Self insured and 1099ers, where do you get your health insurance?

[slashbinslashbash]

I'm in Texas, self-employed, 1099, early 30's, non-nicotine user. BCBS Health Savings Account for the wife and I comes to slightly under $200 a month. $10k annual deductible, BCBS covers 100% beyond that. So it's basically catastrophic insurance. We maxed out contributions to the HSA itself for the past 2 years, so we've got ~$12k in the HSA.

 

[rudeguy]

That's not how it works. There is Medicare fraud, but you greatly exaggerate some paranoia of Hispanics. Florida is a central spot for all kinds of bad things, though.

You are ignorant.

One of the huge problems is illegals on welfare.

But you can't about that because it would destroy your "they do the jobs Americans won't" argument.

 

[alkemyst]

That's not how it works. There is Medicare fraud, but you greatly exaggerate some paranoia of Hispanics. Florida is a central spot for all kinds of bad things, though.

I have known at least a half dozen people that have done this, even when they would have qualified for insurance at work. None of them were destitute.

They make up a story about staying at random places so they have no set address. Act like they don't understand any English, etc.

They haven't remained my friends.

 

[highland145]

Sadly it doesn't work if you are white, but many abuse the system that way. Miami has the largest amount of fraud in the whole system because it's easy for someone to play 'No Habla Engrish!" or speak creole, etc and act dumb then receive free health care and supplies.

Maybe Fl should follow Kali and make it legal for illegals to get all the assistance they want. Then it wouldn't be fraud. I'd like to find some way to save on my kid's college tuition and Fl is closer.

 

[AustinInDallas]

those 10k and 15k deductibles seem a little too steep for me

 

[rudeguy]

those 10k and 15k deductibles seem a little too steep for me

if your family doesn't get sick much, they are awesome. Put your money into the HSA rather than paying into insurance premiums.

For families like mine where you have guaranteed monthly expenses, they just don't work. But then again, I was paying roughly $500/month for insurance and FSA when I had insurance. I am not actually coming out all that far behind unless something catastrophic happens.

 

[highland145]

those 10k and 15k deductibles seem a little too steep for me

For sure. The only upside is get a HSA approved plan and you can put tax free $$ into a HSA savings account to pay for the $10K and other uncovered medical expenses. 2013 $6350/ couple, iirc. So if you're young and healthy you can build a good pot for future use.

 

[Craig234]

I have known at least a half dozen people that have done this, even when they would have qualified for insurance at work. None of them were destitute.

They make up a story about staying at random places so they have no set address. Act like they don't understand any English, etc.

They haven't remained my friends.

First, thanks for sharing personal experience, that's useful. Second, I still stand by my statements - I didn't say you invented that fraud or it doens't exist, I was saying I think you have an exaggerated idea of how much of the fraud that is, some people tend to point only at some Hispanic person defrauding for a small amount, and not pay any attention to perhaps a white person defrauding for millions with a company.

I'm glad to hear you don't remain friends with people who do that.

I'm going to repeat my concern that Republicans tend to slash enforcement budgets for fraud, allowing it to fester more.

Perhaps we can agree that government programs should have appropriate levels of fraud prevention, requiring investigators to monitor use and catch and prosecute fraud.

I support the programs for their intended purpose and am very much against the fraud you mention. I just don't throw the baby out with the bathwater.

That fraud has all kinds of harm, including reducing public support for the programs.

 

[slashbinslashbash]

those 10k and 15k deductibles seem a little too steep for me

The thing you might not realize is, most standard plans start covering way earlier, but once the initial deductible has been paid, they are like 20% co-pay to infinity. So say one of your insured family members gets way sick, say $100,000 cancer sick. In my HSA plan, I'm out the first $10k, then that's it, I'm covered for the other $90k (per year). In a standard plan, your deductible might be $1000 up-front, then 20% co-pay beyond that. So you're out $1000 + 20% of $99,000 = $20,800.

Of course that's an extreme example, but IMO that's what insurance should be for; the extremes. There's a major philosophical difference between "insurance" and a "health care plan", I personally prefer "insurance" to cover only the major unexpected stuff, and to pay routine stuff out of pocket. Do you insure your car for routine maintenance like oil changes and new tires?

Then this gets to my major problem with the medical industry today: since most people are paying for these high-cost, high-coverage plans, they have no qualms about using them. Routinely. Every takes an "abundance of caution" approach (patients, doctors, nurses) and countless money is wasted each year on pointless tests, medications, and procedures. When it's "use it or lose it" like a standard plan (if I'm paying $800 a month, you bet your ass I'm going to be using it) then you have no incentive to limit your consumption of medical stuff. So people do things like go to the dentist 4 times a year, get new glasses every year at $500 a pop for prescription + lenses, etc. Which is all pointless, except it keeps the dentists and optometrists in business. I'm not saying that I don't understand or appreciate a preventative approach to medicine; however, I believe that costs have spiraled way out of proportion to the benefit provided.

