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Best health insurance if self employed?

snowbank

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I'm getting off an old plan I was paying for that was under my dad's employer. Figured some people here might have good insights on the best insurance to get, and what types of prices I should be okay with paying. I'm in Arizona if it makes a difference.
 

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bflbob

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I'm getting off an old plan I was paying for that was under my dad's employer. Figured some people here might have good insights on the best insurance to get, and what types of prices I should be okay with paying. I'm in Arizona if it makes a difference.
Bill:

I'm a big fan of high-deductible plans -- especially if you are young and healthy.
The premium is quite low, and the deductible would be around $5,000 for a single.
You put the deductible into a tax-defered savings/investment account.
If you don't use it, you get to KEEP it.

If you get ill or injured, you are subject to the insurer's agreed rates.
In my case, that's BC/BS and the savings in agreed rates is pretty good.

Check the phonebook for a local benefit provider.
You'll want to see if you can get into their Trust Plans.
They should have plans available to small businesses -- read one or two people.
 

bflbob

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Bill:

I'm a big fan of high-deductible plans -- especially if you are young and healthy.
Oh...a couple of warnings on these.

First, make sure you have access to the full deductible when you start.
I don't mean you need to put it into the plan -- a credit card will do.
The worst thing that could happen is to get a month into it and find out you'll need major surgery.

Secondly, this acts as a retirement plan.
Any money you put into it can be withdrawn penalty free upon hitting retirement age.
Take it out for non-medical before then, and it has a 10% (I believe) penalty.

Third, our plan (I'm not sure about others) has a deductible and a co-pay portion.
In my case, I have a family deductible of about $5k.
Then the plan goes to 80/20% for the next $5k.
After that, the plan pays 100%.

So, before the plan kicks in 100%, your expenses would be...
The first $5k, plus...
20% of the next $25k ($5,000)...
For a total of $30k in medical expenses.
Not many people hit this in a year.

Lastly, you can use the deductible savings account (an HSA) to pay non-covered expenses.
Things like dental, eyewear, etc. -- basically anything listed as a medical expense by the IRS.
They can be paid from the HSA, but unfortunately DON'T count toward your deductible.
 

reipro

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I agree with the high deductable plan so long as you can afford the deductable. Make sure that the plan can not cancel you if you get ill. Many individual plans have out for the insurance company remember there attorney wrote the policy not yours.

So make sure what is in the policy, many times there are exclusions.

NASE has an OK plan. That is the National Association of Self Employed
 

AroundTheWorld

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I too am a big fan of the high deductable.

If you want a group plan, joining your local chamber (if you don't have a company with employees) can be a way to get group. From my perspective, the reason to go with group would be if you have a pre existing condition - and you are coming from a group plan - and you need that condition to be covered. Otherwise, I think an individual plan works.

When my husband got out of the military, I had been diagnosed with cancer. I HAD to go to another group plan, our cancer treatment would not be covered. We purchased a group plan through my company and paid about 600 to 700 a month (for the family).

Once I had been cancer free for ... I think it was 5 or 6 years... I was able to qualify for an individual plan - which is 250 a month (for the family) I think rates do vary a lot from state to state.
 

bflbob

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Guess who just left our office?

That's right...our Benefit Specialist.

He was here with renewal info for the coming year.

We have two types of coverage we offer to employees...a BC/BS co-pay plan, and an HSA plan through BC/BS.

After six months of activity, our co-pay plan shows a loss ratio of 212.7%.
That means that they would have to increase our premiums by 212% to BREAK EVEN!
We're talking taking a family plan from $825/month to nearly $1,750 to BREAK EVEN!
And that's before the insurance company adds administration fees, etc.

Now compare that to the HSA plan, where the loss ratio is only 21.9%.
That means the family plan cost could drop from $450/month to only $98 and they would still break even.

Obviously, there are a lot of other factors that influence our decisions, but $1,750 versus $98 is a BIG one.

What amazes me even more is that our average employee 'requires' $1,750 per month of medical expenses -- in addition to their deductibles and co-pays!

