Paranoid Health Insurance Question

[joesxm3]

I was watching the CNN special on the health industry being broken and now I have my tin foil hat on. Hopefully someone can provide some reassuring information.

The idea of getting insurance from your employer and then getting really sick and not being able to work has got me worried.

Hopefully I am mixed up, but it seems to me that you need to be working for the employer in order to be able to buy the health insurance, except for the 18 month COBRA period after termination.

If you get really sick and can no longer work for the employer, does your membership in the group insurance policy terminate?

Does the insurance company have to keep paying for the illness once you have filed a claim for the condition? If so, what if the condition is more or less taken care of, say by some surgery and then comes back a few years later?

It would seem to me that if you were really sick for several years you would get kicked out of the employer's group policy and end up with no insurance.

I have disability insurance that would probably pay in that situation, but it is only $65k per year and does not cover major medical expenses.

Would you be able to get into Medicare early if you were disabled enough to get some Social Security disability payments?

The other thing that freaked me out is that CNN showed some people who were really sick and then hit a lifetime maximum of $2,000,000 on their health insurance. They said that $2M seems like a lot, but intensive care can cost $30k per day and some operations could be $100k per day. That would really eat up the $2M in no time.

The third thing that has got me worked up is all this talk of "universal health coverage". It sounds like all of the democratic candidates are basically planning to force people to buy health insurance and maybe get the rates lowered a little or give some sort of rebates to people to help pay for it.

It seems to me that this smells of some sort of cooperation with the insurance companies to increase their sales by forcing people to buy insurance without doing much to roll-back or put a lid on the cost increases and insurance company profits.

Am I undully paranoid? What am I missing here?

Thanks for the help.

 

[Rich_by_the_Bay]

Hopefully I am mixed up, but it seems to me that you need to be working for the employer in order to be able to buy the health insurance, except for the 18 month COBRA period after termination.

Understanding that everything depends on the specific contract, there are some generalities: yes, if you got sick, ultimately burned through your sick leave, left your job and lost insurance, COBRA would be the likely backup. Beyond 18 months of COBRA (assuming you can afford the premiums), you could be on your own.

Does the insurance company have to keep paying for the illness once you have filed a claim for the condition? If so, what if the condition is more or less taken care of, say by some surgery and then comes back a few years later?

Only until the expiration of the policy in force. They are not obligated beyond that, though COBRA must be offered in most cases.

It would seem to me that if you were really sick for several years you would get kicked out of the employer's group policy and end up with no insurance.

Correct. One of many flaws in the current system.

Would you be able to get into Medicare early if you were disabled enough to get some Social Security disability payments?

Not necessarily; certain diseases like kidney failure might qualify you but most will not, as I recall.

hit a lifetime maximum of $2,000,000 on their health insurance. They said that $2M seems like a lot, but intensive care can cost $30k per day and some operations could be $100k per day. That would really eat up the $2M in no time.

Correct. One of many flaws in the current system.

The third thing that has got me worked up is all this talk of "universal health coverage". It sounds like all of the democratic candidates are basically planning to force people to buy health insurance and maybe get the rates lowered a little or give some sort of rebates to people to help pay for it.

It seems to me that this smells of some sort of cooperation with the insurance companies to increase their sales by forcing people to buy insurance without doing much to roll-back or put a lid on the cost increases and insurance company profits.

No, I don't think that's the situation. Rather, they want to at least assure that you can get insurance if you are willing and able to pay for it (now, you cannot always even obtain insurance even when you can afford it, for example not in a group and having pre-existing conditions). With the plans I have heard, the companies will have to offer insurance to all. Depending on which plan, the gov't would subsidize premiums for the needy.

 

[cute fuzzy bunny]

I'm working with a former employee right now that developed some health issues after I retired, lost his job as a result, and is dealing with the costs.

Suffice it to say that its easily summable: think about whatever would be best for the insurance company regardless of the impact on the sick person. Thats pretty much what happens.

