Value of Health Insurance

[HCBailly]

My impression is that the value of health insurance is the investment in the prevention of a complete financial meltdown, in the event that you survive a health-related catastrophe. My question is, “How much is that insurance worth (in dollars)?â€

The impetus for my question is another increase in my health insurance costs, despite having never used it and having maintained near-perfect health. Currently, I have a low premium, high deductible policy, so as to maximize my cashflow. In effect, it would only do something if something really bad happened, like I lost an arm or a leg. Still, I take reasonably good care of myself and never put my life in extreme danger, beyond driving to job sites.

One concern that I have is because of the type of policy I have, that money is basically being sucked into a vacuum. I’ve heard that there are policies that cover regular checkups and things like that, but such policies are far more expensive than directly paying for itself myself. It seems like the only way the health insurance would be of any value to me is if I’m put in a condition where it wouldn’t matter, because I’d be nearly dead anyway.

Another concern I would have would be the power of these health insurance companies. I’ve heard so many horror stories from people who (just like me) paid their premiums for years, only to have their claim ultimately denied, even though it was supposedly covered by their policy. The problem is that no matter how wealthy I become, the insurance companies would always have more power. Even if the case was so cut and dry, that they had to honor the claim, they could delay it for so many years, that I would be stuck with the financial burden anyway.

By default, I’m keeping my health insurance, but the more I hear, the more it sounds like it’s not worth it.

Thanks for the discussion.

 

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[kurtyordy]

What I did when I was self employed-

Got a major medical policy that capped at 10k or something like that out of pocket. I would shop your plan if I was you.

 

[RealOG]

Consider an HDHP coupled with and HSA.

The HDHP is a high deductible health plan and provides mostly catastrophic coverage.

The HSA is a health savings account. Money put in is pretax and you can use it for any health related item. You dont have to worry about inplan doctors and western/easter medicine. Money that doesnt get used stays in the account and you can even invest it. Its similar to a 401k or an IRA, and you can even draw it out later in life.

Its a good way to keep a hold of your money but still have access to it in the future. Great for those super healthy types.

 

[hakrjak]

If you have a day job like I do where the co-pays are $20 bucks to go see a doctor, and prescription drugs are $20, $25, or $30 depending on the level of drug you're dealing with -- It can feel like you're naked all of the sudden when you lose that job and no longer have those benefits. I've talked to many folks who have been laid off that feel exactly that way, especially if they have kids.

I guess it depends on the person and any medical conditions you may have. I've always been one of those super healthy types who never needed a doctor, and then the last couple years I found myself in the doctors office 4-5 times for various problems.... and on top of that, I have some chronic skin condition now that my dermatologist doesn't even know what it is, but I have to see her 4 times a year alone now, and she's a specialist -- So without insurance you know it would be a rip off. Then there are all the crazy creams and stuff she prescribes me to try. And I haven't even gotten into how much my 2 small kids need the doctor for basic visits & antibiotics scrips each year.... I'm sure I'm getting around $5-10k a year of care out of my insurance plan right now on an annual basis.

Cheers,

- Hakrjak

 

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[randallg99]

just like the day when you'll really need a lawyer, you'll pay anything to get you out of trouble....

insurance works the same way.... until you need it, it's worthless but when you need it, you'll wish everything under the sun to have good coverage....

 

[hatterasguy]

Get a catastrophic plan, that way the big stuff is covered. Say you need a $150k operation or something.

But little BS stuff isn't. As you get older you will leak, squeak, and break more so your going to have to either pay for the little stuff out of pocket or get a more comprehensive policy.

 

[MJ DeMarco]

Choosing not to have health insurance could be a Life Altering Choice -- in other words, not having it could F*CK YOU for a lifetime. That should be enough to make you fork over the cash. Do not go without. As the others suggested, get a major medical plan (Covers big stuff; accidents, cancer, etc.)

 

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[HCBailly]

Yeah, my current plan only covers catastrophic stuff. I just hope that if I actually need it, my insurance company will actually pay up. I have no specific reason to believe they wouldn't, but I've just heard a lot of horror stories. My family lives a long time, even the ones who have really screwed up, so I'll just suck up the additional cost.

