Self Employed Health Insurance Options

I received the following question about self employed health insurance, and because I know many of you are business owners, or blog full time, I hoped you could provide some real world help for a fellow reader looking for health insurance.

Robert writes in with the following question:

I was wondering if you knew any ways self employed individuals could buy health insurance?  I have been taking your advice on building a “side hustle,” and luckily enough it is now bringing in more than my full time job.  I am eager to quit my regular job and take this side hustle full time, but worry about affordable health insurance for me, my wife and my young son.  Any ideas?

Robert, first of all, congratulations on building a second income substantial enough to replace your full-time job.  You may remember from my New Year’s goals post, that is something I hope to one day achieve as well. Also like you, I have questions about how to provide health insurance for my family, outside of the traditional group policy where I work. I have a few ideas to get you started, but will rely on readers to fill in the gaps by sharing their expertise on the subject.

1. Continue current coverage under COBRA.  According to the Department of Labor website, you, your spouse, and your son may continue health insurance coverage based on your “voluntary or involuntary termination of employment for reasons other than gross misconduct.”  COBRA is expensive because you’ll have to pay both sides of the insurance premium (your employer probably used to pay the majority of the costs), and you may only be eligible for up to 18 months, so it is not a long-term solution.

2. Apply for a health insurance policy at eHealthInsurance.com.  eHealthInsurance.com is one of the leading sites for providing quotes on personal and family health insurance coverage, coverage for small businesses, and short-term policies. I highly recommend you get a free instant quote there first.

3. One spouse continues to work and receive benefits.  Something my wife and I have discussed is the idea that she could return to work to receive family health insurance coverage if I ever branch out on my own.  This might be a tough sell, particularly if there are child care issues to consider.

4. Work part time for an employer that offers benefits.  They are few and far between, but there are a few employers out there that offer health coverage to part-time employees.  Starbucks and UPS come to mind.  It might be possible to do your “side hustle” during the day, sling a few boxes at night, let mom stay at home and still get benefits. This one may be a long shot.

5. Consider membership in trade associations, unions, etc.  When investigating this option for myself a few months ago someone recommended joining various freelance associations (such as the “Freelancers Union,” and various groups for writers), which offers group health care options for its members.  I also noticed places like Sam’s Club offer group policies to their members through providers such as Blue Cross Blue shield, etc.  You will probably pay more than you did as an employee, but less than you would for COBRA.

6. Consider a high-deductible plan along with a Health Savings Account (HSA).  If you and your family are relatively healthy, you might investigate an HSA with a high-deductible, or catastrophic, health insurance plan.  Basically, a catastrophic plan has low premiums because it only pays for things over several thousand dollars (think heart attacks, accidents, etc.).  The health savings account is established to help pay anything and everything up to that high deductible.  This option requires a good chunk of cash to fully fund the HSA up front.  It’s also a risky plan, but a lot cheaper alternative to traditional health insurance, and a lot safer than having no insurance at all.

Comments

  1. There are actually Web sites you can to that lump self-employed people into a “group” so that you can get more affordable health insurance. I got mine through http://www.healthinsurance.org/. You can go compare plans from different providers and make a choice. I’m actually looking to switch my provider after four years (and rapidly increasing costs), and going back to see if I can get a plan that suits me better.

  2. Good advice, especially the HDHP with HSA. Assurant also offers a short term (6 month, renewable once) health plan that is affordable, and while not the best coverage limits, is a heck of a lot better than nothing.

    State Farm sells them along with other Assurant products.

    Ric

  3. I went through ehealthinsurance.com to get my self-employed health insurance.

    Honestly, the biggest thing I learned was how little my previous employer had been subsidizing my health insurance. It hardly cost more at all. (For basically the same plan through the same exact provider–Blue Cross Blue Shield.)

  4. Last year I quit a job since they were laying people off anyways with only 1 week severance if they stayed the whole time (not worth it to me). So I did a little contracting and just COBRA’d my previous coverage since my kids had pre-existing conditions. It was expensive (around $800/mo) but IMO worth it. I could have gotten an HSA with a deductible of $3K for around $400-$500 for my family of 4 although I wasn’t sure how the pre-existing condition would have worked out.

    Also be aware that most self-bought insurance does not cover maternity unless you specifically add it ($$$$).

  5. I also used ehealthinsurance.

    Depending on your age, health, etc., I would look at the cost difference between a catastrophic coverage plan and a more “traditional” plan that covers doctor’s visits, ect. (Well, most catastrophic plans DO cover visits and prescriptions – you’ve just got to pay $ out of pocket before you see co-pays.) For me, the cost difference between a HSA plan and a plan with $30 copays was about $5 per month, but it varies greatly by age.

    My husband has a HSA through work, and I was amazed at how much the plan saves even before co-pays kick in. You don’t pay the full price for services, you pay the amount that the insurance company has negotiated – up to 50% less, in our case.

  6. I can’t wait to read all the responses. This ultimately was the deciding factor when going back to work after being laid off. I wanted to finish school as quickly as possible while doing odd jobs but I couldn’t I tried and my very first month I was in the hospital which is very costly. Plus no one will see you without health insurance go ahead and try seeing the orthopedic doctor for a cast… no one will take you. Not around here anyway.

  7. I agree, COBRA is helpful but it’s damn expensive. I was in an accident several years ago and had no income. I was forced to fund COBRA with a credit card (I don’t recommend this). There’s a White House plan underway now to fund 65% of the cost of Cobra which would help.

    Cash is a good way to go but is tough for more expensive procedures. A simple CT scan can run over 2K.

    In regards to small business insurance, check with your state. Mine has a special and mandatory enrollment plan.

  8. @ObliviousInvestor: Good point. People I’ve talked with off-line about this issue seem to forget they were paying premiums (likely deducted from their paycheck) when employed, so they get caught up in comparing the new, self-bought plan with what they thought was “free” health care provided by an employer. If you paid $300 premiums at your job, and a private plan costs $500, that’s only a $200 increase, but most of us only see the $500 and get cold sweats!

  9. Ehealthinsurance does not cover all states (not mine anyway). Having researched a lot before buying my own I would recommend the following:

    READ all the deductible information!

    Insurance companies make this ridiculously complex. In my plan for instance the term is used completely differently for individuals vs. family or for High Deductible vs. regular. There is a big difference in a plan that covers 100% after the deductible and one that does not.

    Know your Health Care Spending History

    This one really suprised me after I began digging into it. I did not think we really spent that much on doctors visits and the like. A few trips really adds up. Know this is the only way to do step 3…

    Run various scenarios

    Once you know your family’s average habits over a year (x wellness, y sick, z other…) you can run the cost on the various plans you are looking at. I would also suggest to run a “worst case / get hit by a bus” scenario so you know what you’re dealing with.

    Utilize any payment reduction options

    My plan has ways to reduce your payment – rebates for low income families and 10% reduction for filling out wellness commitments. Use everything you can.

    All this is so much harder than it should be but worth the time to really investigage. Though it does cost a lot don’t let it be the deciding factor in your job happiness (just plan on cutting back in other areas or making more money). As a self-employeed person I think it’s totally worth it. Hopefully changes will be taking place with healthcare sooner rather than later but until then spend the time and do your homework.

  10. We have been using different options through our State Farm insurance. They actually have pretty reasonable options, we had blue cross blue shield even. We have our home and cars with State Farm as well but its not required.

  11. My family and I have used the high deductible/HSA route for 3 years. My observations are that this is a true insurance policy that is meant to protect you from a catastrophic event (much like auto insurance covers accidents, not oil changes). So if each family member regularly visits the doctor, this plan is not for you.

    While our plan covers annual check ups for every member (including immunizations for the kids), I suggest you get another plan if you go regularly for allergies or ear infections, etc.

