Help me buy my own health insurance.
April 29, 2013 10:38 PM   Subscribe

I'm self employed. I need health insurance. My main concern is a random ER visit that will put me in debt for the rest of my life, so I told my wife not to worry about deductible prices, since I only need to go in once every few years anyway. She found something with a $4,000 deductible. And that was like $80/mo. The other ones were even more expensive. Is this price range right? Is this the only way to protect myself from crippling debt?
posted by brenton to Work & Money (31 answers total) 18 users marked this as a favorite
$80 a month is dirt cheap for health insurance. $4000 is a high but not uncommon deductible.
What is the MOOP? (Max Out Of Pocket per year?) and check the drug coverage also.

Yes, health insurance is expensive. But it will pay for itself in one broken leg or a single case of appendicitis.

God luck navigating these waters.
posted by SLC Mom at 10:46 PM on April 29, 2013 [4 favorites]

i've used to compare health insurance plans for individuals. it's a HUGE help.

and yes, $80 / month is very cheap for health insurance, especially for a $4000 deductible.
posted by guybrush_threepwood at 10:47 PM on April 29, 2013 [4 favorites]

Response by poster: Ok, how is a $4,000 deductible a reasonable amount. Sheesh. I mean, get sick in a way that requires a few doctor visits with MRIs or whatnot, and you're out a lot. Dang! I will definitely look at max per year. What should I look for in drug coverage?

I was really spoiled on my last employer health plan, I guess.
posted by brenton at 11:08 PM on April 29, 2013

I haven't tried this myself but a friend mentioned it
posted by dottiechang at 11:11 PM on April 29, 2013

One other thing to keep in mind is that if you can pay cash for routine doctor's visits (physicals, "hey I think I have bronchitis", those sorts of visits), you can check to see if your doctor's office will either give you a discount for paying cash, or let you pay on a payment plan, or both. Many offices give a cash discount, because it saves them so much time and effort from trying to get money from the insurance company.

Drug coverage - it depends on your needs. Do you have any chronic conditions? Make sure the meds you need for them are covered. Most plans cover generics, but if you *need* a name brand, they'll get you over a barrel. I'm in that situation now. No fun. Most antibiotics and things along those lines will be covered by a plan that covers generics.

My deductible is $2500 a year, and I work for a large corporate entity. It's just a racket, man, plain and simple.

$80/month is an awesome price, but you'll need to figure out a way to bank the deductible.

Also, you can always push back on stuff like MRIs. Ask if it's REALLY needed to diagnose the issue.
posted by RogueTech at 11:33 PM on April 29, 2013 [1 favorite]

my MRIs cost around $3000 each a few years ago so you would likely hit your premium really quickly with any accompanying blood work and doctor visits if you were to get sick and need an MRI or two.

$80 a month is dirt cheap for that deductible compared to what i'm paying. my deductible is comparable.
posted by wildflower at 11:37 PM on April 29, 2013

This won't help you right now, but the good news is that starting in 2014, Obamacare could be a significant help to you and other self-employed folks. In particular, each state will have a health insurance exchange, which is a online marketplace where individuals - including those who are self-employed - can compare health plans. Depending on how much you earn, you might be eligible for a tax subsidy to help you pay for it. It looks like you're based in California - their health exchange is called Covered California.
posted by purplevelvet at 12:09 AM on April 30, 2013 [3 favorites]

I'm self-employed too, and that's in line with (indeed, cheaper than) the insurance I found. And yeah, it sucks. I'm hanging in till 2014 when Obamacare kicks in.
posted by zompist at 12:19 AM on April 30, 2013

If you think $80/month is huge, you should probably look again at your previous employer's coverage. Your share may have been smaller than that, but I'll bet how much they paid was significantly larger, or your insurance wasn't nearly as good as you thought it was.

For comparison, I'm young and healthy, and am paying ~$240/month for a $1000 deductible plan. Going through my work costs $500-$600/month to insure me at about the same level of coverage because I'm lumped in with much higher risk groups.
posted by Metasyntactic at 12:23 AM on April 30, 2013

A $4,000 deductible is reasonable in the sense that it (hopefully) wouldn't be financially catastrophic (bankruptcy, lose your house, etc.). It's also a trivial sum of money when you start using Hospital Math. Without insurance, you can easily get in an accident and before you're even awake again you've run up bills so big that you'd need an armored car to pay them in cash. That $4k deductible will be gone before you're even out of the emergency department.

