No Healthcare. Bad idea?

July 24, 2006 7:46 AM

No health care! Is this a really bad idea?

I have been on Cobra for the last 18 months so that will be over now. I'm thinking of not signing up with anyone but continue to put away the $400/month that I currently pay and gamble that I don't need healthcare for another 3 years at which time I would have $15K in the bank for medical needs.
I'm self employed, single, 50ish, never needed any medical services, no family history of any health problem. I can afford to pay for any (reasonable) emergency that would in the next three years. This is in MA.
Is this a really bad idea?

posted by Ferrari328 to health & fitness (38 comments total)

Let's say you get cancer. Considering that you've been socking away your money and probably not getting regular tests, your cancer is probably advanced. I don't know what you're going to pay in MA for hospital stay and sugery, but I can tell you that a single shot of Neulasta (to prevent infection between chemo) will cost you $1000.00.
posted by Sara Anne at 7:55 AM on July 24, 2006

It is a really bad idea. In the case of an emergency, even one that is generally non-life threatening (like kidney stones), you could be on the hook for a lot of money. Plus, without insurance, you'll be less likely to receive preventative care.
If you are going to try to go without, I reccommend getting every little problem you currently have (every aching joint, every weird cough) checked out now, just to be safe.
posted by ThePinkSuperhero at 8:07 AM on July 24, 2006 [1 favorite]

Yes. It's a really bad idea.

I read a disturbing statistic recently (of course I can't cite it here) that said that among uninsured people, two-thirds owed more than $2000 in medical bills.

I was one of these people when I was freelancing, and I can tell you that it only takes one emergency to make going without insurance a lousy decision.

This is NOT where you want to try to save money. If you have real medical needs, that $15K isn't going to go all that far. And you really don't want to be deciding on your own whether it's worth the expense to go to the ER with your chest pains. You want to go to the ER and have THEM tell you it's heartburn.
posted by catesbie at 8:08 AM on July 24, 2006 [1 favorite]

This is in MA.

As of July 1, 2007, you won't have a choice.
posted by knave at 8:08 AM on July 24, 2006

You would be taking a considerable risk. The greatest upside would be the 15K you saved. But if anything happens to you medically, you could be down 10's of thousands of dollars. My brother recently spent a week in the hospital to discover the cause of a heart related episode and it cost $93,000. To me, the potential reward doesn't justify that much exposure.

You could do a compromise, where you take a plan that has a very high deductible, and lower monthly payments – where it's a hedge against something horrible, but does take advantage of the fact that you are and probably will be healthy.

I think for a single person in good health, you could pay much less then $400 a month.
posted by visual mechanic at 8:09 AM on July 24, 2006 [1 favorite]

You can find health insurance plans for significantly less than $400 a month that will cover you in case of catastrophic injury or disease. I'd advise enrolling in one of those (although I don't follow my own advice).
posted by goatdog at 8:09 AM on July 24, 2006

I think it is a really bad idea. My husband's parents have been self-employed for their entire working lives and never had health insurance. They were always healthy and paid cash for eyes and teeth, and any other little thing that came up.

About five years ago when my father-in-law was in his early to mid-fifties, he was diagnosed with hairy-cell leukemia. He was completely cured, but the hospital placed a lien on their house. They owed an astronomical amount due to medical bills--from radiologists and oncologists to surgeons, to hospital stay, yada, yada. The good thing is, they are almost done paying off all of the bills. They now have health coverage. What an expensive lesson to learn.

I understand why you would want to do it. You probably won't be diagnosed with a serious disease, but you never know what is going to happen in the next three years.
posted by LoriFLA at 8:09 AM on July 24, 2006

Yes, it's a bad idea. Spend a small amount of that money on catastrophic insurance to keep a lid on problems like cancer and other chronic illnesses that might turn up. You do not want to be in a situation where you have to choose between getting proper medical treatment and going bankrupt. You do not want to be in a situation where you have to go into a bad debt situation for necessary health care and/or worry about losing whatever real property you have. I am also in nearly perfect health, however it turns out I have a small pituitary tumor which -- though unlikely -- could go south at any time. I keep health insurance because I don't want to lose my house if it turns out I need treatment for that.