You get cobra, then the state risk pool, or if your state requires insurance companies to provide you with insurance and cant turn you down, you can get coverage anywhere within the state.

The trouble comes when you want to go to another state. You'll have to start from scratch with that states requirements to get insurance. Some ins companies do allow portability state to state.

 

[Insanity]

If I might, the United States has, per capita, the most expensive health care "system" in the world, yet we lag well behind countries spending a fraction as much in every imaginable way. Infant mortality: higher. Life expentancy: lower. Emergency room wait times: longer. Preventative care: less.

The only area we excel in seem to be making a lot of drug, insurance, and health care businesses very, very rich. The proposals I keep hearing about seem to be designed to continue making the same select few richer while continuing to provide us with inferior health care.

My take: The national "universal" health care systems of Canada, France, and Great Britain are not perfect, but they provide better overall quality care with greater flexibility and for less money than we spend, a fact conveniently overlooked by the detractors of universal care. The really odd thing, however, is how those detractors have talked the people of the US , a people who believe they have the best government in the world, into believing the world's best government is incapable of doing a better job than those of Canada, Great Britain, or France.

Are we a people who are committed to having a health care system that is much worse than second best? Or are we a can-do nation that believes in providing its people with a good value for their health care dollars?

I like a government that believes in saving its people money. I believe my government can do at least as good a job of providing health care as our neighbors to the north and in Europe. I believe that government officials who don't believe these things are serve the business interests of health care industry lobbyists over the interests of the people who pay their salaries.

I believe it is time to demand a universal care system.

 

[Martha]

COBRA can be up to 29 months if you are fully disabled. You also might be eligible for social security disability and medicare, but there is a wait for the medicare. Hence the 29 month COBRA. If you are not fully disabled as defined by the social security administration, then you will have to see what plans are offered under HIPAA in your state, such as a risk pool. The cost is unregulated by the feds and may be prohibitive.

 

[RonBoyd]

It seems to me that this smells of some sort of cooperation with the insurance companies to increase their sales by forcing people to buy insurance...

What "forces" people to buy [health] insurance is recognizing that they are not "getting any younger" and a quick glance at their personal resources. One can, of course, "bet against the gods" and hope for the best but for most this is not a very attractive option. Therefore the issue really boils down to whether it would be better to "not need and be forced" or "need and not be allowed" to protect your assets by insuring against disaster.

 

[A854321]

I have to think that anyone who promotes Universal Health Insurance, rather than Universal Health Care is deeply in the pockets of the insurance industry.

Remember, at least 10% of every premium paid and every expense to healthcare providers goes directly into the banks owned by insurance companies and is never paid to beneficiaries or providers.

Insurance companies are just dirty, government-sanctioned banks. They want your money to make money from. Paying for care is just a huge distraction.

We can't possibly make any gains in the system unless we cut out the enormous profit margin for insurers.

 

[Nanita8140]

Ten years ago my father had bladder cancer and his insurance dropped him(he was self employed). He went ahead and got another insurance and they did cover him for everything except any "bladder" conditions. Also, his insureance went from $300 a month to $575 a month. He couldn't afford it, so my brother and I payed for it. Luckily, his cancer never came back. But let's face it people, insurance companies are taking us for a ride. We need something to be done. I am for universal health care...and yes I do understand that "it's not free"...I don't care....everyone should be covered. Pres. Bush talked about sending more aid to Africa for AIDS stricken people....and that may be honorable, but it ceases being honorable when you don't do the same for your own people. My family is covered by husband's work(they take out $200 a month, we have a family deductible of $3000 a year...we are a family of 4)....so, I'm paying for insurance anyways. I want to PAYYYYYYYYYYY.....garnish our wages...whatever...take it...just give us the assurance that when we need it, it will pay up. Now, even with insurance we are not "sure". Look at JOEsxm, with his tin hat on...worried....stop worrying Joe, it won't help...it will make things worse......"you don't want to worry yourself sick"...

