I’m wondering if healthy (for the moment) full pay older people on the individual market will go to Associations as a “well, it’s better than nothing” option.
Self-insurance is for those who are extremely wealthy AND extremely lucky. I have had two members of my family facing separate life threatening illnesses simultaneously. Although this was 15 years ago, the costs would have bankrupted most people. Both recovered and were able to resume their routines; many do not land there, facing both ongoing medical expenses and an inability to sustain their employment.
As fortunate as my family is, I will never feel complacent about health care access.
Does anyone have experience with association health plans offering insurance to any person over 59, however healthy? Those of us in this age bracket are risky.
If you buy a non-ACA individual plan, read the fine print.
@WISdad23 wrote: “The average healthy person would be better off going without health insurance and buying stock in United Healthcare.”
Regarding that, and others who suggest self insuring, are you SERIOUS?
Right up until fall 2017 my husband was the picture of good health. He is an active duty army physician, closing in on 30 years of service. He has deployed twice, to Iraq and Afghanistan, has had yearly physicals and has always passed the required twice yearly fitness tests.
And then his PCM ordered a CT scan to check out a small issue. An incidental finding on the scan lead to a very rare cancer diagnosis, one so rare that he was referred to the civilian hospital and physcian practice that pioneered the surgery to treat it.
Because of that civilian component of his treatment we have recieved EOB.s and billing statements, and just those bills alone have totaled over one million dollars. Total treatment costs (including treatment and drugs through the military system), have reached close to another million dollars.
That’s around two million dollars in medical expenses in 9 months for a person who was a poster boy of good health.
You can not count on good luck or on your good health lasting forever. You just can’t.
And I don’t personally know anyone who could easily drop two million dollars on health care over a nine month period, especially knowing that this will possibly be a lurking issue for the rest of your life.
The military has the closest thing to universal health care possible, and knowing that every procedure, every drug, everything, was covered 100% has surely eased our minds a bit.
The thought of having to find health insurance with this kind of pre-existing condition is pretty awful.
“The business in which I work comprises about 60 people, and it looks like we cannot get an employer plan for next year.”
Not surprising. Small groups are bad for insurance companies. Not enough people to spread out the risk.
@eastcoascrazy sorry to hear about your husband. I hope he recovers and I am glad that he has good insurance.
But I did say “the average healthy person” not someone in the military for example.
My wife and I are fairly healthy. We pay $14,700 in annual premiums for a policy with a $14,700 annual deductible. Over a 5 year period, we would have paid $73,500 in premiums. United Healthcare stock has appreciated 255% over that time. For the sake of simple math, assume we had that $73,500 at the start of the period invested in United Healthcare. We would now have ~$441,000 vs. zero. That is just 5 years.
In your particular case, if you had my typical civilian insurance through the exchange, you would have spend $29,400 in co-pays over the past 9 months. The median net worth in the USA is ~$100,000, most of which is wrapped up in a house. So odds are that $29K co-pay would wipe out all of the savings of a median person. In that case, it is arguably wise (rather than reckless) for that median person to forego insurance, hope for good health, and invest his money. That is why the ACA included penalties realizing that reasonable people might choose that course.
Self-insuring is different than the calculated risk above. A self-insured person should have reasonably liquid assets to cover potential costs.
Did anyone really think that the ACA would reduce costs?
Of course not surprising. We have always gotten coverage, but it was really hard this year. The practical threshold for employer coverage is probably meaningfully higher than our size now.
Even if you are going to rely primarily on employer-provided coverage, what percentage of American families has someone who works for a company with more than 100 (say) employees? Subtracting the Medicare and Medicaid populations, how many tens of millions of people does that leave with no meaningful market?
https://www.census.gov/content/dam/Census/library/publications/2015/econ/g12-susb.pdf indicates the percentage of workers in the US by company size in 2012:
51.6% large (>=500 employees)
14.0% medium (100-499)
16.7% small (20-99)
17.6% very small (<20)
This means that 34.3% of workers were employed by employers with under 100 employees.
Of course, some additional analysis must be done to account for households without anyone working (dependent or capitalist class), and those with more than one working (since if one works at a large or medium employer but the other does not, they theoretically could use family medical coverage from the large or medium employer).
It’s interesting. Most of you are talking about catastrophic events – the heart attack, cancer, etc. Life changing events that you’re fearful about. And that’s what true “insurance” is for. Yet today’s “health insurance” is bogged down with mandates, requirements, and “freebies” which helps drive the costs up. It’s the old $30 copay mentality. Seems to me our thinking on healthcare/insurance needs to change. But we can’t have a real conversation about changes because people freak out.
For example, what would happen if we did away with employer provided coverage? It makes zero sense to tie healthcare to your job when we have such a fluid working situation. People change jobs, freelance, start business, etc. all in a lifetime. But suggest it, and people freak out.
A lot of those “freebies” (like annual exams) wind up preventing more costs down the road. It’s called preventative care.
“But we can’t have a real conversation about changes because people freak out.”
I think it is language like this that prevents real conversation - using inflammatory language like “freak out” to describe those who hold an opinion that is different than yours.
“For example, what would happen if we did away with employer provided coverage? It makes zero sense to tie healthcare to your job when we have such a fluid working situation. People change jobs, freelance, start business, etc. all in a lifetime. But suggest it, and people freak out.”
I’m all for it. Lots of people do suggest it. It’s called universal healthcare or single payer or medicare for all and it is what a lot of the world does. We don’t tie our children’s education, our law enforcement, our emergency services to employers and healthcare shouldn’t be tied to employers either.
