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Help me understand - high deductible health insurance vs no insurance

DreamMomDreamMom Posts: 99Registered User Junior Member
edited March 2010 in Parent Cafe
I purchased a high deductible individual health insurance for S1 when he graduated from college. I was surprised to find that many of his friends did not carry any health insurance. All the parents were simply praying that their healthy kids would remain healthy until they landed a job with health benefits.

Some people thought the high deductible health insurance was a waste of money. I admitted that this insurance was rather useless except in catastrophic situations like getting hit by a bus.

Here is my question. If my S (with high deductible insurance) and another kid (with no insurance) both get hit by a bus and end up in ER, what will happen? I assume my S will first pay his high deductible before his insurance kicks in. How about the other kid? Will both kids receive the same treatment or care from the hospital? If the other kid is over 21 and has no money, will the hospital absorb the entire costs? Will the hospital try to get money from the other kid’s parents?

Please don’t turn this thread into a political, philosophical or ethical discussion. I will continue to buy insurance for my S just for my own peace of mind. I just want to understand how the current system works. Is it possible for somebody to come out ahead financially to have no insurance than a high deductible insurance? In what ways are a little insurance better than no insurance besides having the peace of mind?
Post edited by DreamMom on
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Replies to: Help me understand - high deductible health insurance vs no insurance

  • ebeeeeeebeeeee Posts: 5,199Registered User Senior Member
    Might depend on what kind of high deductible you have. I have an HSA flexible plan. What that basically means is that I put money in tax free and then I pay for most of my own health care up to the first 5,000 dollars per year. BUT and here is the big but...if I go to a doctor who is in the network of my health insurance the doctor has to write off a certain amount of his bill. I get the in network alloted amount billed to me.
    I don't believe in no insurance for a lot of reasons. The main one is that several years ago my neighbors both got cancer (husband and wife). They had no health insurance. What they went through was awful and they lost their house. The hospital will not just write off a bill. They will try to work with payments but they won't just write it off.
    I don't know about going after the parent of someone over 21.
    It is also my understanding that if you go without health insurance for a period of time and then get insurance the insurance company might try to claim a health problem was a pre existing condition and not cover it.
    I do not think high deductible is a waste of money. YMMV (your mileage may vary).
  • bluebayoubluebayou Posts: 21,700Registered User Senior Member
    Well in the first place, if anyone gets hit by a bus, the bus company will be paying through the nose. But, assume your kid just goes jogging and slips off a curb and breaks an ankle. Or, assume an otherwise healthy individual, 25 year-old ruptures an appendix. Other kid with no insurance does the same. By law, everyone must be treated in an ER. Assuming they cast both legs (or pull both appendixes (sp?)?, the hospital will try to collect. Your son's insurance will pay out after the deductible is satisfied. Other kid will continue to receive bills until hospital turns it over to a collection agency. Other kid could ignore or declare bankruptcy.
  • ShrinkrapShrinkrap Posts: 11,697Registered User Senior Member
    The kid with no insurance could end up with a lot of debt.
  • Momof10of13of15Momof10of13of15 Posts: 476Registered User Member
    They should both get the same treatment but the one without insurance may be moved to a different hospital after ER treatment because not all hospitals will cover uninsured patients. Also, the patient without insurance may not get the same level of tests or treatments as the patient with insurance, not necessarily lesser care though. However the hospital will want that money and will expect to be paid and will not write off the entire amount, at least not for the first many years. Granted if this was such an instance where they were hit by a bus, everyone would be going after the bus company, but if it was another catostrophic illness or the like, the risk of being without insurance is too great. Additionally it is true that if your insurance lapses for longer than 63 days (I think that is the length), you will likely hit pre-existing condition clauses where an insurer can refuse to treat any issue for the first year or other determined time period, even if the issue isn't discovered prior to your first first with insurance, they can still determine it was pre-existing. And yes, your son would have to pay his high deductible and the insurance would pay the rest (up to the lifetime max if applicable) but even paying the high deductible would likely be a fraction of what the hospital charges are without insurance because don't forget, doctors and hospitals also charge a much higher amount to uninsured patients because they are not under contract to charge less.
  • cartera45cartera45 Posts: 12,197Registered User Senior Member
    There are studies that show that the uninsured often get inadequate care in a hospital and are more likely to die. Those who are treated without insurance pay a premium. Your S's insurance company will be billed only a portion, and sometimes a small one, of the bill. The person without insurance will be responsible for the entire amount and the bill can be huge. Most hospitals will set up a payment plan and accept a fairly small amount each month. They many not hassle someone unless they fall behind in the payments. Then it is likely the hospital will pursue its claim and turn it over to collection agency. The failure to pay can end up on a credit report that can cause problems for many years. Some hospitals will write off much of the charge if they see no chance of it getting paid, but the probably won't do it until your credit is ruined. You are wise not to take the chance. Here is an interesting article about the young and uninsured.

    A Generation Uninsured: Living Without Health Insurance -- New York Magazine
  • DreamMomDreamMom Posts: 99Registered User Junior Member
    The article linked by cartera45 was eye opening.

