Should I get health insurance?

March 21, 2012 4:13 PM

Should I get health insurance?

Hokay, I've saved up some money and quit my job to work for myself for a while. I attempted to sign up for "Individual Health Insurance", and I've been denied twice so far because of pre-existing conditions. I'm eligible to sign up for COBRA for 39 more days, but it isn't cheap. (400-ish a month, that really cuts down the amount of time I have to make my ideas work). High risk pools are about the same, and apparently PCIP would be the same but I'd have to not have coverage for 6 months to be eligible.

I know this is going to come off as ridiculously careless of me, but I'm absolutely sick of spending time on this nonsense. I'm pretty aware at this point that if I don't get health insurance, any major illness will bankrupt me, but paying for health insurance will do that pretty quickly anyway. What's the difference? Is there any reason to continue to sign up for plans, or is it a big waste of time I'd rather put towards hopes/dreams etc? the pre-existing conditions that I imagine matter are:

Migraines - No medication
An Anxiety/Depressive episode - No medication now, but there was for a bit
Kidney Stones, including one ER visit. - No medication

Oh, I'm 29 years old in Alabama if that's relevant. I'm also running out of companies to talk to that don't seem sketchy as hell to me.

Considering that any new plan won't cover pre-existing conditions until about 2014 anyway, is there any reason to avoid a lapse in coverage?

I would also like to have a plan for how I will go bankrupt if I do get sick. How does that typically happen?

posted by anonymous to Health & Fitness (28 answers total)

I'm pretty aware at this point that if I don't get health insurance, any major illness will bankrupt me, but paying for health insurance will do that pretty quickly anyway

It's not an equivalent cost at all. Something urgent but not life threatening (you get a kidney stone, like you did before! you get hit by a car and break a leg! you get a concussion playing football with the guys! you get pregnant, if you are female!) could cost you thousands or tens of thousands of dollars. $400 a month to avoid that seems worthwhile, unless the coverage is extremely thin.
posted by ThePinkSuperhero at 4:35 PM on March 21, 2012 [4 favorites]

A friend of mine got hit by a car while she was out riding her bicycle and racked up three quarters of a million dollars in hospital bills before she regained consciousness. I searched for plans in AL on ehealthinsurance.com and found catastrophic plans starting as low as $51 a month.

If you've had continuous coverage until now, which the COBRA eligibility implies, you should not be able to be turned down for pre-existing conditions. What companies have you talked to?
posted by KathrynT at 4:40 PM on March 21, 2012

Look into "catastrophic insurance plans" as it's pretty much what you want. You pay a much lower premium, don't get any normal benefits (prescriptions, doctors visits, etc are all paid out of pocket) but it will cover getting hit by a car, etc.

Here's a random web page with a good description: Catastrophic Insurance
posted by jpeacock at 4:43 PM on March 21, 2012

The difference between 'bankruptcy from unexpected medical expenses' and 'bankruptcy from a foreseeable monthly cost' is a) size b) foreseeability. Do you have any idea how much that one ER visit you've had cost you? Or when it might happen again?
posted by jacalata at 4:44 PM on March 21, 2012

I did something similar to you--had some money and quit my job. I got monthly health coverage through Blue Cross. I don't know that much about health insurance, but the Blue Cross here in Michigan is a non-profit--which makes them far better to deal with. I am much older than you, and I get coverage for $300 a month, and it is actually great coverage. I am happy with it.
posted by chocolatetiara at 4:48 PM on March 21, 2012 [1 favorite]

One month into my COBRA I needed an emergency appendectomy. It would have cost $12,000 but with the COBRA it was free. I was 24 and in great health. Just FYI.
posted by BlahLaLa at 4:51 PM on March 21, 2012

Should I get health insurance?

I don't care what all your special snowflake stuff is or how healthy and safe you are... If you live in the United States, the answer to this question is always yes.
posted by magnetsphere at 4:53 PM on March 21, 2012 [12 favorites]

Look into the high deductible plans w/ an HSA. Much cheaper but don't cover much up until $5,000 or whatever you choose. A car accident cost a friend of my $60,000.
posted by no bueno at 5:01 PM on March 21, 2012

Yes. Don't be a damn fool. If you were choosing betwee "food" and "insurance" perhaps it would be different.

However the fact that really cuts down the amount of time I have to make my ideas work in light of I've been denied twice so far because of pre-existing conditions, you're right that any major illness will bankrupt me.

The US health care system is a racket. Yes, somewhere the trustafarian child of an insurance executive may well be snorting lines of blow off a Bentley. The stark reality is that at $400 a month, you will not go bankrupt. You'll have to get another job and put the dream on hold for a bit. Happens to the best of us. Perhaps that's a good test of how much you really want your dream.

Gambling with your health is a big mistake. There is a slight chance it will be the most expensive money you've ever not spent. At least look at catestrophic plans, as have been recommended here.

And I'm not blowing smoke. Back in the day, I was living on a couch without enough money to pay the mobile phone bill, eating dahl like I lived in Mumbai. But I paid the health insurance for six months. One little slip and you'll be chained to the machine for a long, long time.