Finding out the MOP is pretty important because if you get sick, go to the hospital, go home, get sick again, go back to the hospital ... that could trigger the deductible twice, depending on how the policy is written. But your exposure is limited by the MOP, so I've always thought of it as being the more important number than the base deductible. Beware of any policy that advertises the deductible, especially a low deductible, and buries the MOP if it's much higher. That has always seemed shady to me, even for health-insurance companies.

Anyway, if you've previously had an employer-paid policy that was more of a sunshine-and-rainbows "we keep you healthy" nicey-nice sort of deal, you should basically forget all that stuff. When you go out on the open market as an individual, at least at the price range that normal humans can afford, what you're buying is insurance, and I think it makes sense to look at it in that light, not (as their marketing materials like to suggest) as a "health plan." You're paying $80/month for basically one thing: to avoid the risk of complete financial ruin due to an accident or medical emergency. Whether or not that's a good deal is up to you, although I think it's pretty reasonable for the market.
posted by Kadin2048 at 12:25 AM on April 30, 2013 [9 favorites]

I have a $5 k deductible policy and I pay 100% until I reach that amount; then everything else in network is covered (so far-it's insurance, so that's always up for grabs).

I compared quotes for all types of policies, including adding up all premiums and out of pocket expenses, and the high deductible made sense for me. (Note that I try and never use it and put off all but necessary stuff. YMMV.)
posted by mightshould at 2:16 AM on April 30, 2013

freelancers Union doesn't work in California. personally, I think Kaiser's the best deal for freelancers who aren't eligible for any of the Guilds--WGA, DGA, SAG.
posted by Ideefixe at 2:18 AM on April 30, 2013

I pay $270/month with a $10K deductible for my daughter and me. Instead of getting a lower deductible I am putting the extra monthly cash into an HSA.
posted by waving at 2:19 AM on April 30, 2013

Ok, how is a $4,000 deductible a reasonable amount.

Because with a lower-deductible health plan, you would be paying $300-$500/month for health insurance. Budget $300-$400/month for health insurance. Pay $80 for the premium, put the other $220-$320/month in an HSA.
posted by deanc at 4:12 AM on April 30, 2013 [7 favorites]

I pay ~1.5 times that as my share (my employer covers much more) for a plan with a $2K deductible and co-insurance up to a $5K out of pocket max. I agree that this seems low. I would definitely check the out-of-pocket max and any annual or lifetime coverage caps or exclusions.

One other thing to keep in mind is that if you can pay cash for routine doctor's visits (physicals, "hey I think I have bronchitis", those sorts of visits), you can check to see if your doctor's office will either give you a discount for paying cash, or let you pay on a payment plan, or both. Many offices give a cash discount, because it saves them so much time and effort from trying to get money from the insurance company.

This is true. However, if you have insurance, you still want your doctor to submit the claims to your insurance company, even if you know they won't pay anything towards them. The insurance company may have negotiated lower rates with the provider. I have a bill sitting here from last month -- my doctor's office billed $36 for a rapid strep test and $205 for a five-minute visit with a physician's assistant. While my insurer didn't pay for anything, they did make the provider knock the price down to their negotiated price of around $125 total for me, which is a huge difference. And because the claim went to the insurer, that $125 is counting against my deductible and out-of-pocket max.
posted by pie ninja at 4:13 AM on April 30, 2013

A $4000 deductible is pretty common these days. Go back ten years and that would have been considered a high deductible. Today, "high" seems to refer to deductibles in the $8000 range.

$80/month is crazy low, though, even for an individual policy at that deductible rate. I'd be studying the fine print on that policy to see what isn't covered, or what limits are being imposed. I'd also look carefully at what out-of-pocket expenses you'd be saddled with, or what expenses you pay up-front and apply to your deductible.
posted by Thorzdad at 5:13 AM on April 30, 2013

After I posted, I got to thinking about that $80/month policy some more. One thing you need to ask whomever is trying to sell you that policy, is whether they allow "balance billing" from the provider.