    Also, you don’t have to fully fund the HSA the first year. As long as you have money somewhere to cover the deductible in case you have a catastrophic incident the first year, you’ll be Okay.

  12. I think the HSA with the catastrophic coverage (100% covered after a certain high deductible) would be good for a lot of people. If you have multiple children though, it can be a little tougher. Regular medical insurance will cost a lot as kids tend to visit the doctor more than adults do (for whatever reasons).

    Keep in mind that once the money is put into an HSA, you can’t get it back out again unless it is spent on medical/wellness purchases. I put almost $500 into an employer-matched HSA 3 years ago and haven’t used a dime out of it. I still get statements to this day and will basically have to wait until I get sick or injured enough to use it.

  13. I was looking into this myself when trying to move back to the coast before I found a ‘real job’ with totally free health insurance (I pay NO premium at work).

    About 20 years ago, when the kids were young and I was dairy farming, I had what was then called a “major medical” health policy with a $5000 deductible. This covered the hospital and emergency room situations, and I would pay the normal office visits and prescriptions, eye and teeth visits. It worked well for my family at the time.

    What I found this time, looking for just me, was another major medical policy with a lower deductible of $2000 and some office visit coverage. It was thru MetLife and would be a reasonable payment that I would be able to come up with even if I was not working.

    If you are prepared to pay for the “little things”, like eye, teeth, office visits and some prescriptions, the coverage cost is reasonable for the “big things” like the hospital stays and emergency room visits. As it was, this part time job arrived with fully paid health ins, so I didn’t have to buy my own. But it IS available.

  14. Another option is a health costs sharing plan. We are members of Samaritan Ministries, a Christian organization, and every month we send between $300 and $350 to another family to cover their medical bills. Samaritan’s role is only to coordinate where each person should send their share each month, rather than actually collecting and distributing funds, and the 10,000 members cover each other’s medical bills directly.

    There is a $300 deductible, but we still pay much less than we would for regular insurance, which often carries a deductible itself. In December we had medical bills of over $5,000, and I just wrote my last check to pay those off after receiving the money from other members throughout March.

    It’s an incredible program and one that I think would solve the health care crisis if more people knew about and joined similar programs.

    To be honest, I don’t know if there are other options available, because this one has been the perfect fit for our family.

    Here’s a link to FAQs for anyone interested in more information: http://www.samaritanministries.org/info/html/faq.html#20

  15. The freelancer’s union is a really fab resource for insurance for the self-employed. It saved us a mountain last year.

  16. Bah, there was no claim to a “health care crisis” before the 2004 and 2008 election cycles. The “crisis” is that people who can barely hold down a decent job don’t want to pay for their insurance and think everyone else should foot the bill. Sure, there are places that don’t offer insurance, but if you want it, go buy it yourself. It is available, but not for free.

    Even if we did have socialized medicine, people would then complain to high heaven about how difficult it is to see a “medical service technician” and how long the wait is for procedures. Do any of you have any idea the number of British and Canadian nationals who travel to the US in order to seek medical treatment due to the delay and red tape in their systems? It is truly staggering.

    // Now back to your regularly scheduled programming…

  17. Marci,

    There is no such thing as totally free health insurance. Even if your employer is paying all premiums for you, they are considering this as part of your pay package and your salary is reduced by this amount. If they didn’t pay for your health insurance, they would be able to afford to pay you more.

  18. I am by no means an expert on this, but I do consider myself to know quite a few of the ins and outs due to my experiences of being self employed for the last 6 years.

    My family and I have an HSA with a $10400 deductible. Why so much? Well, I don’t think that we will meet the lower deductible of $2000, 3000 or 5000, so we choose $10,400 for the lower payment. We contribute the difference to fully fund our HSA. We get the discounts that the insurance company gets for when we see the doctor.

    Our story goes something like this: when my wife and I had our first child, we thought that we would need group coverage, so I somehow was able to obtain group coverage, basically for the maternity care, through my job. I paid at the time, for 24 and 25 year old, about $550 a month, with a deductible of 2000 per person or 4000 for the family. When the baby came via unplanned C-Section after 26 hours of labor, that was two deductibles, and the rate jumped to 950 a month. After a couple of months we jumped to an HSA. Our claims for the delivery were $25000 through insurance, of which we paid $4000 plus we paid like about $8000 in premiums for the year. So $12000 for the year and deductible.

    For our next child, we decided to pay cash, no insurance claims on this, with a scheduled C-Section due to previous C-Section. We did tons of research. We found a policy that a $10,000 maternity deductible. We did the math and decided against it. We went with our high deductible health plan (HDHP) with HSA, and fully funded the HSA. If any complications arose they were covered by insurance, but normal delivery was not. We paid cash and including premiums paid while my wife was pregnant plus all hospital, doctor, lab, tests, everything came out at $9000.

    So we paid less for this child’s delivery by cash than with insurance. That’s sounds strange, doesn’t it. I found that I got much better deals with every doctor or lab with cash than with insurance. And a majority of them would give me a discount of 20 – 25% if I asked for one and paid on the spot with them.

    This is true insurance, insuring against something that you can not afford to happen. Not maintenance of yourself through copays and low deductibles. It takes a different mindset. It also helps that my father in law is a general practitioner. We take the kids to him for minor colds, but to the pediatrician for the most part.

    This is not to say that this is not risky and you could end up paying the deductible every year. You most certainly can do that, and then it wouldn’t be a good deal. However, I like the fact that I am paying approximately the same for my HDHP with HSA as traditional insurance, but I am funding my HSA, which sticks with me and is there when I need it.

  19. As for where to get it? A good place to start is insurance.com, but the burden of checking everything out falls squarely on your shoulders. You get a bunch of different rates for a lot of different companies. You will pay the same as through your independent insurance agent, but you get all the plans to compare and contrast right in front of you.

  20. For those bills you get that are applied to your deductible, a good place to visit to make sure you pay a fair price is http://www.myinsnet.com. They are medical bill negotiators who negotiate a fair price to pay on your medical bill. They charge a percentage of the amount saved on the bill, so there is no risk, and they have been negotiating with medical providers for more than 20 years.

  21. If you’re relatively young and healthy, you can get very good coverage for $300-400 a month. When I switched from employed to 1099-contractor, that was the range we ended up in. Policy had a $2500 deductible for non-routine stuff, but standard copay for anything that wasn’t catastrophic or elective. We budgeted an extra $200 a month for deductible. If you’re self-employed, you can deduct your insurance premiums and out of pocket expenses as a business expense, so that helps.

    The place we got nailed though was that our son had a preexisting condition. When you switch from group to individual plans in most states, there is a 6-12 month waiting period for those – unless you’ve exhausted COBRA and similar options first. So if you can’t afford 6-12 months without coverage for something like that, you’re really in a pickle. For us, we’re going back and re-electing COBRA under the 65% subsidy provision in the recent omnibus package. Without that, I don’t know what we would have done.

  22. I have been a health insurance broker for over a decade and every day I read more and more “horror” stories that are posted on the Internet regarding health insurance companies not paying claims, refusing to cover specific illnesses and physicians not getting reimbursed for medical services. Unfortunately, insurance companies are driven by profits, not people (albeit they need people to make profits). If the insurance company can find a legal reason not to pay a claim, chances are they will find it, and you the consumer will suffer.

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    However, what most people fail to realize is that there are very few “loopholes” in an insurance policy that give the insurance company an unfair advantage over the consumer. In fact, insurance companies go to great lengths to detail the limitations of their coverage by giving the policy holders 10-days (a 10-day free look period) to review their policy. Unfortunately, most people put their insurance cards in their wallet and place their policy in a drawer or filing cabinet during their 10-day free look and it usually isn’t until they receive a “denial” letter from the insurance company that they take their policy out to really read through it.