It's not fair. It's not right. It sucks. It's a blackhole of time. But mate, say it with me: world of pain if shiz goes down and you're caught out.
posted by nickrussell at 5:25 PM on March 21, 2012 [3 favorites]

I was healthy as a horse until, out of nowhere, I got type 1 diabetes as an adult. I cannot IMAGINE paying for this without insurance. With excellent insurance, including prescription drug coverage, I pay about $50-$100/month for meds and supplies and copays.

Being sick is EXPENSIVE.
posted by kestrel251 at 5:29 PM on March 21, 2012

So here's the thing about medical costs. Even when something isn't catastrophically wrong, things get expensive fast. My wife was having some abdominal pain and it was bad enough we went to the ER. They ran a bunch of tests, shrugged, and gave her some Tylenol and told us to come back the next day. She was still in pain the next day, we did the same thing, they did the same thing. Gave her Advil that time and she was better and it went away on his own. Cost was something like $2000 after insurance and everything because of all the tests and doctors and whatnot. For what was, ultimately, a "We don't know" and some OTC painkillers. I can't imagine how much it would be without insurance.

If you're having trouble buying an individual policy, see if you can get a group policy through any professional associations or groups you belong to. I know the Freelancer's Union was very helpful hooking me up with a plan a few years back.
posted by Ghostride The Whip at 5:34 PM on March 21, 2012

Have you contacted Alabama Department of Insurance? It's a government agency.

I did a similar thing: Saved up some money and quit my job. And I have a doozy of a pre-existing that's very inexpensive to control for now. It kills me to write out a $600 COBRA check every month, but for me, it's better than risking complete loss of coverage. My hospital stay a few years ago ran up $14K like a snap -- three or four days for non-emergency monitoring.
posted by mochapickle at 5:45 PM on March 21, 2012

Get the insurance. My mom is an ER doctor and has seen people ruined, absolutely ruined, overnight by these costs. Not to mention the fact that when these bills go unpaid the hospital itself suffers.

The answer is always yes.
posted by sweetkid at 6:01 PM on March 21, 2012 [1 favorite]

I think getting rejected for individual health insurance is pretty much the norm (I've been through this myself). Give the compan(ies) that rejected you a call and ask whether a note from your doctor saying that you are healthy now would help. I had to do this in regards to some previous medical stuff and the insurance company suddenly decided to insure me.

Yes, it is bullshit. Yes, you need health insurance....catastrophic at minimum.

P.S. a Kaiser Individual plan was not very expensive...I think like $180/month compared to the COBRA bullshit.
posted by fieldtrip at 6:34 PM on March 21, 2012

I think maybe the most dangerous thing about not having insurance is that it makes you more inclined to gamble and not go to the doctor/ER in serious situations, which makes you more likely to end up dead.

If you don't get insurance, I urge you to put at least that $400 a month into an emergency fund that you will allow yourself to tap into, no questions asked, if you are concerned about your health. Otherwise you will be all, "I can't afford for this pain in my abdomen to be appendicitis so I won't even get it checked out"... oops, explody appendix goes BOOM.

Being bankrupt is better than being dead, but when you are poor and have no insurance, sometimes that risk seems like it's worth taking.
posted by lollusc at 6:37 PM on March 21, 2012

If you've had qualifying coverage for the last 18 months, you can't be denied because of pre-existing conditions. They can make it expensive as all hell, but they can't refuse you. If you are eligible for COBRA then you probably had qualifying coverage. Did you have it for 18 months? Also, have you looked into converting your corporate plan into a private policy? That can sometimes be the path of least resistance.
posted by COD at 7:35 PM on March 21, 2012

Just a heads-up to read and understand the coverage you buy. There have been people who buy catastrophic coverage with a $5k deductible for $100/month, get cancer and go bankrupt because the majority of the treatment wasn't covered (catastrophic might only cover in-patient treatment, not out-patient).
posted by justkevin at 7:43 PM on March 21, 2012 [2 favorites]

Response by poster: Catastrophic is worth it if you can afford the deductible. I've chosen to go health-insurance-less because I would effectively go bankrupt if I had to pay a $5000 deductible anyway. If you are able to afford $400/month you're probably not in this position.
posted by Anonymous at 10:14 PM on March 21, 2012

When I was between jobs, I went with a short-term health insurance plan. It is not very good coverage, and it won't cover you for longer than 6 months, but it is a whole lot cheaper than $400 per month and will cover you in a catastrophic situation. My plan was with Health Net.
posted by twblalock at 11:51 PM on March 21, 2012

A few points:

Now that you're self employed you may be able to deduct your premiums.

Make sure when you apply for a policy, you let them know that you have X months of creditable coverage from your previous group policy. They may still deny you, but you have a better chance than if they view you as an uninsured individual. As far as I know, the regulations described by others above re not denying you for preexisting conditions relate to employer group policies, not applying for individual policies (I think it's from HIPAA '96).

If you get an indemnity plan, read it carefully - many only provide coverage for services rendered by hospital employees; most doctors at the hospital are operating through their own practices and are not considered employees of the hospital (meaning you would have zero coverage for their costs).

