Ask YC: Health Insurance?
I've finally graduated (again), and I'm working on finally getting all the bits of relevant paperwork and such together for my own company. My student health insurance will expire in a few months, and so I was wondering what other entrepreneurs, preferably those located in California, do for health coverage?
28 comments
You're young. Health insurance is going to be relatively cheap.
I just signed up for a plan for my wife and I (26/25 respectively), and it's going to cost us around $250/mo with a reasonable deductible, office copay's and prescription coverage. Dental is an extra $50/mo.
The trick(?) for me was to contact the largest insurance company here in my home state (not California) and ask to speak to their small business department. We built a custom plan rather than using one of their "off-the-shelf" plans that most people would pick. This let me play with the numbers based on our medical history and what we felt we could cover as far as our deductible goes.
Really though, call a few of the largest companies and just start walking through the process.
One tip -- do it before your current insurance expires. At least here, if you are currently covered then there is no way they can decline you(?). The monthly cost may be unreasonable, but they have to at least offer you coverage.
I just signed up for a plan for my wife and I (26/25 respectively), and it's going to cost us around $250/mo with a reasonable deductible, office copay's and prescription coverage. Dental is an extra $50/mo.
The trick(?) for me was to contact the largest insurance company here in my home state (not California) and ask to speak to their small business department. We built a custom plan rather than using one of their "off-the-shelf" plans that most people would pick. This let me play with the numbers based on our medical history and what we felt we could cover as far as our deductible goes.
Really though, call a few of the largest companies and just start walking through the process.
One tip -- do it before your current insurance expires. At least here, if you are currently covered then there is no way they can decline you(?). The monthly cost may be unreasonable, but they have to at least offer you coverage.
It's a good idea to start looking into it now before current insurance expires, but I'm not so sure about the existing coverage mattering much. If there are no preexisting conditions, great, but if you do have at least one, I'm pretty sure they can decline you even with existing insurance coverage except in certain circumstances (e.g. cobra).
http://www.mrmib.ca.gov/MRMIB/MRMIP.shtml is worth looking into if you find yourself unable to get health insurance as a result.
http://www.mrmib.ca.gov/MRMIB/MRMIP.shtml is worth looking into if you find yourself unable to get health insurance as a result.
A high-deductible plan with an HSA is the way to go. You can put up to your deductible into the HSA annually with pre-tax dollars, so after a year or two you have money in the bank in case anything happens (and depending on your cash-flow can either continue to pay into). It's a great deal.
This is what I have done as well. Health Insurance is really just financial disaster (health care originated) insurance. The deductibles are high but they will be more affordable than the alternative. To make things easier on yourself in case you do get a problem, make sure you actually contribute to the account. Between the plan and contributions to the account you might be paying as much as people with a more traditional account but at least that money (minus the premium) is going into your own nest egg.
Maybe it's the state I'm in, but whenever I've looked into high deductible plans it doesn't seem that they save much money.
Most of health insurance premiums go to pay for very expensive treatments, usually at the end of life. Routine medical bills don't add up to much: but bills can add up to $250k pretty quick if you get cancer.
Most of health insurance premiums go to pay for very expensive treatments, usually at the end of life. Routine medical bills don't add up to much: but bills can add up to $250k pretty quick if you get cancer.
I have an HSA as well. It seems like a great choice to me. Why?
I'm in my 20's and haven't had any major health problems, but don't want some random disaster to wipe out my consulting business. I also pay really high taxes on my profits, like to save money, and enjoy buying stocks.
With an HSA, I can put away ~$2,700 a year for health expenses, and that money isn't taxed. I pay Aetna $62 a month, which is $744 a year. How much would I have been taxed on the $2,700 I put away? Probably $700-800 dollars. So it has the benefits of a traditional IRA. While the money is in my HSA, I can make some conservative investments such as buying an ETF that tracks the S&P 500 or if I want more growth, maybe invest in the BRIC's (Brazil/Russia/India/China) or some tech stocks. That money can grow tax free and is reserved in case of emergency.
What if I live a perfectly healthy life and nothing happens? Well, I can withdraw all of that money tax-free when I'm 59.5 (yes that's a long way off). So it has the benefits of a Roth IRA as well.
If you don't have many health problems and have a few thousand in earnings that you can put away each year, I think it's a great deal.
I'm in my 20's and haven't had any major health problems, but don't want some random disaster to wipe out my consulting business. I also pay really high taxes on my profits, like to save money, and enjoy buying stocks.
With an HSA, I can put away ~$2,700 a year for health expenses, and that money isn't taxed. I pay Aetna $62 a month, which is $744 a year. How much would I have been taxed on the $2,700 I put away? Probably $700-800 dollars. So it has the benefits of a traditional IRA. While the money is in my HSA, I can make some conservative investments such as buying an ETF that tracks the S&P 500 or if I want more growth, maybe invest in the BRIC's (Brazil/Russia/India/China) or some tech stocks. That money can grow tax free and is reserved in case of emergency.