The good news is, Massachusetts is working on the health insurance thing in a way that may make this easier and more affordable in the near future.
posted by jessamyn at 8:10 AM on July 24, 2006

Ummmmm......exactly how healthy and risk adverse are you?

Simple cost/benefit analysis.

If you are healthy and not adverse to assuming some personal risk, sock away the $400 a month (if you invest it wisely, you can probably make enough to pay any medical bills, regardless of how extreme). Also realize that if it was really, really bad you could get medical treatment and then file bankruptcy to eliminate the medical bills, but you still have to factor that into the analysis, in terms of the inconvenience and lifestyle changes a bankruptcy would mean for you.

If you fall into any other combination of health/risk adverse-ness, you should probably get the insurance. Factor in the monetary value of your worrying about not having insurance (if you would worry at all) as well as the opportunity costs of not doing things you would do if you had insurance (When I was briefly uninsured, I avoided certain activities--kayaking and mountain biking, for instance--that I wanted to do but were high risk. Now that I'm insured, I don't worry about those things).

Visit a couple insurers and find out what your premiums would be, and have them give you premiums for other age/risk categories too. If yours are a lot higher than the other categories, assume that the insurance company (which has access to aggregate data on the health of people like you) might know something you don't, but remember that, ultimately, you have a better idea of your own health than the insurance company will.

Most people hate uncertainty, and are willing to pay the insurance premium so they don't have to do this exercise themselves. That's how the insurance company makes money--they perform the service of eliminating that uncertainty in exchange for cash.

IANADoctor, but I am working on a graduate degree that involves a lot of economics. My program pays for my insurance--if they didn't, I would be going through the same exercise. YMMV.
posted by jtfowl0 at 8:13 AM on July 24, 2006

Just want to point out that, in my experience, if you let your health insurance lapse completely and try to sign up for new insurance later, they often won't cover pre-existing conditions. This doesn't happen if you never let your insurance lapse. Your experience may vary, but this is what i've always been told.
posted by theantikitty at 8:14 AM on July 24, 2006

never needed any medical services, no family history of any health problem. I can afford to pay for any (reasonable) emergency that would in the next three years.

Never needed != "will never need."

It's nice that you're prepared for a reasonable emergency. Unfortunately, human biology isn't always so reasonable.
posted by jason's_planet at 8:16 AM on July 24, 2006

Also, look out for the types of comments posted in this thread. Making an important decision like this based on anecdotal evidence is never a good idea (regardless of what Congress thinks). You hear about the cases of high debt because they stick out in people's minds, not because they are the experience of the average person. Are the extreme cases expressed here representative of the whole population?

I'm certainly nott trying to make light of the situations discussed above. However, it is not hard to see that, in this case, the sample might be biased. You need statistics and probabilities, not stories.
posted by jtfowl0 at 8:21 AM on July 24, 2006

Ack. nott = not
posted by jtfowl0 at 8:21 AM on July 24, 2006

It's a bad idea but there's no real good option for someone in your shoes:

Saving for serious medical care is almost always a poor idea: any serious medical condition -- cancer, severe car accidents, etc. -- will wind up costing you at least one order of magnitude above what you're talking about, and that's before you factor into it the premium charged to people paying their own way (usually 3-10x the price charged insurers). In some ways, you'd be better off spending the money or investing it in assets unrecoverable under bankruptcy procedures, and then declaring bankruptcy after you get the chemotherapy bill or what have you.

Like it sounds, none of this is a great idea, but the point is that in this country serious medical expenses are beyond the financial reach of anyone who has to think twice about whether they could afford it. Moreover, you should be warned that should you go on the 'serious illness only' insurance plan there is always the risk that the insurer won't pay up without serious effort on your part; the likelihood of their balking increases whenever the economy takes a hit in the last couple of years, and when you're not on a group plan (which you won't be once cobra runs out).