 

[free4now]

It's kinda funny that being FIRE actually helps stabilize your healthcare. As the original poster points out workers are completely dependent on their employers for their healthcare. Those who get sick enough that they can't work lose their coverage in many cases.

But now that I'm FIRE'd, I pay $100/month (I'm young) for BCBS high deductible health coverage, and I have the security of knowing that as long as I pay my premiums I'm covered. Every once in a while I will consider getting a temporary job with health benefits, then decide that would be bad because I'd cancel and reapply for my private health insurance after the job ended, with no guarantees I'd be reaccepted.

So perversely, the broken state of healthcare is motivating me not to work !

The reason our healthcare system is so broken is simply corruption. It's run by and for the benefit of the money'd interests.

 

[mickeyd]

Remember, at least 10% of every premium paid and every expense to healthcare providers goes directly into the banks owned by insurance companies

Where did you acquire this interesting piece of data?

 

[youbet]

So perversely, the broken state of healthcare is motivating me not to work

Well, not exactly. It's motivating you to not take a job where a health care policy is part of your compensation. These days, many jobs don't inlcude health care as part of compensation and you should be able to find one easily.

 

[joesxm3]

But now that I'm FIRE'd, I pay $100/month (I'm young) for BCBS high deductible health coverage, and I have the security of knowing that as long as I pay my premiums I'm covered.



I had been thinking as you say that if you have a direct insurance policy then they cannot cancel you if you get a condition. However, the previous poster stating that the self employed person with bladder cancer was dropped by his insurance makes me wonder.

I had previously had a $5000 deductible Golden Rule policy when I was an independent contractor. I continued to carry it even as a full-time employee, but then I dropped it so that I could save $2000 per year by getting on the employer's policy.

I am starting to wonder if I would be better off trying to get that policy back or getting a similar one now while I hopefully can qualify and have that instead of being on the employer policy even though it would cost me several thousand per year more.

There is a slight chance that one of my options on the employer plan is to have 100% of their contribution go to an HSA and then be on my own after that. I will check next week, but I would have to wait until the next open enrollment period to make the change.

Can anyone explain the self employed person being dropped or confirm that once you have the policy you can keep with it as long as you pay the premiums on time?

 

[Insanity]

. . . his [insurance] went from $300 a month to $575 a month . . . My family is covered by husband's work (they take out $200 a month, we have a family deductible of $3000 a year...we are a family of 4) . . .

What people seem to miss in their "cost of health care" thinking is that a lot of money goes into the insurance system on top of the payroll deductions, copays, and deductibles. In Nanita's case, her husband's employer probably kicks in at least as much as (and probably twice as much as) the $200 a month deducted from her husband's pay. That's money that may not be a government "tax," but it's still an expense many of us and our employers are obliged to pay, just as we are obliged to pay taxes.

Then we pay more, through our taxes, for Medicare and other government financed healthcare programs that are intended to help the poorest Americans and the Americans who have a well-earned reputation for turning up at the polls: the 65 and older group. Then we pay more, through charity and healthcare fees paid by the uninsured when they do get sick and which the hospitals use to boost profits and cover losses due to indigent patients and underpaid federal programs.

The point is, we're already paying for the best health care in the world. It's a real pity we're not getting what we pay for. Universal health care is a proven solution that has proven it can deliver higher quality care for less.

 

[REWahoo]

...or confirm that once you have the policy you can keep with it as long as you pay the premiums on time?

The answer to this can vary by your state of residence as well as other factors.

Martha compiled a great summary of private health insurance info in the FAQ section. Take a look at that thread and check out this referenced link to find out the insurance rules for your state.

 

[Rich_by_the_Bay]

Joe, in most states if not all, a carrier cannot drop you as an individual as long as the premiums are being paid even if you get sick. However, they can decide to discontinue a particular line of policies as a whole, and you (along with the entire group falling under that policy) could lose your coverage once your policy expired.

That is another gap I hope gets closed in any future health care reform. Once they insure you you should have protection against losing coverage as long as your premiums are paid.