What if I live a perfectly healthy life and nothing happens? Well, I can withdraw all of that money tax-free when I'm 59.5 (yes that's a long way off). So it has the benefits of a Roth IRA as well.
If you don't have many health problems and have a few thousand in earnings that you can put away each year, I think it's a great deal.
Tonik by Blue Cross (now called Anthem in CA) has low monthly premiums (as low as $77/month) but pretty high deductibles ($1,500-$5000)
https://www.tonikhealth.com/
https://www.tonikhealth.com/
i have insurance through anthem blue cross, but they've made me so unhappy in so many ways that sometimes I have to actually consider if it's worth it to not have insurance at all. they disgust me so much.
...until something (medically) bad happens, and then I realize getting ripped off by them is not nearly as bad as not having insurance at all.
if you ever decide to go talk to an agent/broker, sometimes they can help you find plans that are right for you, but sometimes mistakes happen, so double check everything. my mom's agent screwed up and she actually went without insurance for something like half a year..i can't imagine what would have happened if anything bad occurred..we didn't catch it until she went for a regular checkup and there was a question about the insurance.
...until something (medically) bad happens, and then I realize getting ripped off by them is not nearly as bad as not having insurance at all.
if you ever decide to go talk to an agent/broker, sometimes they can help you find plans that are right for you, but sometimes mistakes happen, so double check everything. my mom's agent screwed up and she actually went without insurance for something like half a year..i can't imagine what would have happened if anything bad occurred..we didn't catch it until she went for a regular checkup and there was a question about the insurance.
Although this won't help you (unless you're considering moving to the UK ;)) but I'm glad that we've got the NHS (National Health Service) just looking at some of these costs, $300 a month for health insurance! it makes my head spin.
For me if the UK didn't have free health care then I would be probably be paying a lot for all the health care (for a fact I know some medicines I take cost the NHS thousands of pounds a month to buy).
Not to put a downer on things. Good luck setting up your own business.
For me if the UK didn't have free health care then I would be probably be paying a lot for all the health care (for a fact I know some medicines I take cost the NHS thousands of pounds a month to buy).
Not to put a downer on things. Good luck setting up your own business.
I'm from the UK and although free health care sounds good, you really do get what you pay for.
Your health insurance isn't free: the UK has a much higher marginal tax rate.
yes. but it makes health insurance a non-issue for companies. we don't compete over it & we're not scared of loosing it with our jobs.
the American system forces the individual to be responsible for their health (smoker? that'll cost) and keeps workers focussed on pleasing their employers.
the American system forces the individual to be responsible for their health (smoker? that'll cost) and keeps workers focussed on pleasing their employers.
yeah, individuals are responsible. in the UK it's (smoker? that'll cost everyone). people don't pay for the costs they create.
sorry, I didn't want this to turn "political" (I don't think this is the right setting), and not for one minute do I think the NHS is the be all and end all, but for someone in my position (a person with a serious medical condition) I don't think I could survive (financially and probably health-wise) in the US.
So I'm glad that I live in a country which contributes as a whole towards the nations health.
Update: LPTS says we should get political, so lets.
So I'm glad that I live in a country which contributes as a whole towards the nations health.
Update: LPTS says we should get political, so lets.
It's a comment on the disgusting and sad state of politics in America that saying "Everyone who is sick should get care" is a political football rather than a noncontroversial statement of an obvious truth.
I think we should take rich people, steal large percentages of their money, with guns or threats of jail, if necessary, and use it to buy medicine for anyone who needs it.
Underneath all the bullshit (including the libertarian bullshit that will be presently downmodding me), the reason Americans don't have universal healthcare (which, despite the duckspeak from the media, is better at all measures except treating the very rich) is pure racism. The same racist fucks who put George Bush in office will go absolutely batshit at the idea of their money being used to help people that aren't as white as they are. These racist sentiments are then manipulated by the media for the benefit of a controlling elite. This is the real reason the US lacks a social safety net.
Look at what you're saying. I would be broke or dead in America, but let's not get political about it. No, lets get political about it.
Every option for self employed people suck. The entrepreneurial culture suffers because a person with a preexisting condition and a job can't quit to start up a company. This is very stupid and we should all be very pissed off about it.
I think we should take rich people, steal large percentages of their money, with guns or threats of jail, if necessary, and use it to buy medicine for anyone who needs it.