So yeah: going without and saving the money is the worst of a bad lot and getting solo coverage the best of a bad lot, but moving to Canada may be a better long term solution to the 'getting health insurance while old and self employed' problem, especially if your work is telecommutable.
posted by little miss manners at 8:26 AM on July 24, 2006

It's not a terrible idea. But make sure to take $75 or so of you $400 and get yourself a Catastrophic Health Plan to cover the major disaster risk.
posted by the jam at 8:30 AM on July 24, 2006

Sign up for a high deductible health insurance plan, which essentially provides catastrophic coverage with lower premiums but a high deductible. If you are seriously injured or contract an expensive disease you will be able to get treatment. Without insurance you may find your treatment options severely limited. You can plan for the deductibles with a Health Savings Account (HSA) which allows you to sock money away tax free to pay health expenses.
posted by caddis at 8:34 AM on July 24, 2006

I work in a hospital, so I'm likely biased, but in my opinion this is a really bad idea. $15k won't last very long if you find yourself hospitalized and in need of medication and diagnostic tests.
Accidents happen. You could be hit by a car tomorrow, or next month, or a year from now.
Being self-employed, there are associations that can lower your insurance cost. My father (in his 60s) is self-employed, and was able to get into a group insurance plan for small business owners which also gives him some pretty decent business and tax incentives.
There are a lot of options to choose from. I'd look into some of the others before choosing between COBRA and nothing at all. If you're really sure that you're not going to have anything happen to you in the next few years, get a policy with a high deductible. Your payments will be lower, and you can put the difference in the bank.
(Obligatory anecdotal evidence: my dad is healthy as can be, and was never hospitalized a day in his life until was run over by a drunk driver a few years ago. Surgery is expensive. So are prosthetic legs. So is rehabilitation, etc etc.)
posted by makonan at 8:41 AM on July 24, 2006

A migraine masquerading as a stroke cost me $14,000 dollars. If that happens to you next January instead of conveniently in three years, you're screwed. Keep your health insurance.
posted by headspace at 8:45 AM on July 24, 2006

I think it's doable, if you:

-Have a safety valve plan to get treatment for problems in a cheap foreign country, such as India or Mexico
-Have at least 200K you can borrow on your house for treatments due to accidents
-Are risk-averse (no skydiving, motorcycles, or the like)
-Above all, maintain *extreme* health standards. BMI less than 25. Limited drinking, no smoking. Low-meat diet. Constant exercise. Wack stress management, with yoga or meditation.

If you can meet these factors, I say, go for it.
posted by Gordion Knott at 8:49 AM on July 24, 2006

I second the catastrophic health plan.
posted by Jonasio at 9:01 AM on July 24, 2006

You should be able to get emergency health insurance for a lot less than $400 a month. ehealthinsurance.com -- worked for me when I was uninsured a few years back.
posted by croutonsupafreak at 9:04 AM on July 24, 2006

Keep the health insurance.

Ambulance rides alone can cost $800 or more. What happens if you break your leg one year? And then get food poisoning the next? Even little things can add up.
posted by schroedinger at 9:06 AM on July 24, 2006

One thing that I've not seen mentioned so far, is that as an uninsured patient, you will likely be charged more than an insured patient's insurance. Insurance companies can bargain down prices, but you can't.

I've seen, on my insurance claim forms, sometimes a 90% discount for the insurance company. Something that you, as an individual, will not get.

I would get at least a catastrophic health plan.
posted by nightwood at 9:07 AM on July 24, 2006

Unbelievably bad idea. You will certainly be charged far more for any treatment or service than a "negotiated" rate between a hospital and an insurance company -- and in the case of an emergency, those negotiated rates can be sky-high to begin with. I had jaw surgery a year and a half ago, and began bleeding uncontrollably during surgery. I ended up doing a 4-day stint in ICU that probably cost close to 100 grand. A buddy of mine broke his neck in a hockey accident a few years ago and was in for a month, reconstructing his spine and learning how to walk again. Cost? Several hundred grand, maybe even seven figures.

