Self insuring is not the same as not insuring, and not insuring is a high risk option for people with even modest assets and income.
States have the option to do the requirements sooner than 2027.
How is it different? If I’m covering my own costs by not insuring, I’m self-insured, right?
The law of large numbers applies. Insurance is about risk management. Self insurance is when you expect the premiums and the claims to be roughly equivalent, and by self insuring you save the margin charged by the intermediary. The key here is you can determine a risk profile that is measurable and statistically significant.
A remote chance that an accident or unanticipated illness results in huge medical bills before the next ACA open enrollment period comes around and you can sign up for health insurance. If the worst happened you could blow through six-figures. How lucky do you feel?
I see not buying insurance as the ultimate in self insuring. Smaller steps in self insuring would be selecting a plan with higher deductible and OOP, one is self-insuring for the difference in deductibles and OOP.
Hmmm. My definition of self insuring is when I don’t have insurance at all, then I’m on the hook for all expenses incurred. I’m not sure I understand how buying any level of insurance is considered self insurance. But I’ve been wrong before!
Unfortunately, if that type of insurance exists, I can’t find it. I’ve found plans that cover critical illnesses only, but their coverage caps are very low.
I worked for a healthcare organization in the past the said they self insured. Well, that was true to a point. They still used an external insurance provider that would insure larger claims from what I was told. And an insurance company even handled all of the claims prior to that. Later, they eliminated the self insured coverage for all claims.Hmmm. My definition of self insuring is when I don’t have insurance at all, then I’m on the hook for all expenses incurred. I’m not sure I understand how buying any level of insurance is considered self insurance. But I’ve been wrong before!
Unfortunately, if that type of insurance exists, I can’t find it. I’ve found plans that cover critical illnesses only, but their coverage caps are very low.
The Megacorp I worked for was also self insured. They also used major insurance companies to do the claims and claims processing.
This would be a best option for us too.
Good point. I was talking about self-pay option.
If you don't mind, can you please share what kind of hospitalization was that? I am trying to get a feel for anything that would be time critical AND expensive. Only things I can think of right now are heart attack and stroke.
I dunno. If I have a risk and decide not to buy insurance and take the risk then am I not self insuring since any events would have to come out of my pocket. Similarly, I am self insuring the amount of the deductible because if something happens then I'm on the hook.
Source: Self-Insurance Explained: Benefits, Risks, and Real-Life Examples.
I agree. What is typical in my experience for large employer plans is that they hire a health insurer to administer their employee health insurance program and pay claims. The employer pays for all claims and a fee to the insurer for administration. In some cases, an employer may also take out stop loss coverage that caps their aggregate claim costs for a given year.
This *is* perverse, and it *is* the main reason that no one should go completely uninsured. Get the lowest cost unsubsidized bronze plan if necessary, or join an organization that offers its members crappy health insurance. Get onto some plan, or you will pay 2 to 10 times more for any hospital services.
I (insurance) had over $1MM of charges presented by Hospital and Dr's. Less than 50% of that was actually paid after the "adjustments, etc).
He was raking some leaves in the yard, age 57 IIRC. He started having stomach pains and vomiting. I was in college and mom was running some errands or maybe visiting my aunt in a nearby town, don't remember. He went inside and kept throwing up, then drove himself to the local hospital with a rag over his mouth.
I’m not so sure it’s that easy. Granted, I’ve never looked into it. I’ve always considered medical tourism as a way to lower purely elective care, like cosmetic. Trying to plan a major medically necessary surgery in another country in a matter of days sounds pretty daunting. Even under normal circumstances without the anxiety of being ill, it would be a challenge.
If I can get my income below the cliff, I’m fine with the cost of my plan. No relocation necessary.
This would be a best option for us too.
Having said that, we could use medical tourism for things that allow air travel and a few days wait time like knee/hip replacement, cancer, planned surgeries, etc. Only thing we would be vulnerable would be heart/brain related emergencies where we may not have time to travel outside the country. Roll the dice? We will reevaluate when I actually retire
FWIW I would be OK to spend $100K-$200K for a time-critical medical emergencies.