Thanks for the support, everyone.

 

[fanocks2003]

My experience with insurance is that you usually never recieve the benefit of it when you actually need it.

Insurance are like loans: They are only good when you never need them. When you actually need a loan or you need to exercise the insurance you don't have a chance of actually have any benefit of any of those two.

Why not start an insurance company instead? That way you will have insurance all the time. The rest, for an insurance company, is all about getting away with not having to pay the insurance claims, LEGALLY. I find that to be much smarter. The same goes with banks and loans. Start your own bank.

This way you do never have to beg for loans and never have to beg for your insurance money when you need them. Much more sane and filled with self-respect.

As I see it: Why waste money on insurance premiums, when it ends up in you having to pay the whole party in the end anyhow? For me, it does not make sense at all. Build a buffert instead and be prepared and you will have earned a lot of money just for doing so. Be your own insurance guy.

 

[hatterasguy]

They will pay when you need it, if not sue them.

OTOH hospital visits are pricey, my sister let her insurance lapse for a few months and went to the hospital for a BS thing...well after a few scans and this and that she got a $10k bill.

 

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[fanocks2003]

They will pay when you need it, if not sue them.

OTOH hospital visits are pricey, my sister let her insurance lapse for a few months and went to the hospital for a BS thing...well after a few scans and this and that she got a $10k bill.

The problem with suing is that the money is not there to sue. If you need cash to cover the problem at hand, then you don't have cash to sue.

If you have cash to sue, you have cash to ignore the insurance all together.

Suing is expensive. I have been in a suing situation myself (not insurance related though). Not again I say. Not again. I didn't even win. That sucks.

 

[HCBailly]

Let’s look at an example. Since I still do the actual carpet cleaning, there are a couple ways which I am likely to become injured:

1) In a car accident.
2) Lifting something too heavy for my back.

Now, I’ve been doing this for 8 years and have never suffered an injury lasting more than 12 hours. But obviously, insurance is there for those unlucky moments.

If I’m in a car accident, an insurance company is going to nickle and dime you to death. In the state of Illinois (where I live), even if the “victim†in the car accident did not break any laws, they can still be found partially legally liable for causing the accident. Either from failing to avoid or prevent the accident, like blaring your car horn at the guy. Let’s say that after all is said and done, you’re found 10% liable for the accident and the medical costs are $100K. The insurance would still leave me with a $10K debt. Not to mention, I’d probably have to sue the other guy’s insurance company to get the $90K. Granted, $10K debt is a whole lot better than $100K, but both would still create a financial catastophe for me.

If I lift a piece of furniture that is too heavy for me, and I didn’t use the proper technique, it’s possible I could break my back. I know, my dad did it a lot. Fortunately, he taught me how to avoid it, but let’s say I broke my back one day. The insurance company could say that the injury was self-inflicted, and deny the claim. They certainly wouldn’t pay for my costs if I tried and failed to commit suicide. Why would they cover any other self-inflicted injuries.

I suppose the only other thing that could really happen to me would be a random mutation like cancer or something like that. I’m not sure that betting my immediate survival on insurance costs are worth such miniscule odds.

One thing my dad did (in Arizona) was take a part-time job at a hospital, after going through some extensive training. At least at that hospital, he get full health coverage, even though he only works part-time. That might be an option, though I think my time is better spent working on my own business.

I would personally find it morally challenging to start an insurance company. I couldn’t sleep at night knowing that my job was to basically rip people off, even if it were a legitimate business. It’s like those ultra-cheap car insurance companies. For them, it’s cheaper to hire attorneys to allow them to legally deny claims, than to actually honor the claims. That sounds like a dirty way of making a living to me. They’re going to a very special level of hell.

 

[fanocks2003]

Let’s look at an example. Since I still do the actual carpet cleaning, there are a couple ways which I am likely to become injured:

1) In a car accident.
2) Lifting something too heavy for my back.

