Medical Insurance: Anyone self-insure?

Devil's advocate:

You'll ONLY (I know) be without coverage for a year because if something really bad happens you sign up the next year and they can't deny you. (yes you can die or be on the way to bankruptcy in a year.)

My experience:

I had the 'cadilliac' plan when I worked at Ford and it paid for my kids to be born and Doctor's visits for every little sniffle.

Went to a cheap catastrophic plan and paid out of pocket when I started my business..."liked" that setup. Did that for a few years.

That was outlawed.

Went to Liberty Health Share and they paid for a lot...we liked it. But they started having major growing pains and didn't pay for maybe a year and the prices went up to regular insurance rates. Sort of a hassle dealing with the admin people on both sides of that.

Started offering a Health plan to my employees and we're on that....I don't like the price and thought I'd never pay it...but here I am.

High Deductible HC plan here, and I don't mind it.  

It's basically the closest thing to what I consider a *real* "insurance" policy.  That is, I pay for most care out of pocket; the plan is there to cover my ass if something catastrophic happens.  Just like a car- you pay for car washes and oil changes, and insurance covers you if a drunk lady in an Altima hits you while texting.  

Mrs. VCH and the two little VCH's are on the plan.  The "family" rate didn't ask how many offspring; those with fewer kids effectively subsidize those with more.  

Ultimately we make a lot of choices in life, and those choices affect everything- including our health.  I won't argue that some people get dealt a E36 M3 hand with their health- but others seemingly go out of their way to sabotage it.  We're a car group, and I imagine many of us could tell you, within +/- 500 miles, when their car is due for an oil change.  Do we take our body's health as seriously?  We spend a pretty high amount on food every month- our weekly grocery bill is anywhere from $200- $300.  That's because we buy good, healthy food, minimally processed, organic, and from trusted sources whenever possible.  We could skimp, but how would that affect our health?  How do you put a price on that?

The HSA is, of course, a big part of the plan.  We max it out.  My employer also allows us to contribute to an FSA, which, when combined with the HSA, becomes an LPFSA- Limited Purpose Flex Spending Account.  Basically, it's money you contribute that can be used only for dental and vision expenses.  Only $610 can be rolled over, the rest is use it or lose it, so you have to figure your vision and dental expenses somewhat carefully.  Like the HSA, it is un-taxed money- pre-tax from your paycheck, and untaxed when you use it.  The 2024 contribution limit on the LPFSA is $3050.

Something many people don't understand about the HSA is that you don't have to use it in the calendar year the expenses are incurred.  Save your receipts, pay your bills out of pocket, and keep the HSA as an emergency savings account.  Also, you can invest it to let it grow even more.  $8300 per year is the 2024 HSA contribution limit for a family- if you can afford to save that, and pay your medical bills out of pocket, when you go to retire you'll have a really nice pot of money to help cover expenses- or a big chunk of money you can withdraw tax free (assuming you kept your receipts, in case the IRS comes asking)

I've got a HDHP with an HSA. I really like it, and I wish I had it when I was raising kids. 
 

We don't have a lot of health issues, so we really don't have to dig too far into the deductible, but it would save our ass in the event of something catastrophic. 
 

Meanwhile, the HSA is pre-tax savings that I get to control and use for whatever health related thing I chose (glasses, chiropractic, dental, counseling, or whatever). I think I could even use it for the deductible if something catastrophic happened. 

In reply to jmabarone :

10 years ago my wife, who literally never even had the the flu--needed open heart surgery and heart valve replacement 

Apparently an old dental procedure caused an infection which damaged a heart valve.

The total cost was $247K.  I had recently gotten a new job and only qualified for HI the month before.

Like others have said it's a huge risk. 

PS: Also don't you drive fast at times? Just sayin...

Steve_Jones said:

In your original post you mention $2500 in premiums, is that a year? If so, that's a screaming deal, and trying to go cheaper with 7 kids would be tough. I can't imagine how expensive every day is with 7, and planning more. You realize 1 birth will be way more than $2500, right?