Balance billing is an odious form of "insurance" where the insurer hasn't any actual negotiated fee schedule with the provider. What happens is, the insurer will tell you that they cap the cost of medical Procedure-X at a limit of $$$. They make it sound like any other insurance, where the accepted price is negotiated with the provider. However, with a balance billing scheme, what it really means in the insurer will only pay $$$ on Procedure-X, but the provider can bill you directly for the balance of the actual cost of Procedure-X.

Thus, if the provider's bill for Procedure-X is $$$$$, and the insurer caps their payout at $$$ (which includes your deductible btw), the provider will then bill you for the $$ balance due.

These policies sound great, cost-wise, up-front, but can end up sticking you with a mountain of medical debt. So, definitely make sure this $80/month policy isn't one of these.
posted by Thorzdad at 5:29 AM on April 30, 2013

I used as well when I had 3 part-time jobs. My deductible was I think $1000 and I paid $150 a month. It was not the best plan for me - the copay ($35 for a regular doctor visit, $80 for a specialist, and $30 for a month's worth of prescription drugs) was often out of my reach, but it was the best I could afford. $80 a month would have been a godsend but I wouldn't have taken it knowing that there was no way I could afford much more than a $1000 deductible.

I would advise you to go with what you can afford for doctor's visits and prescriptions.
posted by chainsofreedom at 5:41 AM on April 30, 2013 [1 favorite]

You might want to check what people's responses were when this question was asked previously. A lot of those still hold true. As I said there, the best way to lower costs is to figure out some way to increase your pool size.
posted by Runes at 5:55 AM on April 30, 2013

Usually a plan that has a $4,000 annual deductible is paired with a Health Savings Account. (HSA). HSA's are pretty cool. You contribute pre-tax dollars to the account and they can stay there until you need them. Unlike an FSA, you can keep the money there forever.

You can withdraw from the HSA for any health related expense, except OTC medications. So dentist, eye doctor, Rx drugs, etc.

The other benefit is that although you're paying out of pocket for regular stuff, it's at discounted, negotiated rates. For example, your doctor may typically charge $60 for an office visit, but for you, with your plan, it's $30.

Although it's not golden, if you know what you're dealing with and can plan accordingly, it's pretty darn good.

I had a simple procedure last year. And the expenses of it were pretty high. It was $18,000 for everything, of which I paid $4,400 from my HSA. I'm replenishing now, but I'm pretty glad that I had everything covered.
posted by Ruthless Bunny at 6:26 AM on April 30, 2013 [1 favorite]

Seconding Thirzad's comment about balance billing. It's something to watch out for.
posted by SLC Mom at 6:48 AM on April 30, 2013

Also keep in mind that your standard well-person visits are going to be covered under the Affordable Care Act. I have a high-deductible plan ($2500 deductible, $5000 out of pocket maximum) and have been to the doctor twice this year for routine visits (physical and well-woman exam). I have paid exactly $24 for some lab work that wasn't totally covered.

Now, if I get sick and need to see the doctor, I'll pay the full (negotiated) price until I reach my deductible. But I don't get sick often. I'm putting the extra I'd be spending on health insurance into an HSA against the day I do get really sick.

And yeah, one ER visit or hospitalization and you'll reach that deductible FAST. Look at the terms of coverage between hitting the deductible and the out of pocket max -- 10% coinsurance? 20%? are there penalties for going out of network? Those things are important, too, since in many cases, you'll spend a lot more time in that grey area -- it can take longer to reach the out of pocket max when you're paying 10% here and 20% there, and in the meantime, you're dipping into your own funds to pay those coinsurance fees.
posted by devinemissk at 7:14 AM on April 30, 2013

$80 a month is really low - as others are saying, it's so low that I'd be concerned it's not actually worthwhile (I'm pretty sure "lifetime limits" are no longer allowed under the ACA, but that's a big one to look out for).

Why would they charge you so much when you've got that crappy-looking $4000 deductible? Let's do the math. Imagine you have this insurance for 10 years. You would end up paying the insurance company around $10,000, total, for those 10 years. Imagine ONE TIME in those 10 years you end up hospitalized for a week, or you needed a couple of orthopedic surgeries. That would likely cost the insurance company ~$30,000 (minus your $4,000), meaning they just lost $16,000 on you. That's assuming they had no other costs associated with your policy, which is of course not true.