- Last I checked, Medicare and Social Security are funds I paid into my entire working life.
- It is disingenuous to use the word “capitalist” to describe an economic class of people. What you really mean is “extremely wealthy.” A capitalist does not have to be rich. You make it sound like anyone who does not have extreme wealth does not believe in capitalism.
- Capitalism and relying on available, government-sponsored economic benefits are not mutually exclusive.
4.FOR SURE extreme wealth and reliance on available government-sponsored economic benefits are not mutually exclusive. I’ll bet there are many that you rely on whether you realize it or not. Does UCB mean UC Berkeley? There you go.
Forgoing health insurance is a super-duper risk. Yeah, you are healthy today. Tomorrow you can be in a car accident through no fault of your own and become a quadriplegic. That will set you back hundreds of millions. Are you self-insured for that? Yes, there will be a lawsuit, and it will be appealed. You won’t see a penny for at least a decade.
Removing the linkage between employment and medical insurance would be desirable generally in a macro sense. But removing employer-provided medical insurance would only be seen as desirable by an individual who has it if:
A. S/he gets higher pay instead, and
B. S/he finds a well functioning market or method for purchasing guaranteed-issue individual coverage (the current ACA situation is not well functioning in many areas, and the pre-ACA situation with pre-existing conditions minefields was worse).
The freak-out happens because B is not currently the case, and because many employers would not do A if they dropped employer-provided medical insurance.
But they might provide a stipend to purchase the insurance through “b.”
They are pay-as-you-go programs that are subject to politically motivated changes. Given demographic changes and budgetary constraints, it would be folly to assume that current benefit levels can be continued forever without raising the associated taxes, which would not go over well with those who would pay them.
I was not using “capitalist” in terms of describing one’s political ideology, but in terms of one’s economic class based on what income one depends on. The other classes are the labor class (those who depend on income they are paid in exchange for their labor, which includes most adults, regardless of political ideology) and dependent class (those who depend on others, such as parents, other relatives, the government, or charity, again regardless of political ideology).
Obviously, moving into the capitalist class requires saving up a lot of money. In the current environment in the US, that means having to self-insure medical risks, that amount is far greater than if there were a well functioning market or method of buying guaranteed-issue individual medical insurance, or if there were a politically and fiscally secure socialized medical insurance system. In other (commonly seen as more socialistically-inclined) countries where the latter is true, the amount of money needed to move into the capitalist class is much lower because self-insuring medical risks is not necessary.
Would you prefer a term like “financially-secure-independent-retirement-possible class” to avoid the suggestion of political ideology that you read into the term “capitalist class”?
I agree that forgoing health insurance, even if you’re healthy, is risky. Even if we could qualify for those “association” plans, don’t they have lower lifetime maximums? You could have one of those plans and still be bankrupted by huge medical expenses if you exceed their maximum.
I think most people recognize that employer-provided coverage has terrible weaknesses. But given the chaos of our system, having large-employer HR departments screening options and negotiating with insurers has real value to employees. Especially if – as has been the case for all but a year or two recently – the individual-coverage market does not really work at all.
Of course, things would be a lot different if there were hundreds of millions of people with resources in the individual market. But people who talk about ending employer-provided insurance usually do so in terms of taking away the employer tax deduction for it, and/or making it taxable to employees. That’s hardly the way to sell the idea to the public. And of course you have multiple industries – the insurance companies, and also the providers, and the reams of consultants, brokers, and experts, and the HR professionals – who have organized themselves around the current system. They all know or suspect that any major change will be breaking their rice bowl.
It’s not as though the current system satisfies no one. It puts far too many people at risk, but lots of people aren’t at risk, and they can feel threatened by change. (Especially when the interest groups conduct massive marketing campaigns to make certain they feel threatened by change.) What’s more, change probably is necessary, and change is threatening, and it’s not irrational for people who don’t need change now or in the foreseeable future to resist it.
No one has come close to cracking this nut yet. Some exploit it more cynically than others. (I’m thinking of whoever it was who convinced some meaningful percentage of American seniors that Obamacare was going to mean government interference with their Medicare.)
Unfortunately, it looks like medical costs just keep going up, so that even catastrophic-only insurance may be unaffordable for a large percentage of individuals and households who do not get it from employers or the government.
“It’s interesting. Most of you are talking about catastrophic events – the heart attack, cancer, etc. Life changing events that you’re fearful about. And that’s what true “insurance” is for. Yet today’s “health insurance” is bogged down with mandates, requirements, and “freebies” which helps drive the costs up. It’s the old $30 copay mentality. Seems to me our thinking on healthcare/insurance needs to change. But we can’t have a real conversation about changes because people freak out.”
I have a non life threatening chronic condition which after two months of trying to get a diagnosis all I need is a $10 90 day prescription to control. But, it cost $15K in medical expenses over the two months pre diagnosis. And I only went to the ER once. Fortunately, I have great insurance and my total cost was only $300 in co-pays.
Most people can’t even come up with $400 in an emergency, let alone $15k.
I only know of a certain subset of people who “freak out” over changing from an employer based system of coverage.
Individually, yes, but collectively no. Source: Congressional Budget Office report
(The vast majority of annual exams are waste of resources.)
For anyone interested in hearing various experts chime in on Health Policy, I usually find the podcast Pulse Check with Dan Diamond worth listening to. It’s one of Politico’s podcasts.