 

[DallasGuy]

This whole subject is a major pet peeve of mine. I've got one pre-existing condition for a bleeding ulcer that occurred ONE time about 13 years ago. Even 13 years later, the insurance companies still make it a pre-existing condition and it's very difficult to get individual health insurance without a rider on the policy. Some companies even refuse to cover me. NOTE: I have had no other health issues over the years. Something needs to change so that insurance companies are forced to cover all people that can afford to buy health insurance....AND they need to make the pools of people they cover large enough so that the premiums are somewhat affordable for all. Of course, the problem of people not being able to afford health insurance at all is a completely different problem. Anyway, I guess this is one reason I'm leaning towards the democrats in the next election. They seem to be the only party addressing the health insurance issue at this time. The republicans seem to still be of the mindset that we're all "on our own". I don't want a handout, just the opportunity of buying affordable health insurance.

 

[Buckeye]

A few years ago, one of our associates got very close to the $1 million maximum with her premature triplets. If we had not changed carriers, she and her family would have been out of luck for coverage. The $1 million (or maybe it's now $2 million) reset with the new carrier.

We are starting a new policy in 2009 where your spouse must take their employer's health insurance if it is available. A number of our associates have spouses who are being paid (up to $6,000 per year) to not take their employer's health insurance and instead take coverage under our plan.

We also have associates who are (wisely) choosing our plan for their spouse because it is less inexpensive (less than $50 per month for family plus nominal copay plus nominal deductible) than the plan available to their spouse. Unfortunately, we cannot continue our reasonable rates, copays, and deductibles if we are picking up the insurance risk which would normally be borne by the spouse's employer.

We are not a government entity or a large corporation which can absorb the accelerating increases in insurance costs. We are a relatively small, family-owned manufacturing company which is constantly being beat with the "do it as cheap as China" hammer. We are trying to do the right thing by our associates but the normal cost craziness has increased with the cost-shifting companies are now practicing.

 

[Sandy]

Would you be able to get into Medicare early if you were disabled enough to get some Social Security disability payments?

I believe there is a 2 year waiting period between being determined disabled and being eligible for Medicare. So you can collect medicare early - but there is a big gap there.

the execptions are end stage renal disease, amyotropic lateral sclerosis (ALS or Lou Gerhig's disease) and one other specific condition that I can't recall at the moment. If you have one of these and are determined to be disabled, then you qualify for Medicare right away.

As others have pointed out - there are lots of potentially big holes here.

 

[Jonathan Pletzke]

When an employer owns the health insurance policy, it's theirs to do as they wish, and your rights are very few - in state law, in federal COBRA and HIPAA laws. It is better to own your policy (individual, not association group), and then you're in the same rate tier for the rest of your life, no cancellations allowed (by the insurer, that is).

In Maine, Massachusetts, New Jersey, New York, and Vermont, the healthy and the sick pay the same premium, and pre-existing conditions cannot be used to change your rate or exclude you. That said, they also have some of the highest rates in the nation. Other states have few options to buy individual health insurance without medical underwriting, though in Rhode Island you can choose.

We had a local fellow who had employer health insurance, got Lou Gherigs disease, stayed and paid for employer cobra for over 2 years, and got onto Medicare disability, which doesn't cover everything.

There are many issues with the current system. And ways to deal with many of them. Not knowing is the biggest problem. I've got 152 pages on the topic, if you're interested

-Jonathan

 

[mark500]

If I might, the United States has, per capita, the most expensive health care "system" in the world, yet we lag well behind countries spending a fraction as much in every imaginable way. Infant mortality: higher. Life expentancy: lower....

Those statistics are misleading. For a closer look:

http://www.nytimes.com/2007/11/04/business/04view.html

 

[Martha]

If I might, the United States has, per capita, the most expensive health care "system" in the world, yet we lag well behind countries spending a fraction as much in every imaginable way. Infant mortality: higher. Life expentancy: lower....