    My S’s high deductible insurance was not the kind associated with HSA. It was a short term insurance plan and it was cheap. I was just confused when multiple parents told me that the ER would take care of the uninsured kids. No one seemed to be concerned about re-payment for such ER visits as if the hospital had a special budget for charity cases. I hope none of my S’s friends get seriously sick while uninsured.
  • Indiana91Indiana91 Posts: 535Registered User Member
    I had a high-deductible plan for a couple years while self-employed and the biggest benefit for day-to-day (not catastrophic) use over no insurance was that the charges were for the amount contracted by the insurance company, not the higher charges that came directly from the doctors' offices. Say the doctor's office would charge $300 for a visit, but only charge the insurance company $200, I would only owe the $200. Without the insurance write off I would have had to pay the full $300.
  • oldfortoldfort Posts: 17,298Registered User Senior Member
    My company offers both high and low deductible insurances. I figured out the premium difference and how much I would have to pay out of pocket, and higher deductible is more economical. That's why many companies are only offering higher deductible insurance, and paying the deductibles.

    You are doing the right thing by getting a high deductible insurance for your son. It should be cheaper because most insurance companies assume young people are fairly healthy. The purpose of that insurance is to make sure that he would be covered, if God forbid, he would come down with an illness that could wipe out everyone's life savings. If your son were to have an illness that would require hundreds thousands of $ treatment to save his life, and if he didn't have insurance, what would you do? Many of those hospitals and doctors are getting smarter, if you do not have insurance or money they wouldn't very likely to treat you. Would you sell your house, pull out your 401k to get him well, or would you just let him deal with it?

    Another thing to take into consideration is "evidence of continued insurance." It is much harder to get a new insurance if there is a lapse, you would have to go to through a full medical exam. If your son should have pre-existing condition than it is even more difficult.

    As pointed out by Indian91 - when you have insurance your medical costs would also be lower, from doctor's visit to lab work or even prescriptions. One time I picked up an antibiotic, it was originally $150, but it was billed to my insurance(or me) for $50.
  • cartera45cartera45 Posts: 12,197Registered User Senior Member
    No one should choose to rely on the emergency room for care. There is a reason that the first person you see in an emergency room visit - unless you're bleeding out - is the person asking for your insurance information. However, it is not a bad idea to let the doctor know that insurance - no prescription insurance or high deductible - is an issue because there are some things he/she can do to affect the charges without affecting care. Hospital doctors are told which drugs to use and sometimes much cheaper alternatives are available if the patient asks. The patient can also ask if a drug is necessary for treatment or just given for comfort and can choose whether they want it or not.
  • ebeeeeeebeeeee Posts: 5,199Registered User Senior Member
    Great thread. Many of us with soon to be college grads without full time/benefits jobs will be helping our kids face these decisions. Thanks OP!
  • cartera45cartera45 Posts: 12,197Registered User Senior Member
    Many states are wrestling with the issue of dependent coverage right now. Pennsylvania recently raised dependent coverage to age 30 - for employer based plans. There is a similar bill in Maryland but not sure it will pass.
  • thumper1thumper1 Posts: 38,380Registered User Senior Member
    OK...here is one thing to consider. If your kiddo's doctor participates in the health insurance plan the kid has...the doctor AGREES to take their allowance for their payment. Let me give you a real life example. Kiddo has a $1500 deductible meaning he has to pay the first $1500 of medical care every year. His policy is a BC/BS Anthem Individual plan. He went to the doctor where he had $1000 worth of charges (office visits and some tests). It was all submitted to Anthem. Their allowance was $500...and because the doc is a participating doctor, they agree to this cost. SO...they reduce the costs to my kiddo by $500. He has to pay $500 instead of the total $1000. He only pays what Anthem says the charge should be because the doctor is a participating doctor and agrees to this charge.

    So...having a high deductible plan saves money in overall charges too.

    As pointed out above...another thing to consider...if your kiddo has a preexisting medical condition of ANY kind...they really need to have continuing insurance coverage. If the coverage lapses, they will have a huge problem getting another policy.
  • LergnomLergnom Posts: 6,834Registered User Senior Member
    An important factor is the coverage ratios even after the deductible. Many such plans will only pay a relatively small % and/or will cap benefits at fairly low levels so they don't actually act as catastrophic protection. They are more like ways to suck money from you.
  • LongPrimeLongPrime Posts: 5,208- Senior Member
    So does it seem at all fair that there is two retail pricings?

    Who tolerates such in the world outside of medical service?

    DS can get HDHI-catastrophic coverage, either with or without maternity and prescription, representing a ~75% price difference. The difference is 100miles (Regence Oregon vs Regence Washington).
  • Nrdsb4Nrdsb4 Posts: 9,296Registered User Senior Member
    Keep in mind that young people don't only need insurance for accidents. Young people do develop chronic or acute catastrophic illnesses. Those without insurance will be in a much worse situation than your son.

    A friend of mine in nursing school was diagnosed with leukemia. She had no health insurance. Her situation was tragic and convinced me of the absolute necessity of good health insurance.
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