    The majority of people, who buy their own health insurance, rely heavily on the insurance agent selling the policy to explain the plan’s coverage and benefits. This being the case, many individuals who purchase their own health insurance plan can tell you very little about their plan, other than, what they pay in premiums and how much they have to pay to satisfy their deductible. For many consumers, purchasing a health insurance policy on their own can be an enormous undertaking. Purchasing a health insurance policy is not like buying a car, in that, the buyer knows that the engine and transmission are standard, and that power windows are optional. A health insurance plan is much more ambiguous, and it is often very difficult for the consumer to determine what type of coverage is standard and what other benefits are optional. In my opinion, this is the primary reason that most policy holders don’t realize that they do not have coverage for a specific medical treatment until they receive a large bill from the hospital stating that “benefits were denied.”

    Sure, we all complain about insurance companies, but we do know that they serve a “necessary evil.” And, even though purchasing health insurance may be a frustrating, daunting and time consuming task, there are certain things that you can do as a consumer to ensure that you are purchasing the type of health insurance coverage you really need at a fair price. Dealing with small business owners and the self-employed market, I have come to the realization that it is extremely difficult for people to distinguish between the type of health insurance coverage that they “want” and the benefits they really “need.” Recently, I have read various comments on different Blogs advocating health plans that offer 100% coverage (no deductible and no-coinsurance) and, although I agree that those types of plans have a great “curb appeal,” I can tell you from personal experience that these plans are not for everyone. Do 100% health plans offer the policy holder greater peace of mind? Probably. But is a 100% health insurance plan something that most consumers really need? Probably not!

    In my professional opinion, when you purchase a health insurance plan, you must achieve a balance between four important variables; wants, needs, risk and price. Just like you would do if you were purchasing options for a new car, you have to weigh all these variables before you spend your money. If you are healthy, take no medications and rarely go to the doctor, do you really need a 100% plan with a $5 co-payment for prescription drugs if it costs you $300 dollars more a month? Is it worth $200 more a month to have a $250 deductible and a $20 brand name/$10 generic Rx co-pay versus an 80/20 plan with a $2,500 deductible that also offers a $20 brand name/$10generic co-pay after you pay a once a year $100 Rx deductible? Wouldn’t the 80/20 plan still offer you adequate coverage? Don’t you think it would be better to put that extra $200 ($2,400 per year) in your bank account, just in case you may have to pay your $2,500 deductible or buy a $12 Amoxicillin prescription? Isn’t it wiser to keep your hard-earned money rather than pay higher premiums to an insurance company?

    Yes, there are many ways you can keep more of the money that you would normally give to an insurance company in the form of higher monthly premiums. For example, the federal government encourages consumers to purchase H.S.A. (Health Savings Account) qualified H.D.H.P.’s (High Deductible Health Plans) so they have more control over how their health care dollars are spent. Consumers who purchase an HSA Qualified H.D.H.P. can put extra money aside each year in an interest bearing account so they can use that money to pay for out-of-pocket medical expenses. Even procedures that are not normally covered by insurance companies, like Lasik eye surgery, orthodontics, and alternative medicines become 100% tax deductible. If there are no claims that year the money that was deposited into the tax deferred HSA can be rolled over to the next year earning an even higher rate of interest. If there are no significant claims for several years (as is often the case) the insured ends up building a sizeable account that enjoys similar tax benefits as a traditional IRA Most HSA administrators now offer thousands of no load mutual funds to transfer your HSA funds into so you can potentially earn an even higher rate of interest.

    In my experience, I believe that individuals who purchase their health plan based on wants rather than needs feel the most defrauded or “ripped-off” by their insurance company and/or insurance agent. In fact, I hear almost identical comments from almost every business owner that I speak to. Comments, such as, “I have to run my business, I don’t have time to be sick! “I think I have gone to the doctor 2 times in the last 5 years” and “My insurance company keeps raising my rates and I don’t even use my insurance!”

    As a business owner myself, I can understand their frustration. So, is there a simple formula that everyone can follow to make health insurance buying easier? Yes! Become an INFORMED consumer. Every time I contact a prospective client or call one of my client referrals, I ask a handful of specific questions that directly relate to the policy that particular individual currently has in their filing cabinet or dresser drawer. You know the policy that they bought to protect them from having to file bankruptcy due to medical debt. That policy they purchased to cover that $500,000 life-saving organ transplant or those 40 chemotherapy treatments that they may have to undergo if they are diagnosed with cancer.

    So what do you think happens almost 100% of the time when I ask these individuals “BASIC” questions about their health insurance policy? They do not know the answers! The following is a list of 10 questions that I frequently ask a prospective health insurance client. Let’s see how many YOU can answer without looking at your policy:

    1. What Insurance Company are you insured with and what is the name of your health insurance plan? (e.g. Blue Cross Blue Shield-”Basic Blue”)

    2. What is your calendar year deductible and would you have to pay a separate deductible for each family member if everyone in your family became ill at the same time? (e.g. The majority of health plans have a per person yearly deductible, for example, $250, $500, $1,000, or $2,500. However, some plans will only require you to pay a 2 person maximum deductible each year, even if everyone in your family needed extensive medical care.)

    3. What is your coinsurance percentage and what dollar amount (stop loss number) is it based on? A good plan design works this way. After you have satisfied your calendar year deductible, the insurance company will pay 80% ($8,000) and you will pay 20% ($2,000) of the first $10,000 in medical bills that you incur each year. This first $10,000 is known as the “stop loss number”. After this brief sharing arrangement is over, the insurance company pays 100% up to $5 Million per insured for the rest of that calendar year. Everything starts over again on the first of each subsequent year. Stop loss numbers can be as little as $5,000 or $10,000 or as much as $20,000. However, there are some policies on the market that have NO stop loss number at all! Be sure you find out before you purchase a plan!

    4. What is your maximum out of pocket expense per year? (e.g. All deductibles plus all coinsurance percentages plus all applicable access fees or other fees)

    5. What is the Lifetime maximum benefit the insurance company will pay if you become seriously ill and does your plan have any “per illness” maximums or caps? (e.g. Some plans may have a $5 million lifetime maximum, but may have a maximum benefit cap of $100,000 per illness. This means that you would have to develop many separate and unrelated life-threatening illnesses costing $100,000 or less to qualify for $5 million of lifetime coverage.)

    6. Is your plan a schedule plan, in that it only pays a certain amount for a specific list of procedures? (e.g., Mega Life & Health & Midwest National Life, endorsed by the National Association of the Self-Employed, (N.A.S.E.) is known for endorsing schedule plans)

    7. Does your plan have doctor co-pays and are you limited to a certain number of doctor co-pay visits per year? (e.g. Many plans have a limit of how many times you go to the doctor per year for a co-pay and, quite often the limit is 2-4 visits.)

    8. Does your plan offer prescription drug coverage and if it does, do you pay a co-pay for your prescriptions or do you have to meet a separate drug deductible before you receive any benefits and/or do you just have a discount prescription card only? (e.g. Some plans offer you prescription benefits right away, other plans require that you pay a separate drug deductible before you can receive prescription medication for a co-pay. Today, many plans offer no co-pay options and only provide you with a discount prescription card that gives you a 10-20% discount on all prescription medications).

    9. Does your plan have any reduction in benefits for organ transplants and if so, what is the maximum your plan will pay if you need an organ transplant? (e.g. Some plans only pay a $100,000 maximum benefit for organ transplants for a procedure that actually costs $350-$500K and this $100,000 maximum may also include reimbursement for expensive anti-rejection medications that must be taken after a transplant. If this is the case, you will often have to pay for all anti-rejection medications out of pocket).

