Jul 07 2008

Guest post: What I learned about health insurance


This is a guest post from my friend, KG.

Like many 20-somethings, my husband and I had no health insurance for the past 10 months. He is in graduate school, and I’ve been freelancing, working in retail and looking for a full-time job, so neither of us had a company-sponsored benefits package. To be honest, I was convinced that a full-time job was just around the corner, and I didn’t want to go through the hassle and expense of setting up temporary insurance. I also convinced myself, without really looking into it, that it was just too expensive, especially since we were unmarried and would have needed individual accounts. Bad idea.

Luckily, my husband and I haven’t had an urgent need for insurance. Now our situation has changed. We were married last month, and a week after returning from the honeymoon, I was hired full-time at a job with a pretty generous benefits package. I was thrilled at the timing. Because we’re married, Tony was eligible as a dependent, and I thought we’d both be covered on the company’s dime. Not so.

My company, like a lot of companies, is not so generous when it comes to spouse and family benefits. They cover 90% of my health insurance premium and 100% for dental, life insurance, and disability. That brings my total premium cost to about $27 a month. While my husband is eligible as a dependent, we would be responsible for 100% of his premium.

When my HR rep told me the cost to insure my husband for health and dental only, my jaw dropped. $375 a month. (!!!!!) I was convinced that I had been right all along. Health insurance really was too expensive for the self-employed. But with my new full-time job, the $375 was doable. It was going to hurt our savings plans, but it was doable. Obviously health insurance for my husband is a priority for me, so I signed him up. Big mistake.

I decided that it couldn’t hurt to do some research to see if we could get a lower rate (Duh). I was shocked at all of the options. It turns out, even as an unmarried couple, we probably could have afforded a high-deductible catastrophic insurance plan that could have prevented us from major medical debt. Doh.

A good place to start is eHealthInsurance.com. Here you’ll find a list of policies for several different providers in your area. You can search filling out a questionnaire to determine your needs or by price or coverage type. You can compare various policies in a handy table. This is particularly good for people like me who were covered by their parents’ policy through college and don’t know a lot about insurance. I didn’t end up going with a provider featured on the site, but it did help me figure out what kind of coverage I needed before I shopped around on other sites.

For young, relatively healthy people with no children, a high deductible policy is a good way to keep costs low. I found policies with $4000-$5000 deductibles for as low as $60 a month for a single person. Unfortunately, these plans offer little in terms of keeping costs low for routine office visits or prescriptions, so your out-of-pocket expenses for regular medical treatments will be high. But they can save you from HUGE amounts of debt in the event of a medical emergency.

Another good way to lower premiums is a policy with an HSA or health savings account. These policies also generally have higher deductibles and out-of-pocket costs, but they allow you to set up an account where a portion of your pre-tax income is put aside specifically for medical expenses. Many of these policies cover 100% for routine preventative care, like checkups and gynecological exams, making these policies even better for young, healthy people who don’t want to pay a fortune to stay that way.

For network providers, it’s important to note that while larger providers may have higher premiums, you should check the list for in-network doctors in your area before signing up with a smaller company. It’s good to have a long list of options when looking for a primary care physician or a second opinion.

What did I find for my 24-year-old husband? A traditional PPO through Blue Cross with a $2500 deductible, $15 copay for office visits, $15 copay for yearly eye exams, and prescriptions as low as $10 for $137 a month! For hospital visits or surgeries, they cover 80% after we hit the deductible. I could have added dental to his policy for $38, but I decided to keep him on my company’s dental policy because it’s a better plan for $27 a month. That brings his insurance total up to $164 a month. That’s over $200 cheaper than my company’s policy for dependants, and it’s comparable coverage.

What did I learn? While comprehensive coverage may be much too high for a struggling single person or married couple to afford, the high-deductible plans suitable for young, healthy people with no children are surprisingly affordable. Also, unless your company pays a large percentage of the premium for dependants as well as the policyholder, shop around for comparable coverage at a lower rate!

It’s also worth noting, for people who absolutely cannot afford even a high-deductible policy, www.coverageforall.org can help you determine if you qualify for state-sponsored benefits. It’s unlikely that single people with no children will qualify, but it might be helpful for people with disabilities, single moms, or college students in some states.

Posted under Uncategorized | 5 Comments »

5 Responses to “Guest post: What I learned about health insurance”

  1. We just did this same comparison last week and ending up switching to my husband’s high deductible/HSA plan rather than the typical PPO insurance plan through my employer. We did the math, and figured out, in a typical case, we’re better off with high deductible plan’s lower premiums (because we’re also 24, married, with no kids, and pretty healthy), and, worst case scenario, the high deductible plan had a lower out-of-pocket maximum than my insurance- and it could all come from the HSA, which we plan on keeping funded to the OOP, for emergencies.

    It’s the not-quite-worst-case-scenario where the insurance ends up being a better deal, by my calculations.

    There’s so much to figure out & learn about all this health insurance stuff! I think it’s important to understand, though, so good job!

  2. Thanks for this information. This is something we will begin to look into in about 5 months. My husbands military insurance (TriCare) runs out for myself and our kids in November. He’s retired and we only get to continue insurance coverage as dependents for 6 months after his retirement. He continues to receive for 5 years and insurance for his injuries from Iraq for the rest of his life.

    Again thanks.

  3. Hi Kacie

    I did read this post this morning and that’s probably why the issue of being uninsured was rolling around in my mind.

    We have dental, life and disability but not medical. We have been looking into some options such as medi-share.

    Our car will be paid off this month and we should be able to get some health insurance soon. We have been fortunate not to have had any major medical problems.

    We know how important it is to have insurance but being self employed it just seems as though the options are so exspensive when you are in debt. I am so glad that we will be debt free except for the house after July.

    I am doing the debt free dance right now.

    Hadias’s last blog post..Affordable Prescription Eyeglasses

  4. I work for eHealthInsurance.com. I’m glad to hear that we were able to help you out, even if you didn’t purchase your plan through us. It sounds like you went with an insurance company we don’t represent? (We represent over 170 nationwide.)

    Just out of curiosity, did you purchase directly from the insurance company? For future reference, I would only point out that if you purchase through a licensed agent, like eHealthInsurance, you won’t pay any more for your coverage and you’ll get an agent that works for you and can be your advocate with the insurance company if you ever have questions about your coverage or how a claim was processed.

    – Amir M, licensed agent

  5. You have to purchase family health plan …there are so many companies …provides affordable health plan…

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Hey! I'm Kacie, wife and mother of 3. I write about my family's finance: how we save money, improve our spending, and plan for the future.

I hope I can inspire and encourage you to improve your situation. See disclosure.

I'm adopting a much slower-paced posting schedule, and treating this as a hobby blog now.

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