All this, and no one even had a major (>$50k) claim.:bgh::bgh::bgh::bgh::bgh::smx8:
 

Allthingznew

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We have two types of coverage we offer to employees...a BC/BS co-pay plan, and an HSA plan through BC/BS.
I don't want to sound like an idiot but using letters w/o first defining their meaning makes me feel like an idioit. Please explain their meaning. Thanks
 
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snowbank

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Bob,

I'm thinking of potentially going with one that has just a $1k deductible, and I pay $122/month. The $5k deductible I pay like $77/month, so I'm paying $45 more per month to get a much lower deductible. So if for less than 1 out of 7 years I have something I need to spend a good amount of money on I should go with the $5k deductible, but if at least 1 in 7 years I should go with the lower deductible. For this plan, it seems like it's almost a wash. I mean, at some point I could get my tonsils out. I'm active with working out/playing basketball, so I could have something happen with breaking a bone or getting hurt somehow.

You think the $1k deductible plan seems decent for me?
 

bflbob

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I don't want to sound like an idiot but using letters w/o first defining their meaning makes me feel like an idioit. Please explain their meaning. Thanks
Oops...common in my field, but I forget not everyone is from my area.:thankyousign:

It stands for Blue Cross/Blue Shield.
They are the biggest health insurance carrier in the USA.

In an earlier post, I refered to an HSA.
That stands for a Health Savings Account.
 

bflbob

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Bob,

I'm thinking of potentially going with one that has just a $1k deductible, and I pay $122/month. The $5k deductible I pay like $77/month, so I'm paying $45 more per month to get a much lower deductible. So if for less than 1 out of 7 years I have something I need to spend a good amount of money on I should go with the $5k deductible, but if at least 1 in 7 years I should go with the lower deductible. For this plan, it seems like it's almost a wash. I mean, at some point I could get my tonsils out. I'm active with working out/playing basketball, so I could have something happen with breaking a bone or getting hurt somehow.

You think the $1k deductible plan seems decent for me?

Bill,

Don't just look at the deductible.

You need to look at maximum out-of-pocket costs.
You also need to look at coverages.

For example, the $1k deductible might have no maximum on out-of-pocket.
Imagine the worst happens, and they find some type of cancer with a $100,000 treatment expense.
So, you'll pay 100% of the first $1k in costs, and 20% of the $99,000, or $20,800 total.
But the $5k deductible might have a $7,500 maximum out-of-pocket limit.

One of the problems we have at work is trying to balance cost with benefit.
We can't protect all possible outcomes at the cost of unaffordability.
So we need to weigh the odds of a claim against the cost of covering that claim.

You'll need to do the same with your plan.
It sounds like you have the right idea.
I mean...what are the odds of a card player figuring odds.:coolgleamA:
 

Allthingznew

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It stands for Blue Cross/Blue Shield.
They are the biggest health insurance carrier in the USA.

In an earlier post, I refered to an HSA.
That stands for a Health Savings Account.
Thank you sir.

It sounds like the bottom line is this is really hospital or major illness insurance. Correct? I would imagine everything else is out of pocket? Drs. visits, prescriptions etc.?
 

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snowbank

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Bill,

Don't just look at the deductible.

You need to look at maximum out-of-pocket costs.
You also need to look at coverages.

For example, the $1k deductible might have no maximum on out-of-pocket.
Imagine the worst happens, and they find some type of cancer with a $100,000 treatment expense.
So, you'll pay 100% of the first $1k in costs, and 20% of the $99,000, or $20,800 total.
But the $5k deductible might have a $7,500 maximum out-of-pocket limit.

One of the problems we have at work is trying to balance cost with benefit.
We can't protect all possible outcomes at the cost of unaffordability.
So we need to weigh the odds of a claim against the cost of covering that claim.

You'll need to do the same with your plan.
It sounds like you have the right idea.
I mean...what are the odds of a card player figuring odds.:coolgleamA:

Ya, the reason I didn't include the rest was because it was pretty similar within those 2 plans. Maybe when I get back from the gym I'll include the differences between the rest, but it was close enough for me where my main decision came down to the deductible.(at least I think) Almost seems like a wash between the 2(although I'm sure the higher deductible is more +ev for the person getting insured long term, the edge seems small enough where the short term variance of having the higher deductible plan probably pretty much makes it a wash in that sense.

I mean...what are the odds of a card player figuring odds.
:thumbsup:
 

bflbob

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Thank you sir.

It sounds like the bottom line is this is really hospital or major illness insurance. Correct? I would imagine everything else is out of pocket? Drs. visits, prescriptions etc.?
You know? I had an insurance agent explain that to me recently.