For medications, check the big-box pharmacies in your area for low-cost generic plans (I think Target, CVS, and others have these).

Consider joining the Freelancers Union and see what benefits they can provide.
posted by melissasaurus at 5:09 AM on March 22, 2012

If you've had continuous coverage until now, which the COBRA eligibility implies, you should not be able to be turned down for pre-existing conditions.

This is not true when jumping from an employer-provided group plan to a private, individual policy.
posted by Thorzdad at 6:04 AM on March 22, 2012

It's from the HIPPA Act of 1996.

Title I of HIPAA regulates the availability and breadth of group health plans and certain individual health insurance policies. It amended the Employee Retirement Income Security Act, the Public Health Service Act, and the Internal Revenue Code.

Title I also limits restrictions that a group health plan can place on benefits for preexisting conditions. Group health plans may refuse to provide benefits relating to preexisting conditions for a period of 12 months after enrollment in the plan or 18 months in the case of late enrollment.[2] However, individuals may reduce this exclusion period if they had group health plan coverage or health insurance prior to enrolling in the plan. Title I allows individuals to reduce the exclusion period by the amount of time that they had "creditable coverage" prior to enrolling in the plan and after any "significant breaks" in coverage.[3] "Creditable coverage" is defined quite broadly and includes nearly all group and individual health plans, Medicare, and Medicaid.[4] A "significant break" in coverage is defined as any 63 day period without any creditable coverage.[5]

I have been through this personally on several occasions, going from group plans to individual plans. In every case, my wife's diabetes was covered as soon as we proved that we had credible coverage for the preceding 12-18 months. Granted, the diabetes was priced into the policy, but we were covered. My understanding is that "Group Health Plan" was defined as any company that provides group health plans. So even though you are buying an individual plan from BC/BS, Aetna, United Healthcare, etc - the pre-existing exclusion clause applies. When I bought private BC/BS coverage last year (after getting laid off) I asked BC/BS if we could just agree my wife would be class 3 (their most expensive class) and skip the time consuming underwriting process for her. They were fine with doing that.

This is not true of the catastrophic type plans. They will generally never cover any per-existing condition. Those plans are also not "creditable" for the purposes of showing previous insurance.
posted by COD at 8:30 AM on March 22, 2012 [1 favorite]

This is not true when jumping from an employer-provided group plan to a private, individual policy.

Last year, my husband and I switched from COBRA to an individual, private health policy, in WA state. Once we proved that we had continuous coverage, we didn't even have to fill out a standard health questionnaire; they had no way of even finding out what our pre-existings were. I find it hard to believe they would have waived that requirement unless they had to.
posted by KathrynT at 8:38 AM on March 22, 2012

All I can say is we've been buying private plans continuously for almost ten years now, and every time we jumped from one insurer to another, we had to undergo full underwriting including listing pre-existing conditions.
posted by Thorzdad at 10:48 AM on March 23, 2012

They do underwriting and make you document every Tylenol that you have ever taken so that so they can take your pre-existing conditions into account in your premium. They can and will refuse to cover a pre-existing that you fail to disclose up front. I assume your pre-existings are covered right? Otherwise you wouldn't be plan hopping and voluntarily enduring 18 months of non-coverage on pre-existings with each plan change.
posted by COD at 11:20 AM on March 23, 2012

My understanding is that "Group Health Plan" was defined as any company that provides group health plans. So even though you are buying an individual plan from BC/BS, Aetna, United Healthcare, etc - the pre-existing exclusion clause applies.

This is not true.

HIPAA applies to individual insurance plans, but in a different way. If the individual was eligible for COBRA from his or her last job, in order to apply the creditable coverage clause (that is, to have guaranteed issue in the individual market), the individual can get what is protected under HIPAA - an individual policy with no preex exclusions - under the following circumstances:

How does HIPAA apply when changing from group health coverage to an individual insurance policy?

HIPAA also protects those who are otherwise unable to get group health insurance.

The law guarantees access to individual insurance policies and state high-risk pools for eligible individuals. They must meet all of the following criteria:

** Had coverage for at least 18 months, most recently in a group health plan, without a significant break;

** Lost group coverage but not because of fraud or nonpayment of premiums;

** Are not eligible for COBRA coverage; or if COBRA coverage was offered under Federal or state law, elected and exhausted it; and

**Are not eligible for coverage under another group health plan, Medicare, or Medicaid; or have any other health insurance coverage.
posted by Pax at 11:18 AM on March 27, 2012

Are not eligible for COBRA coverage; or if COBRA coverage was offered under Federal or state law, elected and exhausted it; and

Huh. When my husband and I switched our insurance, we had not exhausted our COBRA coverage. We were electing to discontinue it because it was prohibitively expensive.

I wonder why we didn't have to fill out an SHQ.
posted by KathrynT at 5:42 PM on March 27, 2012

Well, nothing would necessarily require a carrier or state to impose the HIPAA requirements - they just have to be at least as protective of HIPAA guaranteed issue rules.
posted by Pax at 10:03 AM on March 28, 2012