Now, I’ve been doing this for 8 years and have never suffered an injury lasting more than 12 hours. But obviously, insurance is there for those unlucky moments.

If I’m in a car accident, an insurance company is going to nickle and dime you to death. In the state of Illinois (where I live), even if the “victim†in the car accident did not break any laws, they can still be found partially legally liable for causing the accident. Either from failing to avoid or prevent the accident, like blaring your car horn at the guy. Let’s say that after all is said and done, you’re found 10% liable for the accident and the medical costs are $100K. The insurance would still leave me with a $10K debt. Not to mention, I’d probably have to sue the other guy’s insurance company to get the $90K. Granted, $10K debt is a whole lot better than $100K, but both would still create a financial catastophe for me.

If I lift a piece of furniture that is too heavy for me, and I didn’t use the proper technique, it’s possible I could break my back. I know, my dad did it a lot. Fortunately, he taught me how to avoid it, but let’s say I broke my back one day. The insurance company could say that the injury was self-inflicted, and deny the claim. They certainly wouldn’t pay for my costs if I tried and failed to commit suicide. Why would they cover any other self-inflicted injuries.

I suppose the only other thing that could really happen to me would be a random mutation like cancer or something like that. I’m not sure that betting my immediate survival on insurance costs are worth such miniscule odds.

One thing my dad did (in Arizona) was take a part-time job at a hospital, after going through some extensive training. At least at that hospital, he get full health coverage, even though he only works part-time. That might be an option, though I think my time is better spent working on my own business.

I would personally find it morally challenging to start an insurance company. I couldn’t sleep at night knowing that my job was to basically rip people off, even if it were a legitimate business. It’s like those ultra-cheap car insurance companies. For them, it’s cheaper to hire attorneys to allow them to legally deny claims, than to actually honor the claims. That sounds like a dirty way of making a living to me. They’re going to a very special level of hell.

Unfortunately that is how most businesses are run. No need to be an insurance businessman to be such an a$$. It's all about the money in the end. After all, why are you in business in the first place? To make money, right? Second reason, to make something better if possible. Good deeds, after all, very seldom pays for food or for the rent or mortgage.

I wish it where so, if it was I would have been the next Bill Gates already 7 years ago (I started out as one of the biggest idealists. One of the naive guys). But I am not. Far from it.

I still dream about realising my big dreams, but I also understand that I may perhaps never accomplish anything worthwile. Why? Because I need to convince so many cynical guys out there. I need to convince many of those "strictly business" kind of guys out there. And very few of them care a bit about the good things people should do. Or the good ways people should behave. For them that is pure "crap" to be straight forward. All of you who have been in the game long enough know I am right.

So my aim, if I am to accomplish anything, (and it goes for any entrepreneur out there) is to focus on the way money is going to be generated. That is how you succeed. Nothing to do with good deeds. All about where there is the most money to gain. It can be insurance (because of their good float of money. Warren Buffet owns such a company after all. Is he also a scum?), it can be internet retail or it can be something else. Where there can be made some money, there you will find business.

The reason oil is still in vogue is because it probably is more lucrative than new energy forms. In order for wind energy etc to attract cash it needs to make more cash than oil. It has nothing to do with oil being a bad choice for the enviroment or wind being better for it. It's all about the money being earned in oil and the money not being earned in wind energy.

Make good deeds lucrative and money will be made in good deeds.

 

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[HCBailly]

It just seems ludicrous to me that with the amount of money going into these health insurance companies, that there’s no way to know whether they will deliver when I really need it, unless I become a legal expert myself. Basically, the entire industry is based on providing the “illusion” of financial security.

I have no moral qualms with that. Heck, I provide the illusion that I can make a home really clean for 6 months. Oh, I do the job right, really do get it clean, and it’s a whole lot better than doing nothing. However, people would freak out if they really knew how dirty our world is. I’m just talking about ordinary dust, pollen, and germs; not even all the man-made stuff on top of that.

In any case, if catastrophic health insurance (what I have now) is just providing me with an illusion of financial security, then why bother putting the money into it?

