if you go to an in network hospital and you get the benefit of discounts. A couple of years ago, my daughter had to go to the ER due to abdominal pain (we started with urgent care who sent us to the ER). It turned out to be the flu. Anyway, the amount that would have been charged was something like $18000! Now, this was an in network hospital and after discounts it was only a few thousand dollars. But, if there had been no insurance the bill would have been huge.

 

[Car-Guy]

Nope! You also gain access to the discounted "in-network" provider rates via the insurer--

My thoughts (and experience) exactly. Recently, a family member, who hadn't had any serious (or even minor) medical problem in over 25 years, had a sudden two week hospital stay. The total bills added up to over 200k. The insurance paid about 1/3 of that, which was their negotiated rates, and the family paid 3k which was their max annual coinsurance rate. To me medical insurance is a major discount card, which you pay for and hope to never need.

It made me wonder why everyone was jumping all over the makers of EpiPens recently for their "pricing models" when the medical industry as a whole has been doing this for as long as I can remember. Somebody didn't get their cut!

 

[JoeWras]

My thoughts (and experience) exactly. Recently, a family member, who hadn't had any serious (or even minor) medical problem in over 25 years, had a sudden two week hospital stay. The total bills added up to over 200k. The insurance paid about 1/3 of that, which was their negotiated rates, and the family paid 3k which was their max annual coinsurance rate. To me medical insurance is a major discount card, which you pay for and hope to never need.

I think the govt is having a hard time getting that message out to the young people who need to hear it. They think they are healthy so it doesn't matter.

Yet... A badly twisted and broken ankle that requires:
- X-rays
- MRI
- Surgery with hardware
- Surgery to take out the hardware later

Can easily cost 20k to 30k (face value).

It is way too easy to blow through 10k in costs, and pretty darn easy to bump that to 30k. The negotiated rates are really important in this case to bring it down to something more reasonable, even with a very high deductible.

 

[Aiming_4_55]

Would anyone roll the dice and not get health insurance under these circumstances?

I will probably be in your same situation in the future with rental income and/or consulting income exceeding the ACA numbers.

I would not semi-ER or ER without medical insurance as it'll be too easy to delay some things which may increase risk to myself or family. I would bite the bullet and factor that as required expense in my barebone budget.

 

[littleb]

My thoughts (and experience) exactly. Recently, a family member, who hadn't had any serious (or even minor) medical problem in over 25 years, had a sudden two week hospital stay. The total bills added up to over 200k. The insurance paid about 1/3 of that, which was their negotiated rates, and the family paid 3k which was their max annual coinsurance rate. To me medical insurance is a major discount card, which you pay for and hope to never need.

It made me wonder why everyone was jumping all over the makers of EpiPens recently for their "pricing models" when the medical industry as a whole has been doing this for as long as I can remember. Somebody didn't get their cut!

BBM

I agree drug companies have been doing this for years. I think the reason for the EpiPen outrage is because most patients that need them are children. When a product is used for children many people are outraged due to emotion. The sad thing is older sick people have been dealing with reduced drug coverage and outrageous costs for years but the outrage is ignored in the media.

 

[eytonxav]

Even if you were in your 20s, going without is a very bad idea.

 

[pb4uski]

+1 I insist that DD and DS carry health insurance... it is really financial protection for me as well as for them. No parent wants to get a call that their child just had a minor health event and is $50k in debt (or worse) because they failed to carry health insurance.

 

[Car-Guy]

+1 I insist that DD and DS carry health insurance... it is really financial protection for me as well as for them. No parent wants to get a call that their child just had a minor health event and is $50k in debt (or worse) because they failed to carry health insurance.

And if they refuse for "whatever reason"?

 

[MRG]

No. No no no no no.

I was in a bike crash several years ago, and the bill for my treatment and rehab amounted to over $250K. I had insurance at the time and I only paid about $8K out of pocket.

If I had to go without health insurance, I'd stay home wrapped in bubble wrap.

+1
A guy who started Megacorp in '84 with me went without insurance for 90 days. During that time he laid a bike down at high speed. Yeah stupid move but hey I don't need insurance.
Days/weeks in the burn unit and a lengthy rehab was something like $35k back then. Today?

 

[Lakewood90712]

Bankruptcy is just the ticket for young un-insured folks without assets who incur a huge medical bill. Add in credit card debt and presto, debt goes away, and spend the next 10 years rebuilding financial stability, the hard way.

Medical bills are supposedly the #1 reason for personal BK , not just among the young. My late uncle and his wife ended up in BK over long term care. They were very financially set, but had no long term care insurance. ( never imagined the cost of nursing home care, or how long he would end up living in same )

 

[Just_Steve]

No health insurance? NO WAY!
I was 52 and perfectly healthy until I wasn't. Diagnosed with cancer.
35 Radiation treatments @ $6,000 each
Other tests and many MRI's CT scans about $60,000
Followups to this day. Over $300,000.
Without insurance I would have been destitute, with insurance it cost me about $500.
There was no warning, routine yearly physical. Oh you have cancer. From healthy to not in less than an hour, go figure.