Those statistics are misleading. For a closer look:

http://www.nytimes.com/2007/11/04/business/04view.html

Thanks for the link. What is interesting is that the author disputes what we think some of the statistics mean, but then gives a misleading explanation. I won't go through each issue in the article because I don't have my resources on health insurance in front of me. However, his claim that a large percentage of the uninsured declined employer insurance is misleading. Some employers offer insurance at rates employees cannot afford. Some employers offer subsidized insurance only to full time employees with part timers having to pay 100% of the cost, which most often is not affordable. He is being misleading by saying that the upper income people, those making more than $50,000, are growing in the ranks of uninsured. True, but he fails to mention that it is families with incomes between $50,000 and $75,000. He also fails to mention that a large number of small businesses are dropping insurance and the difficulty employees are having buying insurance on the open market. He makes everything sound too simple, when it is complicated and messy.

I would like to see his source on the medicaid numbers because more and more people are being dropped from medicaid as the program budget gets tightened. And, you must be not only poor but disabled, elderly or in some cases, with young children, to get medicaid.

His conclusions about cost are almost silly. He, as lawyers say, assumes facts not in evidence. He assumes that outcomes are better because we spend more. When in fact, things are much more complicated than that. He also fails to mention that our country spends more on administrative layers in the health care sector that any other industrialized country.

 

[cute fuzzy bunny]

In other words, he had some info, he had a desired conclusion, and just figured out how to spackle the area in the middle to accomodate.

 

[Insanity]

In other words, he had some info, he had a desired conclusion, and just figured out how to spackle the area in the middle to accomodate.

Yea, that's pretty obvious in statements like this:

The rate of teenage motherhood, according to the O’Neill study, is almost three times higher in the United States than it is in Canada.

The facts are that Canadian teens become sexually active in almost lock-step with their American counterparts; the difference between Canadian and American teens is that they are much more likely to use contraceptives and condoms than their American peers are. In Canada, you see, teens have better access to healthcare, including access to contraceptives, and more compete sex education . . . a health care issue that doctors can chime in on during checkups to make sure teens have the information they need to "play safe" once they become active.

Mr Mankiw fails to mention these details in his argument, but there's a lot he leaves out of his discussion, like how it is that he concludes that the 47 million Americans without insurance figure, a US Census statistic, is vastly inflated. Certainly he offers no documentation or sources to back his claims up.

Sometimes it isn't the information he presents, but the information he leaves out that makes his claims so misleading. His third and last item of debate, that current US healthcare costs are just 16 percent of the gross national income, is accurate, but he neglects to mention that the 2005 average household bill for health insurance was about $11,000 (USA Today, September 14, 2005). That's 23% of the 2005 median household income of $43,000 (Wikipedia), and that $11,000 does not include other healthcare costs like copays and other uninsured costs.

Yes, there's a lot Mr. Mankiw has to say about the good health of US health care. It is sad that his analysis, like statements made by so many other Bush policy wonks (read his byline at the end of the editorial), should perhaps be better known by the documented findings he doesn't bother to mention than the "facts" he tries to create.

 

[cute fuzzy bunny]

The facts are that Canadian teens become sexually active in almost lock-step with their American counterparts; the difference between Canadian and American teens is that they are much more likely to use contraceptives and condoms than their American peers are. In Canada, you see, teens have better access to healthcare, including access to contraceptives, and more compete sex education.

Now all y'all better be careful! I have it on good authority from my government sources that telling kids about sex and providing contraception just encourages them!!! If you dont tell them anything, they wont do anything! And that contraception is no good. Besides encouraging even more evil and sinful premarital sex, it fails 99.285% of the time!!!

 

[joesxm3]

Funny thing - since I made this post and mentioned that I was considering getting my own separate health insurance policy I got a flyer from Blue Cross in the mail advertising some new product aimed at people who want to retire early.

Makes you wonder who watches what goes on on your computer.

I wonder if they classify paranoia as a pre-existing condition