There's a reason catastrophic medical costs are one of the leading costs of personal bankruptcy. Don't be stupid: gthe insurance if you can afford it.
posted by scody at 9:27 AM on July 24, 2006

My knowledge of my own psyche suggests that I would continue to go without health insurance forever if I let it lapse, and you're still a long way from Medicare.
posted by ZippityBOP at 9:56 AM on July 24, 2006

For a male, by one's mid-50s there are enough conditions to be screening for on a regular basis that the insurance you have should be necessary just to cover that.

Cholesterol, blood pressure, prostate exam, a colonoscopy every few years starting at 40, a blood sugar workup, to name a few.

Most men have a very different relationship with the medical profession than women, and it is not unreasonable for a man to avoid the doctor entirely from age 18 to 35.

But at some point around 35-40 there are enough conditions - serious but treatable conditions - for which you can be screened, and whose outcome has been proven to be better with early identification, that the salad days of the 20s and early 30s should be put aside in favour of at least annual checkups
posted by mikel at 10:05 AM on July 24, 2006

Terrible idea, for all the reasons listed above.

Also, if and when you have a serious medical crisis and have to draw on your savings, you also won't be working and won't be saving. (And disability insurance for freelancers is fantastically expensive.) Even if you don't need medical care in the next three years and your $15K covers the immediate problem, you'll be bare-ass naked for any new disasters.

Get high-deductible catastrophic, at the very least. Many professional societies (Writers' Guild, etc.) offer group rates, or there might be something like the Freelancers' Union"> in MA.
posted by vetiver at 10:19 AM on July 24, 2006

As always, insurance that covers common little things (teeth, personal doctor, MOST medication) is never going to be a better value since you are basically transferring money through a third party for it.

However, insurance that covers catastrophic things ($200,000 heart surgery for example) is always a good deal.

It's the same way that car insurance is a complete rip-off except for the rare hit-and-killed-a-disabled-child type of thing. But home insurance against your house burning down / exploding / etc is always worth the dough.

So, no, don't go without ANY insurance. Just get the bare minimum to cover anything major, let's say anything over $10k.
posted by shepd at 10:44 AM on July 24, 2006

Because of the law cited by knave and jessamyn, this whole discussion becomes moot; you can't go three years without insurance in MA. You can let your insurance go, but next year, that law will force you to buy insurance. If you've developed any health problems in the period you were uninsured, your new plan won't cover them.

Find yourself the lowest-cost plan you can until next year.
posted by Kirth Gerson at 10:50 AM on July 24, 2006

You can let your insurance go, but next year, that law will force you to buy insurance. If you've developed any health problems in the period you were uninsured, your new plan won't cover them.

Well... you'll still be able to be uncovered if you choose, you'll just pay a small fine for it (surely less than the cost of the cheapest insurance, though).

Also, there are no pre-exisiting condition exclusions in MA individual health insurance products. From the MA Attorney General: "Your premium rate may only be altered a limited amount based on your age and geographic location. Unlike group plans, individual health plans cannot exclude coverage of per-existing conditions and cannot impose waiting periods, but you may have to wait for the next open enrollment period to sign up."

A final note: while insurers are allowed to have pre-existing condition exclusion in group plans in MA, you are unlikely to see one unless you're covered by a large out-of-state employer. The major insurers in MA won't write a plan with a pre-ex.
posted by ZippityBOP at 11:06 AM on July 24, 2006

For those readers not in MA, I would like to add that once you lose your health coverage you may never be able to get it back. I let mine lapse fifteen years ago, and have now been turned down seven times. I have asthma which is under control, but the drugs are expensive, so no company will agree to insure me. The state-mandated insurance has a two-year waiting list, is $1200/month, only lasts three years, and only covers catastrophic illness and hosp. I spend $450/month on prescriptions now, and never go to the doctor or dentist unless it's an emergency. Don't lose your coverage!
posted by shifafa at 11:27 AM on July 24, 2006

Bad idea, bad idea, bad idea!!!