Health insurance is expensive in the US in large part because health care is expensive in the US. And those of us who have employer-sponsored health plans are so insulated from those costs, we just have no idea what's going on. I pay ~$60 biweekly for employer-sponsored insurance and that is only 25% of the actual premium, my employer pays the rest. That's like $500 a month for fine-but-not-Cadillac insurance.
posted by mskyle at 7:21 AM on April 30, 2013

I pay something like $100 for family coverage on a high-deductible plan. $6000 family deductible. I throw another 150 or so into an HSA, and my employer fills the rest of the HSA for me. I'm $250 OOP each month for health insurance, and I pay every bill up to $6K myself out of my HSA. Anything left in the HSA rolls over to the next year.

My alternative was traditional HMO-style insurance with a co-pay. In that case, I'd pay $250 a month, and every doctor visit would have a $20 copay or whatever, and aside from that I'd never see a bill. However, if I never go to the doctor, I'm paying $6000 regardless.
posted by chazlarson at 7:50 AM on April 30, 2013

Agreed with others that $80/month is such a low premium for individual health insurance that I think it is worth checking out the fine print (which you should do with any plan, but still). It is possible that something that cheap would only be catastrophic coverage, ie, they don't cover anything except major hospitalizations and things like that. You might have to pay out of pocket for all of your doctor visits and medications. Check the details.

My anecdotal example: my friend has individual coverage in California. She pays $210 a month and has a $2,500 deductible. But her coverage for anything more than standard office visits and generic medications is really shitty. They don't pay for lab work at all, for example. So it's fine as a stopgap solution to make sure she doesn't incur insurmountable medical debt if she gets in a car accident or something, but it's not great as a long-term solution.
posted by bedhead at 7:57 AM on April 30, 2013

You, and the insurance companies, are balancing the amount you'll definitely pay now (premiums) vs. the risk of having to pay a bigger amount later. Both of these costs compare favorably to the risk of having to pay for the whole thing yourself, should a catastrophic medical event happen.

$4000 deductible is expensive, but it won't bankrupt you unless you have to stop working, in which case you have bigger problems to focus on. If you had to replace your car tomorrow, you'd be in the same boat. Any hospital and insurance company will work with a payment plan; at no point will there be a critical demand to pay up right now.
posted by Sunburnt at 9:03 AM on April 30, 2013

Have you actually applied for and been approved for $80/month? I've found that a lot of insurance companies seem to enjoy the bait-and-switch approach. They advertise their cheapest plan, and then once you tell them all your detailed personal health information they tell you that you don't qualify for that plan and you have to apply for something else.

It's not possible for people outside your state to compare insurance costs with you, because marketplaces, prices and laws vary WIDELY by state. But in Oregon, I've been unable to find insurance for my husband and I for less than $650/month (so $325 apiece). Lots of plans exist that are cheaper than that, but they all have rejected us.
posted by croutonsupafreak at 9:23 AM on April 30, 2013

Is this price range right?

I think you have unrealistic expectations of the cost of health insurance. The price range doesn't sound right to me; not because it is too high but because it is too low. I wouldn't expect an $80 a month insurance policy to be worth the paper it was printed on.

For comparison, my low deductible plan was jacked up to something like $800 a month a year ago. Needless to say I changed to a high deductible plan. It still costs around $300 a month.
posted by Justinian at 11:28 AM on April 30, 2013

I pay more than $80/month for employer provided health insurance, and Cobra will cost me something like $600/month.

You have a really unrealistic idea of how much health insurance costs. I agree with ideefix that Kaiser has the best deals for freelancers in CA.
posted by ablazingsaddle at 11:48 AM on April 30, 2013

You can go through a health insurance broker, which I have just done; it's really easy. For a family of three, we are paying about $700/mo with a $2500 deductible. It's not fantastic, but reasonable.

I don't think you realize how much of your insurance your employer was paying. After I left my employer and started paying COBRA, my share went from $60 to $480/mo.
posted by Specklet at 12:48 PM on April 30, 2013

At $80/month,even with the fairly high deductible, as others have said you really need to study the fine print. Make sure it's not a "mini-med" policy that limits your benefits. My daughter had student health insurance for a while that limited inpatient payments to a few thousand $/year, and even less for outpatient care. Any services you need above those limits are your problem: not covered. (The ObamaCare protections against this kind of junk don't start until January, 2014.)

Thorzdad's warning is an important one, too.
posted by Snerd at 5:26 PM on April 30, 2013

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