    10. Do you have to pay a separate deductible or “access fee” for each hospital admission or for each emergency room visit? (e.g. Some plans, like the Assurant Health’s “CoreMed” plan have a separate $750 hospital admission fee that you pay for the first 3 days you are in the hospital. This fee is in addition to your plan deductible. Also, many plans have benefit “caps” or “access fees” for out-patient services, such as, physical therapy, speech therapy, chemotherapy, radiation therapy, etc. Benefit “caps” could be as little as $500 for each out-patient treatment, leaving you a bill for the remaining balance. Access fees are additional fees that you pay per treatment. For example, for each outpatient chemotherapy treatment, you may be required to pay a $250 “access fee” per treatment. So for 40 chemotherapy treatments, you would have to pay 40 x $250 = $10,000. Again, these fees would be charged in addition to your plan deductible).

    Now that you’ve read through the list of questions that I ask a prospective health insurance client, ask yourself how many questions you were able to answer. If you couldn’t answer all ten questions don’t be discouraged. That doesn’t mean that you are not a smart consumer. It may just mean that you dealt with a “bad” insurance agent. So how could you tell if you dealt with a “bad” insurance agent? Because a “great” insurance agent would have taken the time to help you really understand your insurance benefits. A “great” agent spends time asking YOU questions so s/he can understand your insurance needs. A “great” agent recommends health plans based on all four variables; wants, needs, risk and price. A “great” agent gives you enough information to weigh all of your options so you can make an informed purchasing decision. And lastly, a “great” agent looks out for YOUR best interest and NOT the best interest of the insurance company.

    So how do you know if you have a “great” agent? Easy, if you were able to answer all 10 questions without looking at your health insurance policy, you have a “great” agent. If you were able to answer the majority of questions, you may have a “good” agent. However, if you were only able to answer a few questions, chances are you have a “bad” agent. Insurance agents are no different than any other professional. There are some insurance agents that really care about the clients they work with, and there are other agents that avoid answering questions and duck client phone calls when a message is left about unpaid claims or skyrocketing health insurance rates.

    Remember, your health insurance purchase is just as important as purchasing a house or a car, if not more important. So don’t be afraid to ask your insurance agent a lot of questions to make sure that you understand what your health plan does and does not cover. If you don’t feel comfortable with the type of coverage that your agent suggests or if you think the price is too high, ask your agent if s/he can select a comparable plan so you can make a side by side comparison before you purchase. And, most importantly, read all of the “fine print” in your health plan brochure and when you receive your policy, take the time to read through your policy during your 10-day free look period.

    If you can’t understand something, or aren’t quite sure what the asterisk (*) next to the benefit description really means in terms of your coverage, call your agent or contact the insurance company to ask for further clarification. Furthermore, take the time to perform your own due diligence. For example, if you research MEGA Life and Health or the Midwest National Life insurance company, endorsed by the National Association for the Self Employed (NASE), you will find that there have been multiple class action lawsuits brought against these companies since 1995. So ask yourself, “Is this a company that I would trust to pay my health insurance claims?

    Additionally, find out if your agent is a “captive” agent or an insurance “broker.” “Captive” agents can only offer ONE insurance company’s products.” Independent” agents or insurance “brokers” can offer you a variety of different insurance plans from many different insurance companies. A “captive” agent may recommend a health plan that doesn’t exactly meet your needs because that is the only plan s/he can sell. An “independent” agent or insurance “broker” can usually offer you a variety of different insurance products from many quality carriers and can often customize a plan to meet your specific insurance needs and budget.

    Over the years, I have developed strong, trusting relationships with my clients because of my insurance expertise and the level of personal service that I provide. This is one of the primary reasons that I do not recommend buying health insurance on the Internet. In my opinion, there are too many variables that Internet insurance buyers do not often take into consideration. I am a firm believer that a health insurance purchase requires the level of expertise and personal attention that only an insurance professional can provide. And, since it does not cost a penny more to purchase your health insurance through an agent or broker, my advice would be to use Ebay and Amazon for your less important purchases and to use a knowledgeable, ethical and reputable independent agent or broker for one of the most important purchases you will ever make….your health insurance policy.

    Lastly, if you have any concerns about an insurance company, contact your state’s Department of Insurance BEFORE you buy your policy. Your state’s Department of Insurance can tell you if the insurance company is registered in your state and can also tell you if there have been any complaints against that company that have been filed by policy holders. If you suspect that your agent is trying to sell you a fraudulent insurance policy, (e.g. you have to become a member of a union to qualify for coverage) or isn’t being honest with you, your state’s Department of Insurance can also check to see if your agent is licensed and whether or not there has ever been any disciplinary action previously taken against that agent.

    In closing, I hope I have given you enough information so you can become an INFORMED insurance consumer. However, I remain convinced that the following words of wisdom still go along way: “If it sounds too good to be true, it probably is!” and “If you only buy on price, you get what you pay for!”

  23. If you are not familiar with the the new “American Recovery And Reinvestment Act Of 2009″ then you need to check it out right now at the U.S. Department of Labor website here: http://www.dol.gov/ebsa/COBRA.html In a nutshell this new Federal Act entitles you to a 65% reduction in your monthly Cobra continuation premium if you lost your job after September 1st, 2008. Granted it only lasts for 9 months, but it is most certainly going to help millions of American’s who have lost their employer sponsored group health insurance coverage. There are strings attached for those who earn more than $125,000 (or $250,000 for married couples filing a joint federal income tax return). If your income meets or exceeds the amounts above, you may have to repay all or part of the premium reduction through an increase in your income tax liability for the year. So you may wish to consider waiving your right to the premium reduction. Whether you elect it or not the question remains, what do you do after the 9 month Cobra subsidy expires? Depending on the State you live in you may have up to 4 different alternatives to high Cobra continuation premiums. The first option is for relatively healthy people and it’s the lowest cost way to maintain the same quality coverage you had through your former employer. That option is an individual health insurance policy. This type of policy can be purchased for one person or for an entire family. You can also choose an individual or family Consumer Driven HSA qualified Health Insurance plan. With this type of Health Insurance plan your premiums will be lower than with any other kind of Health Insurance.

    The problem with Cobra continuation coverage is that you are continuing a health insurance plan that was designed and purchased by someone else. Specifically your former employer. The decisions made during that purchase were much different than the decision that a family must make when purchasing their own health insurance coverage without the help of their former employer (who used to pay a significant portion of the monthly premium as an employee benefit). Cobra continuation plans typically have very low calendar year deductibles (e.g. $250 or $500). The lower the deductible, the higher the premium. When you design your own individual health insurance policy you can raise the calendar year deductible and lower your premium drastically whilst retaining all of the “first dollar” benefits that are normally included with Cobra continuation coverage. “First dollar” benefits are defined as “benefits you receive WITHOUT paying your calendar year deductible (e.g. outpatient doctor office visits, outpatient generic and brand name prescription drugs, outpatient preventative care or wellness coverage and accidental injuries). All of these “first dollar” benefits are covered WITHOUT paying your calendar year deductible first.

    Typically only a small “co pay” ($25 or $30) is required at the time of service. This being the case, it is much wiser to choose a high deductible plan (e.g. $2,500 per calendar year) with $5,000,000 major medical coverage per family member instead of paying twice the premium (or more) for Cobra continuation coverage. Doing so will protect each family member just as well as Cobra continuation coverage whilst also maintaining all of the aforementioned “first dollar” benefits found on most Cobra continuation plans.