Getting back to the practical issues... with the standard plan, you're paying like $500 a month (conservatively -- probably more like $700 or $800 a month) instead of $200 a month, your whole life, whether anybody gets sick or not. Take that $3600 extra per year, put it into the HSA, and in 3 years of non-sickness, you've got your $10k covered and earning interest (HSA's can be invested like IRA's, and if you've got money in the account when you retire, it can be rolled over into an IRA). (BTW the HSA contributions and withdrawals are also income tax free, so you're effectively saving 25% or more on health care costs that you pay for out of the HSA savings.)

As another note, IIRC, I think I could have gone with a $5k deductible and it would have been in the $280 a month range. Again, this is coverage for 2 adults only. Pregnancy is not covered under individual health care plans in Texas.

 

[alkemyst]

Maybe Fl should follow Kali and make it legal for illegals to get all the assistance they want. Then it wouldn't be fraud. I'd like to find some way to save on my kid's college tuition and Fl is closer.

It's legal here for illegals to get free assistance. The problem I was explaining is legal citizens as well as gainfully employed ones; playing that they are illegals.

 

[alkemyst]

For sure. The only upside is get a HSA approved plan and you can put tax free $$ into a HSA savings account to pay for the $10K and other uncovered medical expenses. 2013 $6350/ couple, iirc. So if you're young and healthy you can build a good pot for future use.

For 2013 you are limited to $6450 as a couple or family and $3250 if single. IIRC, you can't have more than that in a given year, but you can rollover and contribute up to that limit indefinitely.

At $6450, that still leaves a lot of cash to cover if one did hit their full $15k deductible, and even pre-tax that $6450 + the other $3550 is a large amount of change for most families to come up with. Most people aren't making six figures a year where this becomes a wash, and many that do have group coverage anyway.

 

[dullard]

COBRA just lets you pay what your employer was paying for the same coverage you were previously getting. Of course it's going to cost more than your catastrophic coverage, because it actually covers a lot more.

BCBS that I had was because it was the EXACT same BCBS plan offered by my employer. The problem was that my employer was a university and I was lumped in with a bunch of 60+ year old professors so the premiums were sky high even after the employer's contribution. I had a small business on the side, and I could buy my own insurance just as easily. The exact same plan cost me nearly 5x less (even after the employer's small contribution).

There is nothing wrong with BCBS coverage.

 

[dullard]

those 10k and 15k deductibles seem a little too steep for me

You can get an HSA with deductibles as low as $2500 for a family. They don't have to be $10k or higher.


An HSA is the best legal tax dodge around. Think about it in these terms:

• With an IRA, 401(k), or similar, you put money in tax-deferred. But when you withdraw it you have to pay taxes on the original amount and on the gains.
• With a Roth IRA, you pay taxes on the original amount, but the gains are tax free.
• With an HSA, as long as you pay for medical expenses (and who won't have medical expenses later in life), you neither pay tax on the original amount NOR the gains.

Read that again, no taxes on the principal or any gains. No investment vehicle is better at the moment. Nothing else comes close. Of course, you have to be able to afford to put money in the HSA and pay for your regular medical bills out of pocket in the beginning. So it works best for younger professionals who have some spare cash and low medical bills.

Even better, for upper-middle income level people, the location of the HSA deduction on your tax form often qualifies you for deductions and credits for which you otherwise earn too much money to qualify for. Or, in the extremely rare case of a poor person with an HSA it can get you into tons of welfare-like programs that you otherwise wouldn't qualify for.

 

[maziwanka]

i have cigna down in texas. pretty good rates and nearly same coverage i had with cigna while working in NYC

 

[mugs]

BCBS that I had was because it was the EXACT same BCBS plan offered by my employer. The problem was that my employer was a university and I was lumped in with a bunch of 60+ year old professors so the premiums were sky high even after the employer's contribution. I had a small business on the side, and I could buy my own insurance just as easily. The exact same plan cost me nearly 5x less (even after the employer's small contribution).

There is nothing wrong with BCBS coverage.

OK, so why are you advising people to avoid COBRA when the issue was apparently with your former employer, not with COBRA?

 

[highland145]

It's legal here for illegals to get free assistance. The problem I was explaining is legal citizens as well as gainfully employed ones; playing that they are illegals.

Knew what you were saying but didn't realize the bolded. In state tuition for college too?

For 2013 you are limited to $6450 as a couple or family and $3250 if single. IIRC, you can't have more than that in a given year, but you can rollover and contribute up to that limit indefinitely.

Yep. My mistake.

 

[dullard]

OK, so why are you advising people to avoid COBRA when the issue was apparently with your former employer, not with COBRA?

For people on Anandtech (generally young professionals, especially in this thread about self-employed Anandtech users), the vast majority of them can find better or equivalent health insurance cheaper than with COBRA. I gave myself as one example. COBRA is and always was the option to take when there were no other options. Too many people take it as the first option and don't shop around. Just because a person's former employer choose one option for the group doesn't mean it is the best option for that person.

Why are you advocating against shopping around to see if we can get better coverage for less money? Please tell me how more information is bad in this choice.

 

[mugs]

Why are you advocating against shopping around to see if we can get better coverage for less money? Please tell me how more information is bad in this choice.

I'm not, I'm just questioning this misinformation:

Cobra should only be used as a last resort.

It seems now that your intention was to say that people should treat COBRA the same as any other health plan. You should have said that instead of saying it should only be used as a last resort.