Yeah, I realize that is confusing now.  the $2500 would be premium for just me.  Family plan is $9500.  

In reply to jmabarone :

Unfortunately, that's part of the trap for the ACA. It requires affordable insurance for employees, but not for their families. 
 

But you can spend HSA funds how you choose. 

SV reX said:

In reply to jmabarone :

Unfortunately, that's part of the trap for the ACA. It requires affordable insurance for employees, but not for their families. 
 

But you can spend HSA funds how you choose. 

Don't worry, I'm sure they'll fix that when they overhaul the ACA...

My employer pays a part of our coverage, for our family of 4 the HDHC Plan runs me about $110 per pay period, so roughly 3K per year.  Compared to the OP, that sure seems like a screaming deal.  The conventional plans start at $300 per pay period and go up from there to around $600 or so.  (10,000 to 15,000 per year).  I basically look at the HSA as saving the difference between the cost of the two, and having the money be mine instead of being paid to an insurance company. 

volvoclearinghouse said:

SV reX said:

In reply to jmabarone :

Unfortunately, that's part of the trap for the ACA. It requires affordable insurance for employees, but not for their families. 
 

But you can spend HSA funds how you choose. 

Don't worry, I'm sure they'll fix that when they overhaul the ACA...

My employer pays a part of our coverage, for our family of 4 the HDHC Plan runs me about $110 per pay period, so roughly 3K per year.  Compared to the OP, that sure seems like a screaming deal.  The conventional plans start at $300 per pay period and go up from there to around $600 or so.  (10,000 to 15,000 per year).  I basically look at the HSA as saving the difference between the cost of the two, and having the money be mine instead of being paid to an insurance company. 

This year, we (my election) went from a conventional insurance plan (lower deductible) to the HSA plan.  Took the difference and loaded the HSA, plus employer contributions, has been pretty decent at keeping up with our expenses (maternity services notwithstanding).  My understanding is that my employer covers 2/3s of the premium for the workforce.  

03Panther said:

In reply to SV reX :

I'm not sure either

In 97 I went to the hospital with a kidney stone  with no insurance  Cost me $1200  
Two years later, I went again for exact same conditions. With insurance. My out of pocket expenses were, yep  $1200  

no clue what any of that means, but, there it is  

 

Yep.  I've been there as that seems to be normal with a high deductible plan - which is essentially "catastrophic event" insurance.  The general idea is you pay into an FSA or HSA and then pay for the deductible out of that for whatever regular visits you may make or for the occasional mild illness.  Or you're like me and use the HSA as another retirement account and pay for everything out of pocket.  My company also offers a Health Spending Plan (or something like that) which is the "donut hole" system where the employee pays a certain amount, then the company covers a certain amount, and then the employee pays for the rest up to the deductible.  I've personally never used it since as when we went to a HDHP over a decade ago, I went with the HSA option.  Mainly for the retirement/tax benefits and I've built up a decent amount by not using it. 

I get the impression insurance companies and providers DO negotiate bills and whatnot.  At least that is the impression I got after I separated my shoulder in late 2020 and had to visit the local hospital ER.   It took the hospital until the Summer of 2021 to send the last bill to me and totaled up I paid around $2000 - which is nowhere near my deductible. It's not easy to determine what the insurance paid if anything.  Considering everything that happened in the ER and what the staff did, I'm a little surprised I only paid that amount. 

As far as the OP self-insuring/paying, it seems really risky with so many family members. I agree with previous sentiments about how comfortable you are with bankruptcy as a financial tool.  But at the same time, I'm not sure how many times that tool can be used. 

My youngest spent his first 10 weeks in the NICU... He was a Million dollar baby, and that was 25 years ago.

So to throw another wrench into things, as I didn't know about my cancer when this thread was fresh. 

I've been generally healthy my adult life. Overweight, a smoker, drink a little much on occasion, but my bloodwork and vitals have always been good. Like surprise the doctors good. I went years without insurance because every job I ever had that offered it would fire me before they had to pay for it or was such a horrible place to work I would quit before I was eligible. 