    A common misconception is that individual health insurance plans do not cover “pre-existing conditions”. Whilst this can be the case with some carriers (e.g. Blue Cross Blue Shield.) There are many quality insurance carriers who actually cover controlled conditions such as Hypertension (High Blood Pressure) & Hyperlipidimia (High Cholesterol) from day one, including the medication one uses to control such conditions. This being the case, if you and your family are reasonably healthy people there is no reason to throw your money away by paying an inflated Cobra continuation premium. After all, isn’t it better to pay a bit more IF you actually end up in the hospital, then pay twice the premium (or more) each and every month for fear that one day you will? For quality health insurance options for the insurable please visit: http://www.sbisvcs.com/Small Business Health Insurance.htm

    What if you have tried to obtain individual health insurance coverage and have been declined for a pre existing condition more serious that the two aforementioned conditions? Are there still options to Cobra continuation coverage? Indeed there are. The options are threefold. They are as follows:

    1.) State Insurance Risk Pool Coverage provided under HIPAA that provides seamless continuation of coverage after your Cobra continuation coverage expires, or if you have lost employer sponsored group coverage due to policy cancellation by your former employer. Pre existing conditions such as Diabetes & Cancer that would render one uninsurable on the individual major medical market would be covered from day one providing you have been insured for a minimum of 18 months with no lapse in coverage of more than 63 days. Not all states have insurance risk pools but many do. To find out which ones do visit: http://www.naschip.org/states_pools.htm

    2.) Small Group Health Insurance which contains the all important “Guaranteed Insurability” clause. This option can be elected with a minimum of two people (often husband and wife) who work for the same corporation. Small Group coverage will also provide seamless continuation of coverage for those with pre-existing conditions such as Diabetes or Cancer providing the aforementioned 18 months of prior continuous coverage has been met. Must have corporate tax ID number and both “employees” must work 30 hours or more. These policies can be premium rated as high as 67% in states such as Illinois due to the severity of the medical history of one or more applicants. However, often times this rate increase is less than a Cobra continuation premium.

    and

    3.) “Defined Benefit” Health Insurance policies. These policies (recently advertised on the Fox news channel) are issued on an individual basis to anyone regardless of medical history. Whilst these policies offer limited benefits. They do offer an unlimited surgical benefit and up to $1,000 a day for hospital coverage up to 100 days. These policies are also HIPPA qualified. Meaning that they will also cover pre existing conditions such as Diabetes or Cancer from day one providing you have the same aforementioned proof of prior coverage of 18 months or more with no lapse in coverage of more than 63 days. To learn more visit: http://www.sbisvcs.com/guarantee_issue.htm

  24. I went through ehealthinsurance.com and found a good plan through Celtic insurance. Another thing to note, which I found out- my husband was inelligible for coverage because of a pre-existing condition but there are state-programs available for people who can pay a premium and are inelligible for health insurance otherwise.

  25. I don’t have personal experiences, but like Mandi said there are Christian and other group insurance like companies that ‘share’ each others bills. It works much like insurance and I haven’t heard many people complain about the coverage. Usually there is a small deductible and then full coverage on all major medical(non routine) bills. Mandi mentioned Samaritan Ministries I know about Medi-Share. You agree to some up front lifestyle and faith rules so that the risk level is significantly lower for the overall group.

    Just throwing it out there for some more research by people.

  26. Delurking to add a quick note. I worked for Chase Bank for 3 years at 20 hrs/wk and received full benefits for my family (my husband is a minister and the church doesn’t have a group plan). I cannot say enough good things about them from either the employee perspective or the customer’s side. LOVE THEM LOVE THEM LOVE THEM. If there were a Chase bank around me now, I would fight to work there again, unfortunately there isn’t one in our new town. I know Bank of America also has benefits for 20 hrs/wk employees too. But they suck.

  27. @Kathy – the nice thing about the free health insurance is that I DON”T pay taxes on it… if the company raised my salary then I would have to pay state and federal income taxes on the money needed to fund my health insurance privately. Both my employer and I win this way – I don’t pay the extra in payroll taxes and get health insurance, and the company can deduct the cost of the health insurance and does not have to pay all the matching payroll taxes on the money they would have paid me instead. It’s a win win for both of us. Anything to keep my salary down is good in my book! I only want enough and not a penny more!

  28. I used ehealthinsurance.com and got a plan with Aetna. It has a high deductible (about $5000 I think) which is waived on many things like office visits. I pay $87 per month. It does coverage for certain things like maternity coverage or less-than-severe mental illnesses.

  29. You do have to do the research. Lots and lots of research. Check out the Time magazine article a couple weeks ago:
    http://www.time.com/time/nation/article/0,8599,1883149,00.html
    before you do anything.

    Also, as Jennifer said, pre-existing conditions will trigger an automatic denial of independently purchased health care. My kids and I are insurable on the open market, but my husband with a history of depression, is absolutely not. (BTW– This is NOT an issue of people who don’t want to work or don’t want to pay. People who have good educations, decent health, and have never been denied coverage do not and will not ever understand the issues associated with being uninsurable. And DavidK, you are paying for all the other uninsured people out there. Do you think those hospital’s indigent write-offs aren’t built into your bills and your premiums?)

    Not all states have coverage for people like my husband, too. Even when they do, if you’re not able to spend a grand a month for health insurance, then it’s probably not an option.

    We did have the last two kids without insurance–at home with midwives. $1800 each, on a 9 month payment plan. Deal of the century. Except for the fact that in the end, we had more kids. :-) This was not a choice made for frugality, but it was a nice side bonus.

    Just do the research. Read every word of the policy. I’d even advise paying a lawyer to read it for you, because that could be far cheaper in the long run.

  30. My husband and I are both self-employed. We purchase our own health insurance through Aetna. It is a very basic preventative care plan. Our yearly physicals are covered, as are all women’s visits (mammograms, pap smears, etc.). My son’s well child visits are partially covered. We really purchased it for catastrophic coverage – in case someone breaks a leg or worse and ends up in the hospital.

    For people who need individual health care insurance, make sure you can actually GET it before you turn down other alternatives. I was turned down twice by two companies because of a condition I had as an infant and that I no longer even have! These companies are very picky. Good luck if you have pre-existing conditions.

    If you find you can’t obtain private health insurance, see what your state has to offer. Our state, Tennessee, has a program called Cover Tennessee that assists people who can’t otherwise obtain coverage. But not every state has great options. As others have said, do your research.

    The worst case scenario is not being able to obtain insurance. If that ever happens, keep researching options, and in the meantime, work with your care providers to get discounts and set up payment plans. Most care providers will give discounts for people who are paying out of pocket (I didn’t have insurance when I was pregnant – very, very unfortunate, but I was able to negotiate a 30% discount).

  31. What on this green golden globe of Earth makes anyone think that socialized medicine won’t turn down coverage for congenital or uncoverable conditions? Have a good long talk with anyone who had a Medicaid/Medicare claim turned down for no good reason, or someone whose Social Security benefits were cut due to them earning just a little too much on the side or just a simple clerical error. Just because the government would be in control doesn’t mean it would actually end up any better for anyone.

    The only reason I even have medical coverage now is because I have a white-collar job where the insurance is paid for by my employer. I cannot opt out of it. If I could, I would have saved thousands upon thousands of dollars due to never having been to the doctor in over 6 years. And that was for a lingering fever where he prescribed bed rest and liquids! Golly, I could’ve figured that out at home. From my point of view, yes my insurance payment does cover a small portion of people who are uninsured and visit the hospitals I use but at least I’m not paying for every other US citizen (or illegal immigrant) out there who wants to stuff hydrogenated fat into their face all day and then rack up huge medical bills getting a damn gastric bypass! As an example. (This procedure would be covered by socialized medicine — see England’s National Health Care Service.)