For me, a full coverage plan sounds even worse. I had one when I was working full-time for a grocery store for a few years. Back in 2000, it cost me $100/month, which I believe was a relatively good rate at the time. It covered regular exams, checkups, you name it. During that time, I used it once per year for a regular checkup. It would have normally cost me $500, whereas I only paid $25 for the deductible. Still that’s not nearly the $1200 I paid per year for the insurance.

I understand that health insurance is an absolute necessity for some people, but I’m just not seeing the short-term or long-term benefits. For those who say that it would be worth it if I need it, tell me how I can know that they won't try to screw me for every dollar they can avoid paying.

 

[fanocks2003]

In any case, if catastrophic health insurance (what I have now) is just providing me with an illusion of financial security, then why bother putting the money into it?

Well, it says itself really.

The whole insurance-premium payer relationship is in direct opposite from the get-go. The insurance companies job is to avoid having to pay and the premium payer is paying in hope of getting paid. But it is an illusion. There is no cooperation at all and never will be. It can't really be a cooperation.

The same goes with, as Dan S Kennedy says in his book about management, employer-employee. They are in two different worlds. The employer will pay what is needed to keep good or excellent people, but not more than necessary. And the employee will ask for more and more money. But they never really play on the same team and never will be. It's an oxymoron situation in both cases.

The same goes with seller-buyer. Two camps, two wills. An oxymoron thinking those two camps is in the game to suit the other guy. They want to suit themselfs. That's their interest. They will only suit the other guy in order to gain more for themselfs.

The reason people act nice is because they obviously have something to gain on it. It seems terrible, but come on: heard of the "egoistic gene"? There is a book out there with that name, look it up and read it. Very interesting read.

 

[HCBailly]

The problem with those examples, is that in each of those cases, there is a tangible value being provided to both sides. Granted, the value may not be what each side ultimately wants, but they’re still getting something based on supply and demand, or their negotiating ability. There’s nothing wrong with looking out for one’s own self interest.

However, in the case of health insurance companies, there is no tangible value being provided to me. I get nothing up front, and thanks to their attorneys, I get nothing when I need it. There is no negotiation and no benefit to me, so why be involved in the relationship?

 

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[fanocks2003]

There is no negotiation and no benefit to me, so why be involved in the relationship?

Good question? Only you can answer that for you. Personally, I think insurance companies seldom help you out when you need them so we are on the same page on that one. That is why it makes more sense to me to build my own financial buffert and be prepared to pay for 100% of the damage, because it usually ends up like that anyhow.

The same goes with lenders. If you can get them to actually be of any value, great for you. But in many cases they are more a pain in the a$$ than of any kind of value. So I think you are better of getting your customers and vendors to help you out. They are usually more interested.

 

[PEERless]

I am one of the lucky few whose health, dental, and ocular insurance are covered by my employer. But when I have been between jobs, I have used eHealthInsurance.com to keep coverage in case of disaster.

Nearly everyone can afford to have major medical coverage. Get a $5,000 or $10,000 deductible, and the premiums will be in the $30s. If you are in a car wreck or get cancer, $10,000 would be a small price to pay. You could put that in a credit card, if you have no savings.

 

[milligan740]

My experience with health insurance has been very positive and I would NOT go without it. I started on a basic plan a few years ago in perfect health and paid about $59/month to cover most expenses (meds, doc visits, etc) with a low deductible. About a year later, I was diagnosed with a brain tumor and needed $500k of care in the span of 4 months. Insurance covered everything automatically and my premiums only increased about $20/month after that. I would not risk going without - everyone thinks they're healthy until they're not.

 

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[HCBailly]

I suppose I misnamed the topic. Obviously, if health insurance works as theorized, then it’s a good move. That’s not the issue. The issue is, “Will they pay up?â€

I think my conclusion is that they have me by the balls and I have to pay the increase, despite having never used the policy. Further, I have to use the hope and pray method that they will pay up when I need it. At least that way, I have a shot at being paid.