Finally got health insurance when I got married in 21 through the wife's work. Runs us $250 a month for a family of 4 for medical dental and vision. 

My dental is a joke, covers $1500/year/person. I have bad teeth, thanks family history of terrible teeth, so dental work is multi year planning to keep it covered. 

In January of this year I finally got a weird lump checked out in my leg. Never hurt, never impeded motion so I never thought it was a problem. Turns out it was Hodgkins lymphoma. 

$4100 out of pocket deductible before insurance took over 100%. My bills to insurance for the tests to find out what it was were almost $50k, I paid $4100. 

I have no idea what my every other Monday chemo treatments cost, but the blood cells booster pack I get after every treatment is $8k on their website without insurance. Deadskunk was billed $18k for his after he finished his leukemia treatment and he only needed one. I will have 12 of them if the chemo does it's job and I don't need follow up treatment. That's $100k just for ONE medication. Then there will be follow up testing. PET scans are billed to insurance at $15k each. Echocardiogram is billed $6500 to insurance, every time. Since hitting my out of pocket limit, I pay $40 to see my oncologist once a month and everything Else is covered.

These numbers add up quick. 

My dad was a dialysis patient for 15 years. His treatments, which were 3 times a week, were $16k a treatment, plus another $5k for koumadin injections, plus testing fees. Plus the multiple surgeries to install and fix the fistulas and ports. Then there was the 3 months in a coma in ICU. Millions of dollars got billed through to insurance and Medicare over that time. I know because Medicare would send us the bills and randomly refuse to pay for treatments until they were reminded you can't get blood from a stone.

There's is no way in hell I would go without insurance after this, especially with so many children where each one is a roll of the dice on what may or may not happen health wise. 

Just in the last 6 weeks, my 8 year old has been down and out for step throat twice and now Booking a tonsillectomy in July, my teenager and wife both have some mystery chest cold that won't go away or respond to medication, and that's been with us going crazy keeping the sick people isolated in their bedrooms because my immune system is effectively dead while I'm on chemo. 

It's a personal gamble, but goddamn, the risks don't out weigh the potential savings in my opinion. 

Toyman! said:

In reply to GameboyRMH :

I have been the invisible service guy in the back halls of the medical industry for over 20 years. I've listened to the talk. Listen to a few doctors plan to bill each other's patients consult fees a few times and you will probably be as jaded as I am. They are there to milk the world for as much cash as they can and the insurance industry willingly helps them hide the fleecing.

My wife has a medical billing practice, primarily servicing small providers (small doctor's offices, psychiatric care offices, physical therapy offices, etc.), mostly women owned. The reason she got into it was to help small offices and women-owned businesses make it in the industry without getting gobbled up by large hospitals (where often times they are paid less as so much of what they bring in is eaten up in hospital "overhead" (executive and staff salaries, etc). NONE of them got in it to get rich. In some cases, my wife has waived the service fee for the EHR and billing software used (and cut her fees for billing) as the practices are so small that they simply can't afford it (and we are talking about software subscriptions that are about $250 a month, and a service fee of only 6% of received billable amounts).

I get to see first hand (as I help out with the codes, EOBs, and the like) how smaller practices nationwide struggle and how the insurance companies do everything in their power to not pay, and how long it takes to get the money when they DO pay. And there are a lot of times that cash customers that can't afford insurance are charged only the amount they would pay as a co-pay. Which also screws with a provider's bottom line as they still have to pay overhead at any small office they have (rent, electrical, etc) and any staff they may have. But the providers are doing it because they want to help people. Most of them never took a small business class in their lives and don't have any clue how to run a business, even one based on their passion. So for a lot of these smaller providers, my wife is actually an unpaid office manager as well.

The system sucks, and it's biased against patients and smaller providers.

I'm currently shopping plans and OMG what a berkeleying PITA, so many subtle differences between a "Bronze Select HMO" and a "Bronze Select HMO Extra". Believe me when I tell you "Extra" doesn't always mean "covers extra stuff" or even "costs extra". You really have to make some guesses regarding the relative importance of prescription costs vs deductibles vs lab co-pays etc. berkeleying nightmare.