  32. I received a follow up comment from Ric regarding Temporary Insurance coverage from Assurant Health. Firstly, I do not believe that anyone should ever purchase temporary insurance at any time. I repeat, at any time. The reason why is that temporary insurance is for a period certain. Typically 6 months and never more than 12 months. This being the case, whether you are being treated in the hospital for on ongoing condition or not, your coverage will end at the end of the either 6 or 12 month period. Leaving you uninsured and most likely uninsurable if you contract a major medical illness like the gentlemen mentioned in the Time Magazine article that Melanie was kind enough to include in her earlier post. That article is here:
    http://www.time.com/time/nation/article/0,8599,1883149,00.html

    More importantly, I wanted to address the issue of Assurant Health. Since not only had Ric had mentioned that one can purchase an Assurant Health Temporary Policy from any State Farm agency, but they are also the insurance company who left the gentleman featured in the aforementioned Time Magazine in the lurch with untold sums of unpaid medical bills because he purchased Temporary Health Insurance coverage.

    Normally I would blame this scenario on the ignorance of the insured in this case since he did not do proper due diligence prior to policy purchase. However, Assurant Health has fallen from grace since they were known as Fortis Health. Very soon after they left went public on their own (separate from Fortis “A” in Belgium and Fortis “B” in the Netherlands) they started offering substandard products under the name of “Saver” which expose the insured to catastrophic out of pocket expenses. This being the case, we no longer recommend Assurant Health to anyone if there is any other option.

    And this is what separates a Broker from a “captive” agent. Ric mentioned that you can purchase a temporary policy from State Farm. The problem with State Farm is that they hold a “captive” contract with Assurant Health. This means that they can not offer any other product to their customers and this is NEVER good for the prospective insured because there is no single insurance company that can meet everyone’s needs. Most especially not Assurant Health who’s products are ridiculously overpriced and several (“Right Start” etc.) contain coverage caps and out of pocket risk not found on other legitimate health insurance policies.

    Not knowing the difference between a quality health insurance product and a substandard product can lead to horror stories like this one: http://www.cbsnews.com/stories/2007/05/24/cbsnews_investigates/main2850054.shtml By the way, recognize the insurance company in the video?

  33. @Ms. Aja B: Thanks for taking the time to comment! I’m glad you found the information useful, and I agree, the comments from our readers are what typically make each post great sources of information and ideas.

  34. I am currently playing in the NFL and have great coverage with Cigna, I am married with two kids and have decided to start my own business when I am done playing football. The information on this website is priceless, thank you so much all of you who have commented with such thoughtful comments and VERY useful info on this very complicated subject…..

  35. Just a quick follow up comment on Jennifer & Melanie’s statements regarding pre-existing conditions.

    Contrary to popular belief, the vast majority of Individual/Family Health Insurance policies purchased on the open market (other than Blue Cross) DO INDEED cover pre-existing conditions such as Hypertension (elevated blood pressure)& Hyperlipidimia (elevated cholesterol) providing that these conditions are:

    1.) Well controlled by medication
    and
    2.) Disclosed on the Health Insurance application.

    Coverage may cost a bit more for that applicant due to a “co-morbidity” underwriting “load” that will be applied to their portion of the family premium. However, both conditions and the medications one uses to control them will indeed be covered from day one on the majority of Individual/Family Health Insurance policies.

    Melanie was partially correct regarding Depression/Anxiety. The vast majority of carriers do not cover these conditions. However, this does not mean that a person with Depression/Anxiety will be declined for Individual/Family Health Insurance.

    Instead, an “exclusion rider” will be placed on the policy pertaining to these conditions. Or (as many carrier are doing now) the policy will simply state in it’s wording that “there will be no coverage provided for Mental Nervous Disorders”. However, the policy will still provide coverage for the vast majority of other medical conditions that the applicant may suffer from in the future.

    This again, is one of the primary reasons why no one should purchase Health Insurance without the guidance of a reputable and knowledgeable Broker.
    Most especially since it costs NOTHING extra to do so.

  36. We have helped consumers nationwide understand their options when it comes to self employed health insurance. Over the last 3 or 4 years, HSA’s or health savings accounts have become increasingly popular as small business owners seek to reduce their monthly costs associated with their medical insurance.

    Fortunately, these health savings accounts provide a tax deduction equal to your premium. Paired with a high deductible health plan, these plans provide significant tax savings that can be used for over the counter medication, chiropractic medicine and other items that might not be covered by your major medical plan.

    The plans work like this: Iff you had a $5400 family deductible with 100% coverage after that deductible is reached (a very common plan), you’re total cost would have been approximately $3240 is total expenses after your tax deductible health insurance deduction. If you don’t use the funds setup in the HSA, they roll over each and every year unlike an employer sponsored flexible spending account. Although you’re responsible for paying everything up to your deductible, insurance companies are betting you’ll be more frugal with your money and compare services provided by different doctors and hospitals to find the best care for the most affordable price.

  37. Excellent points made my the SBHI. The acronym HSA is being tossed around quite a bit nowadays especially since the tax advantages of owning an HSA and a corresponding qualified HDHP (Deductible Health Plan) have been significantly increased under the former Bush administration. Effective December 20, 2006 President George W. Bush signed the Health Opportunity Patient Empowerment Act of 2006, enhancing Americans’ access to tax-advantaged health care savings. The law, part of the Tax Relief and Health Care Act of 2006, provides new opportunities for health savings account (HSA) participants’ to build their funds. To read about the new adjustments Click here: http://www.treas.gov/press/releases/hp209.htm For the 2009 IRS H.S.A. COLA Adjustments click: http://www.treasury.gov/press/releases/hp975.htm
    The 2010 IRS H.S.A. COLA Adjustments were announced on 05 14 2009. They can be viewed here: 2010 IRS HSA COLA

    HSA stands for Health Savings Account, more commonly referred to as a “Medical IRA”. HSA qualified HDHP’s are one of several relatively new Health Insurance concepts that fall under the heading of “Consumer Driven Health Insurance”. Health Savings Accounts are a unique way to attractively manage your health insurance costs. They were originally named MSA’s or Medical Savings Accounts designed by Senator Bill Archer (R) of Texas. Bill’s project was to find a way to reduce the cost of health insurance for the self employed without sacrificing quality coverage for a major medical illness. Bill’s brilliant idea was to eliminate the parts of a Traditional Health Insurance Plan that cost the consumer the most money. These expensive benefits include outpatient doctor “co pays” and outpatient prescription “co pays”. Bill approached Congress with a proposal that stated in essence that if you remove those two features and keep the major medical coverage in place you could conceivably cut the cost of your health insurance premium considerably. He was absolutely right!

    To illustrate how Bill’s idea works in the real world. We will use a real world example. Tony & his wife are currently paying $1,134 a month for Cobra continuation coverage from a previous group plan. In comparison, the monthly premium for an HSA qualified HDHP (High Deductible Health Plan) which covers each insured family member up to $5 million dollars is less than half of the premium that they are paying now ($481.64 monthly to be exact). This is a yearly savings of $7,828.32 or a monthly savings of $652.36. This is a significant difference. However the insured has to give up all of their outpatient co pays. Is this worth it? This was the question posed to Senator Bill Archer (R) when he approached Congress back in the late 1990′s. His answer to Congress was simply “make it worth it”.

    In other words, he asked Congress to make it worth it to the insured. Their response was two fold. And it is these two primary reasons that make HSA’s a “no-brainer” for every self employed prospective insured and for their corresponding employees. The first thing Congress did was to state that if a policy holder buys a major medical health insurance policy (HDHP) with a yearly family deductible between $2,200 per family (not per person) or as high as $5,800 per family we will call that an HSA qualified health insurance plan (HDHP).