A few years ago when my COBRA ran out and I was living in MA, I found it really easy and relatively affordable to sign up for MEGA Health Insurance. It's not a ton of coverage; just what you need, which is to limit your financial risk in case of the unforeseeable.

There are some places (the Tufts Health building downtown, for one) that won't even let you IN without insurance. Even a lame-o plan that won't cover anything routine is going to be great for getting you in the door when you're willing to pay $200 just for the dermatologist to give you some peace of mind about that mole that suddenly starts misbehaving.
posted by Sprout the Vulgarian at 12:04 PM on July 24, 2006

never needed any medical services, no family history of any health problem.

I assume you're also allowing for the possibility of accidents? Your family health history has no bearing on your falling and breaking your ankle in three places, as I just did.
posted by JanetLand at 12:12 PM on July 24, 2006

I second, third, fourth, fifth the catastrophic plan idea. Not having anything is a very very very very bad idea.

It sounds like you're interested in self-insuring, which is actually a very viable option. There are many really good doctors who have opted to step out of the insurance system and accept payment cash-in-hand, which is often at much cheaper rates than what your doctor usually charges the insurance companies. Even your current doctor may bump his rates down to work with you on a cash basis.

You can actually combine a tax-beneficial "health savings account" (a tax-free investment account) with a special catastrophic insurance, which is what I've been considering. I'm appalled at some aspects of the coverage of these plans, but it's a strong idea for those of us that want a foot or two out of the insurance system.

Whatever you do, don't let your coverage drop completely for even a day. If you do, and you get really sick that day, you'll be un-insurable forever.
posted by squishy at 2:46 PM on July 24, 2006

Jtfowl0's dislike of anecdotes aside, here's mine: a friend who decided to be uninsured in his 20s needed his appendix out. A fairly simple procedure to remove a useless organ but if it ruptures you could die. It took him almost a decade to pay back the $9,000 the hospital insisted he pay for. I don't know for certain but you can bet he also paid a notable amount of interest on top of that, resulting in a cost more like $12,000.

The point being there's any number of things that could dwindle that $15,000, particularly as you head on towards sixty and things like the possibility of prostate cancer necessitate things like PSA tests.

There's no doubt that ABSOLUTELY self-insurance is always more economically advantageous but modern medicine requires an amount of money that's prohibitive for most people to accomplish it.

You're up against something similar to what a friend of mine called The Club Phenomenon. If every other person on the block has The Club on their car then you need to as well, since you're now the attractive target if you don't. In health care you're looking at having to pay out-of-pocket for what most people are having covered by insurance, resulting in very little price pressure for providers. And as others have also said, people covered by insurance get negotiated rates you may not.

Spend the money.
posted by phearlez at 3:17 PM on July 24, 2006

Whatever you do, don't let your coverage drop completely for even a day. If you do, and you get really sick that day, you'll be un-insurable forever.

Um, nope. If you let it drop for 62 days this is true, assuming you're a USian and subject to HIPAA.
posted by phearlez at 3:18 PM on July 24, 2006

Phearlex- I didn't know that, but it's really interesting to know. Is that true even if you're switching insurance agencies?
posted by squishy at 3:48 PM on July 24, 2006

To finish this discussion, here's what I have found out. Catastrophic health coverage is not available in Mass. High deducible non group coverage was offered by Blue Shield with a $5000 deductible but that was only $50/month less than the normal plan. Best solution was to join the Small Business Service Bureau and get insurance there. Harvard Pilgrim, 2K deductible is $370 a month.
I was also contacted by Cornerstone Affiliates Mid-West Nat'l Insurance and if it sounds to good to be true, beware. Thank god for Google!

Thanks for all the input.
posted by Ferrari328 at 8:59 AM on July 31, 2006