A former neighbor is a health plan broker. His website takes me to the same link that healthcare.gov does, but the premium is $200 / mo higher to buy it through him.

I'll only add a word of caution for those of you who think you're young and healthy and don't need much coverage. A single accident can change that instantly. Example: my wife fell and broke her arm a few years ago. It required a plate and screws to fix, and the bill came to a bit over $30K. I have no idea what the billings were for my hospital stays in 2022, but I'll guarantee it's staggering. I've gotten in the habit of looking at the statements now, even though I have Medicare and extra private insurance and I can't imagine being without significant coverage.

AngryCorvair (Forum Supporter) said:

I'm currently shopping plans and OMG what a berkeleying PITA, so many subtle differences between a "Bronze Select HMO" and a "Bronze Select HMO Extra". Believe me when I tell you "Extra" doesn't always mean "covers extra stuff" or even "costs extra". You really have to make some guesses regarding the relative importance of prescription costs vs deductibles vs lab co-pays etc. berkeleying nightmare.

A former neighbor is a health plan broker. His website takes me to the same link that healthcare.gov does, but the premium is $200 / mo higher to buy it through him.

I am retired but not on Medicare, so I went through this recently.  Stuff I didn't know before I started:

The cheapest marketplace plans probably do not include your current doctors.  The happy healthcare.gov ads assume you are taking the cheapest plans.

If you are retired but not drawing social security yet, you may have a very small income on paper.  If it is too small, the ACA wants to put you on medicaid.  IMHO you do not want to be on medicaid, it is also  unlikely to be accepted by your current doctors.

Most of our income comes from converting IRA to ROTH IRA (which is taxed) so I ended up adjusting the amount to a point where the ACA subsidy (for that income) covered our chosen plan premiums.

We are fortunate to be relatively healthy at the moment so we picked a high-deductible plan that was HSA eligible.  If an unfortunate health event happens we have to pay the huge deductible, but after a couple years the HSA will have enough in it to cover the deductible.   If the bad health event is a multiple-year event we can change the health plan to a low-deductible one with higher premiums.  If we are fortunate, the HSA can be treated like an IRA after age 65 (you can take money out for anything, not just medical expenses).  Another HSA weirdness: there is no deadline on when you have to submit a medical claim.  You can save up your receipts and submit them all in five years when you need a few $K tax-free dollars.

In reply to RevRico :

That's because you don't have Dental Insurance, you have a Dental Defined Benefit Plan.  This is the way it's always been, they pay a certain percentage of certain costs, up to a set maximum a year.  $1500 is pretty typical nowadays. 

If it makes you feel better, they pay 50% of my usual and customary fee, which basically means I'm seeing those people for free, or reaching into my pocket to pay to see them.  Recently I made the difficult decision to stop being in network for most of the Insurance plans because of that, I simply couldn't afford to continue to do it.  Out of network they basically pay my full fee and the patients portion doesn't really change. 

However the Insurance companies sent out letters to my patients telling them I was no longer in practice, or had moved locations or just flat out lied about them not being able to continue to see me.  Not because it would save the patients money (it doesn't) but because it saves the insurance companies money...

In reply to Chris_V :

Around here, almost all of the small practices have been swallowed up by the corporate hospitals. My current doctor's office is one of the few holdouts. It was interesting how many expensive tests I no longer required when I changed to a private practice instead of a corporate practice. It was also nice to talk to the doctor's face instead of the back of his coding laptop. 

You know it's bad when you are hoping Walmart gets into the medical office business to help regulate prices like they did for prescription drugs.

I know I'm late to the party here but we need to be clear that there's a big difference between "choosing to go without insurance" and "self-insuring". 

If you have $30k in the bank so you can buy a new car in cash without insurance if you total your current one; that's self insuring.

If you're rich enough you could have $500k in the bank so that you could re-build your house without insurance after a fire; that's self insuring. 

You'd probably have to be a billionaire to be properly "self insured" for a large family. That doesn't necessarily mean going without insurance isn't a risk worth taking (it might be) but it's not the same thing as self-insuring.