    They further said that in order to make giving up outpatient co pays more attractive to the insured we will allow anyone who has an HSA qualified health insurance plan (HDHP) the option to open a tax favored HSA (Health Savings Account) with their local bank or financial brokerage house. Since the insured is saving a considerable amount of money each month by giving up their out patient co pays, we will allow them to take that extra premium that they would have normally given the insurance company for the “privilege” of a co pay and put it into a 100% tax deductible account that will grow tax deferred at an interest rate adjusted by the Fed.

    In addition to depositing the amount you save in insurance premiums, you may also deposit in your HSA an amount equal to what the IRS allows for that given year. For the year 2009 the maximum contribution a family can make to their HSA account is $5,950. In addition, any family member who is 55 years of age or older can deposit an additional $1,000 annually (more on the age 55 allowance below). This means that the total amount that Tony and his wife (in our example above) can deposit per calendar year is $7,950 and they can take a 100% tax deduction for that contribution similar to an IRA.

    Furthermore, if they do incur medical expenses that arise throughout the course of the year that are subject to the deductible (i.e. prescriptions, doctor’s office visit charges, etc.) the IRS will allow them to pull out that money that they put into their optional tax deductible, tax deferred HSA savings account to pay for those expenses. When they use their HSA money to pay for those expenses the IRS will allow them to write those expenses off at a 100% tax deduction. The list that the IRS allows them to spend their HSA money on is very liberal and includes things like dental, orthodontics, eyeglasses, radiokeratonomy (Lasik corrective eye surgery), alternative medicines etc. Click the hyperlink to see the list of allowable expenses and disallowed expenses on the HSA section of the IRS web site here: http://www.irs.gov/publications/p502/index.html

    Arguably the most attractive tax advantage to owning an HSA is the fact that the money left over in the HSA account that was not used on medical expenses at the end of the year is “rolled over” into the next year and awarded a higher rate of tax deferred interest. The insured also has the option to roll those unused funds into no load mutual funds, thereby building an extra tax deferred retirement account with money they would have normally given to the insurance company each and every year whether or not they had any claims that year!

    It should also be noted that with not having a “co pay” with your plan does not mean that your outpatient doctor visits and outpatient prescription drugs will not be a covered expense. With most HSA qualified HDHP’s these charges are a fully covered expense just as they would be with a Traditional Health Insurance Plan. The only difference is these charges will be subject to the “aggregate” family deductible.

    Being “subject to deductible” does not mean that you will pay full price for these charges either. If you stay within the vast PPO network that most reputable carriers offer (www.phcs.com) your outpatient doctor office visit charges will be discounted by as much as 40%. Your prescriptions will also be discounted significantly as well by staying within the Rx prescription network.

    Let’s break that down in plain english. Let’s say your doctor’s office charges you $100 for a “sick visit”. If you use a PPO provider (typically PHCS or MultiPlan) those office charges will be “re-priced” down to roughly $60. Now compare that to a Traditional plan which provides you with a $25 “co pay”. The difference to you is $35 out of pocket for that doctor’s office visit. But is that all you are really saving?

    Not if you add in the monthly premium savings between the two plans. The typical monthly premium savings between a Traditional plan and an HSA qualified plan for a family is $200 to $300 monthly or more. Let’s split the difference at $250 less monthly. This equates to an annual savings of $3,000.

    Now let’s take that $3,000 annual savings and deposit it into a tax deferred, tax deductible interest bearing account. Let’s go a step further and imagine you find an HSA account that bears you NO interest AT ALL (which is not that hard to imagine in this economy). You’re still saving $3,000 annually and you’re deducting that amount from your adjusted gross income. This means less reportable income which means less taxes.

    Now lets imagine you have no major medical claims in year two and you deposit the same amount. Now in year three you have a worse case scenario occur. Now you have $9,000 to help pay your “aggregate” family deductible. Moreover, since deductibles with HSA qualified HDHP’s include only one “aggregate” deductible for the entire family there will be no other risk to any other family member for the rest of that year. Unlike Traditional Health Insurance Plans which typically require each of three separate family members to pay their own calendar year deductible if they end up in the hospital (or need an MRI, CT, Nuclear Medicine Scan etc.)

    The longer you look at HSA qualified HDHP’s the more sense they make. This is why they have caught on like wildfire and will continue to do so. The only inhibitor to the spread of HSA’s is lack of education (as is the case with any other financial vehicle).

    Now you can help fund your HSA account by purchasing every day items! Click http://www.myhsarewards.com

    To learn more about HSA’s and the recent federal legislation that has made them even more attractive to people over the age of 55 click: http://www.treas.gov/offices/public-affairs/hsa/about.shtml to read all about them on the Federal Governments HSA educational web site. To learn more about H.S.A.’s in a power point presentation format please click here: http://www.hsacenter.com/

    If you are an employer and are considering HSA qualified plans for your employees consider this. An individual’s employer can make contributions that are not taxed to either the employer or the employee. The combined income and payroll tax deductibility leads to discounts for health insurance of over 40 % in some cases relative to other forms of insurance. For more details for the employer http://www.treas.gov/offices/public-affairs/hsa/faq_employer-participation.shtml

  38. What people really need to understand is that in Washington State, there are many health insurance options for those that are self employed. By law, 92% of all people who apply to health insurance plans in Washington for the self employed must be accepted. Don’t believe everything you read or hear in the Media, there are health insurance options available for the self employed at very affordable rates.

  39. Very true Michale. There are cost effective ways to reform our Health Insurance system without spending up to $6 Trillion over the next 10 years as WILL BE the case with the pending “reform” bills: http://bit.ly/6YqngJ

    Here’s what needs to be done:

    Eliminate the ridiculous State imposed Mandates that PROHIBIT Health Insurers from offering coverage in EVERY SINGLE STATE! For example, Small Businesses in California have roughly 6 (yes that’s six) options for Health Insurance. Yet there are 1,300 Health Insurance companies in America! States like Colorado FORCE carriers to cover “substance abuse” which DOUBLES the Health Insurance premiums in Colorado (you can now waive “substance abuse” coverage and your premium is subsequently reduced BY HALF!). This kind of State Mandate (and so many more) is what prevent the majority of Health Insurance carriers from offering their products in every State.

    Basic economics 101 teaches us that NOTHING increases quality and drives down prices LIKE COMPETITION! How can we increase quality and competition when we stifle it by imposing ridiculous mandates that inhibit competition from the get go? All 1,300 Health Insurance carriers should be able to offer ALL of their products in EVERY SINGLE STATE. This way if you do not like your current coverage you have 1, 299 OTHER OPTIONS. With that many options available, carriers are NATURALLY FORCED BY THE RULES OF COMPETITION AND FREE MARKET ENTERPRISE to IMPROVE not only the quality of their products but to also improve their customer service OR THE CONSUMER WILL PURCHASE their Health Insurance from 1,299 other carriers! It’s as simple as that! Also, actuarial tables teach us that the more lives that are in the pool, the lower the premiums for all. How much lower could premiums be if everyone in EVERY state had 1300 carriers to choose from? How can NONE of the bills proposed in the House or the Senate not address repealing the McCarran Ferguson Act of 1945?
    http://law.jrank.org/pages/8497/McCarran-Ferguson-Act-1945.html

    Instead of bailing out GM with Billions of our blood sweat and tears and then letting them file bankruptcy 3 months later. Why not fund a NATIONAL High Risk Pool for those who are rendered uninsurable? We already have such State run High Risk Health Insurance pools in the majority of States. These Risk Pools will cover anyone regardless of their medical history. The problem is they are under funded so the premiums are extremely high. Instead of spending up to $6 Trillion over the next 10 years to insure only 20 Million of the 45 Million uninsured. LEAVE the bulk of the nation’s risk where the money is, namely with the insurance companies. Then provide a National Federal & State funded Risk Pool for those who are rendered uninsurable. Since the uninsured far outweigh the uninsurable, this would cost far less than the currently proposed $1.6 Trillion over the next 10 years.