Originally, Blue Cross/Blue Shield (BC/BS) was introduced with a $200 deductible.
That was decades ago, when a birth was $50 or less.
So back then, it was a major illness insurance.

In the decades since, health care costs have skyrocketed.
It now costs more for a doctor's visit then it used to cost to give birth and stay in the hospital for days.

Yet the deductible stayed the same.
This has the effect of the deductible being reached in weeks or months, where it seldom was ever hit before.

The only way to pay out more is to take in more.
They do this through increased premiums.

The higher the premiums get, the more often people feel they need to use the service.
If you have to come up with $50 to see a doctor for a sniffle, you won't likely go.
But if you pay $1,000 per month 'in case' you get the sniffles, you might.

The more people use it, the more it costs, so more people use it more, so...

What used to be major medical coverage is now coverage for medicine and doctors.

The HSA account shifts the plan back to a major medical coverage.
Now the only time the insurance kicks in is when something major happens.

I hope this helps you understand it.
 

Jayemes

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Oct 1, 2011
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I searched the forums and this seemed to be the best thread on health insurance.

I currently have health insurance, but am worried about my insurance going from about $65/month to $1150/month with COBRA! No joke. Those are actual amounts. And it is a high deductible, health savings account plan.

I requested info for the NASE (national association of the self employed). Does anyone have any experience with them?

I couldn't seem to find info about health insurance on my chamber of commerce page...

Does anybody have any other ideas on how to get reasonably priced health insurance for a family when you have 1 employee (self)?

Thanks,
David
 

Jayemes

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Oct 1, 2011
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I have Blue Cross in a group plan.

My deductible is 5k, I pay $197(? might be 202 now)/mo.

All preventative care is free.

I think it also covers disability too (??)

Obviously non-smoker, in great shape, no previous stuff.
Mr Kung Fu,

What type of group did you join to get the Blue Cross?

Thanks,
David
 

Kung Fu Steve

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Mr Kung Fu,

What type of group did you join to get the Blue Cross?

Thanks,
David
As an individual you can be refused.

As a business (with more than one person) you cannot be refused.

My dad is also a shareholder in my company. 2 of us = a group. While my rates are probably a little high because he is in the same group, I bring his rates down. He will be 59 this year and while he's in fantastic shape, he has family history that hits him hard.

So if you have a corporation or llc, or whatever - you can just find and agent and tell them what you're looking for. You can have your wife, kid, parents, (whatever) be a "member of the board" and since you work at the same place you will get group rates.

Obviously the bigger your group the better the rates, but in our case, they would not insure my dad or step mom so it had to be done through this loop hole.

I think I pay 200 and he pays 500 or 600 per month. But if you're an entrepreneur you know it's a tax-deductible expense so it's not as bad as it might sound. Previously he was paying 1,000 per month for a high-deductible health insurance plan - freakin' ridiculous.
 

bflbob

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I currently have health insurance, but am worried about my insurance going from about $65/month to $1150/month with COBRA! No joke. Those are actual amounts. And it is a high deductible, health savings account plan.
Sort of gives you an idea of why businesses and governments are wanting to share the costs with employees, huh?

Most employees have no clue how much insurance costs. They get angry when their costs go from $65 to $100 per month. At the same time, the cost of the premium to the employer has just gone from $1,000 to $1,200. But the employee feels they are carrying all the increase.

Even the high-deductible plans have gone nuts. When they first started out, they were bare-bones. That kept the costs down. But then people bitched about coverages, so the gov said, "you need to add annual visits, colonoscopies, pap smears, etc. -- with no co-pay or deductible". So those get paid for by increasing the premium. Nothing is free.

I can't tell you how many folks are double-covered. Both husband and wife have family coverages, because the employer is covering it. Make the employee pay, and the pencil gets a lot sharper.

Ugh!
 

biophase

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I have Healthnet and pay $230 a month, $2500 deductible.

Rates very alot by state.
 

James Fend

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I think I pay 200 and he pays 500 or 600 per month. But if you're an entrepreneur you know it's a tax-deductible expense so it's not as bad as it might sound.
Oh shit. really??? Wow, I never knew that. smh

I have Aetna and been on it for years without deducting anything.
 

Kung Fu Steve

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Oh shit. really??? Wow, I never knew that. smh

I have Aetna and been on it for years without deducting anything.
Oh totally, you should not be paying that with post-tax dollars.

I'm not an accountant though so don't listen to me.
 

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