    Update the outdated Health Insurance Portability laws (regarding credit for pre-existing conditions) to INCLUDE Individual Health Insurance Policies. As it stands now, HIPAA law allows an insured to move from one “Employer Sponsored Group Health Insurance Plan” to another “Employer Sponsored Group Health Insurance Plan” and receive FULL coverage for “pre-existing” conditions so long as they can prove to the new carrier that they have had 18 months of prior coverage with no lapse of more than 63 days. Millions of American Entrepreneurs have chosen to leave Corporate America and strike out on their own since these archaic laws were written in the 1980′s. As the face of our work force changes so too should the laws that protect it. Most especially since these entrepreneurs shoulder the BULK of the nation’s risk and PAY the bulk of the nation’s tax load! Throw them a legal bone!

    Educate the American consumer about the primary reason for the high cost of health insurance! Namely, LOW DEDUCTIBLE, LOW CO PAY (a.k.a. Traditional) Health Insurance. NOTHING drives up the cost of Health Insurance like maintaining a low deductible, low co pay plan. Instead, offer new more intelligent option to the American Consumer like “Consumer Driven Tax Qualified Health Insurance”. There simply is no more intelligent or cost effective way to insure anyone. The sad part is, these Consumer Driven Tax Qualified concepts have been around for more than a DECADE! Yet, only a small minority of the American population has even explored these intelligent (& much lower priced) Health Insurance alternatives. Those that have, are WAY AHEAD of the rest of population when it comes to managing medical risk.

    I would say weed out the 12 million Illegals (that we know about) who are sucking our Medicaid system dry…but as Congressman Joe Wilson so aptly stated, Obama CLEARLY wants to “provide a PATH TO CITIZENSHIP for the 10 to 12 million Illegals in our country”. Once they’re legal, he can then cover them ALL on our tax dollar! So YES his plan IS to cover Illegals, he’ll just make em legal first! Think they’re not sucking our Medicaid system dry? Just visit California or Illinois. Good old “Blago” enrolled thousands of Illegals in to our Medicaid system, thereby running the program in the ground & leaving our Illinois Medicaid system approx. $1.5 BILLION behind in payment of claims to physicians who have been providing “free” care to all illegals who were lucky enough to flock to the State of Illinois to insure themselves for “free”. In fact, according to the U.S. Census Bureau 10 to 12 Million of the Uninsured in America are illegal aliens. Who comprise the rest? Find out here.

    TORT REFORM! This is one area of reform that is rarely spoken of by the Liberal left. Medical malpractice liability forces providers into practicing defensive medicine. In other words, it causes medical practitioners to order multiple expensive (and often times unnecessary) tests and procedures “in defense of” potential lawsuits, JUST IN CASE they miss something in a patient’s case. All for fear of being sued for ridiculous amounts in a malpractice lawsuit. Limiting liability lawsuit awards to reasonable amounts will deter those who seek the “big pay day” by filing frivolous lawsuits against medical practitioner.

    Establish a Federal oversight committee to regulate and hold accountable physicians who make medical mistakes. What’s one of the biggest reasons why health care is so expensive? Hint: It’s not “rich CEO’s” and “outdated medical records transfer processes.” It’s Medical Mistakes! Here’s the real facts you won’t find in the media outlets:

    1994: Five years after a groundbreaking Institute of Medicine report focused attention on medical errors in hospitals, Americans say that they do not believe that the nation’s quality of care has improved. In fact, 1 out of 3 patients states that they have experienced a serious medical error http://content.healthaffairs.org/cgi/content/abstract/hlthaff.w4.534

    1995: A Study published in the Journal of American Medical Association (JAMA) found that only two percent of medication errors that occurred during the medication administration process were intercepted.
    a. More people die from medication errors than from work place injuries
    b. Medication errors account for approximately one out of 131 outpatient deaths and one out of 854 inpatient deaths.

    1999: Institute of Medicine (IOM) releases its first report on healthcare quality and medical errors. http://www.iom.edu/?id=12735 The Study finds in part that:

    a. Medical errors are responsible for injury in as many as 1 out of every 25 hospital patients.
    b. Between 44,000 and 98,000 Americans die each year from preventable medical errors in hospitals alone.
    c. The deaths from preventable medical mistakes are equivalent to the number of people who would die if a jumbo jet crashed EACH AND EVERY DAY OF THE YEAR, and all its passengers died!
    d. Medical errors cause more deaths than motor vehicle accidents, breast cancer or AIDS…..and this study is TEN YEARS OLD and STILL no Federal oversight committee! Oh wait! It gets worse!

    2002: A Study issued by the United States Pharmacopeia (USP) concluded that more than 200,000 medication errors occurred during 2002

    2004: CDC reports that 90,000 patient deaths occur each year due to patients contracting hospital acquired infections. http://www.cdc.gov/ncidod/dhqp/pdf/nnis/2004NNISreport.pdf
    a. Many hospital acquired infections are caused by health care workers who fail to wash their hands in between patients.

    2006: Studies assessing the state of hospital patient safety conclude that current progress is slow, results in general are at best modest, and the gap between the best possible care and actual care remains large. http://www.healthgrades.com/media/dms/pdf/PatientSafetyInAmericanHospitalsStudy2006.pdf

    More Facts:

    Preventable medical errors result in extended hospital stays, expensive treatment for chronic medical conditions and astronomical medical costs that are associated with treating debilitating life-long illnesses. Some experts state that these costs may be in the range of $150-200 Billion dollars per year. Gee, where else could we spend that money??? Quick reminder:

    ALL of the aforementioned happened under the nose of our Federal Government. And we want them to regulate Health Care?? Let’s not save ALL of our anger for the “greedy” insurance companies and “over paid” doctors and CEO’s. Let’s focus our Anger on our GOVERNMENT who has allowed this systemic problem to continue over three administrations!

    Ask yourself, why does the health care industry basically regulate and report on itself? Why is certification and accreditation voluntary? Why don’t we have a Federal agency that acts like the FAA and investigate medical mistakes, just like airline accidents or near misses? Why do only some states have mandatory reporting requirements of medical errors? All Good Questions that need to be answered before we hand over our very health freedoms to the same Government to “regulate”.

    In summary, REAL healthcare reform can be accomplished through consumer education, weeding out abuse of existing Federal entitlement programs (via a legitimate needs assessment) and increased funding and expansion of existing State sponsored Risk Pools so that people who are declined for insurance have an affordable option to continue coverage if declined on the individual major medical market.

    Following these few simple steps will go a long way towards not only maintaining our current health care system, but also towards keeping the bulk of our nations risk where it belongs, namely with the private health insurance industry.

    In light of the recent multi Trillion Dollar “Bail Outs” and many other failing corporations coming to the table with their hats in their hands (and their private jets on the tarmac) the last thing our government should do is start cutting more blind “bail out” checks in an effort to “reform” the U.S. health care system.

    More on WHY the Wall Street Journal refers to these bills as “The Worst Bills Ever”: http://www.sbisvcs.com/blog.htm

  40. I plan on filing for divorce in the next month.
    I am on our family plan health insurance plan with my husband who is self employed.
    I have a preexisting condition and was told by the insurance company that since I am currently insured by them they can easily switch me over to an individual policy from the family policy. I will need my husbands signature to do that since I THINK he would be the one considered to be the GROUP ADMINISTRATOR of the policy, that being said I am not sure what to do …… should I file for divorce first , which most likely will tick my husband off, or should I ask him to sign the insurance release first which will give him heads up to what is coming next? For the record I am not trying to screw him over , let me just say ….there are way TOO many women in my marriage….

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