Underneath all the bullshit (including the libertarian bullshit that will be presently downmodding me), the reason Americans don't have universal healthcare (which, despite the duckspeak from the media, is better at all measures except treating the very rich) is pure racism. The same racist fucks who put George Bush in office will go absolutely batshit at the idea of their money being used to help people that aren't as white as they are. These racist sentiments are then manipulated by the media for the benefit of a controlling elite. This is the real reason the US lacks a social safety net.
Look at what you're saying. I would be broke or dead in America, but let's not get political about it. No, lets get political about it.
Every option for self employed people suck. The entrepreneurial culture suffers because a person with a preexisting condition and a job can't quit to start up a company. This is very stupid and we should all be very pissed off about it.
In the US, children get medical insurance on their parent's plan and then, when they grow up, can buy their own coverage before that lapses.
So if you are medically unlucky, it's OK, many people pay into the insurance system, and then the medically unlucky people get money back out.
It's very similar to everyone pays taxes for medical insurance, except that instead of one government medical insurance company we have different ones that compete with each other and subscription is voluntary.
There are various important details. Maybe we get some of them wrong. But the general idea is OK and wouldn't screw you over in principle.
So if you are medically unlucky, it's OK, many people pay into the insurance system, and then the medically unlucky people get money back out.
It's very similar to everyone pays taxes for medical insurance, except that instead of one government medical insurance company we have different ones that compete with each other and subscription is voluntary.
There are various important details. Maybe we get some of them wrong. But the general idea is OK and wouldn't screw you over in principle.
This sounds good except for when Insurance Companies get so good at determining who exactly is likely to be "medically unlucky" that those people are effectively prevented from getting any healthcare at all.
This is a very real problem for entrepreneurs who want to buy their own healthcare, and also for very small companies. I know of one company that was basically prevented from hiring an extremely talented individual because that individual was flagged as a high risk to be "medically unlucky", and if she joined the company than everyone in the company would be ineligible for healthcare - in this particular instance if you're less than five people than you can't buy a group policy with one of those five being a high-risk individual.
So these high risk individuals are either able to join a large company where they can be covered in a large group plan (better hope you're a skilled worker, since very low-end employers have incentives to hire part-timers or contractors to avoid paying benefits), or they have no coverage and go to the emergency room when catastrophic problems emerge, at great cost to the taxpayers who pay for those emergency rooms which (for quite good moral reasons) don't turn away patients who can't afford visits.
Maybe this is one of the things you grouped under "various important details", but I think it's more than a detail - denying coverage to risky people is going to be an inherent consequence of introducing profit motives into health insurance.
I don't necessarily think socialized medicine is the answer, given the inefficiencies it introduces. The best middle ground might be greater regulation of insurance companies to prohibit them from denying coverage to sick individuals. But given the risks on each side, I would frankly much rather err in the direction of too much socialization.
This is a very real problem for entrepreneurs who want to buy their own healthcare, and also for very small companies. I know of one company that was basically prevented from hiring an extremely talented individual because that individual was flagged as a high risk to be "medically unlucky", and if she joined the company than everyone in the company would be ineligible for healthcare - in this particular instance if you're less than five people than you can't buy a group policy with one of those five being a high-risk individual.
So these high risk individuals are either able to join a large company where they can be covered in a large group plan (better hope you're a skilled worker, since very low-end employers have incentives to hire part-timers or contractors to avoid paying benefits), or they have no coverage and go to the emergency room when catastrophic problems emerge, at great cost to the taxpayers who pay for those emergency rooms which (for quite good moral reasons) don't turn away patients who can't afford visits.
Maybe this is one of the things you grouped under "various important details", but I think it's more than a detail - denying coverage to risky people is going to be an inherent consequence of introducing profit motives into health insurance.
I don't necessarily think socialized medicine is the answer, given the inefficiencies it introduces. The best middle ground might be greater regulation of insurance companies to prohibit them from denying coverage to sick individuals. But given the risks on each side, I would frankly much rather err in the direction of too much socialization.
the high risk individual could have already had individual coverage, and kept it, and been paid a higher salary to compensate for less benefits.
This is Objectivism gone awry. A society of Ayn Randians will ultimately face challenges that leads to its collapse.
I'm not an Objectivist.
I think this is Ayn Rand hate gone awry. You don't know anything about me. And all I really said here is people should be responsible for themselves; that's not some crazy fringe idea, and it's not limited to Objectivists.
And I said it specifically about economics and smoking. Smoking is a choice. I think if people want to damage their health by smoking they should be allowed to, but they should have to pay for it. Do you really think that's crazy and would destroy society?
I think this is Ayn Rand hate gone awry. You don't know anything about me. And all I really said here is people should be responsible for themselves; that's not some crazy fringe idea, and it's not limited to Objectivists.
And I said it specifically about economics and smoking. Smoking is a choice. I think if people want to damage their health by smoking they should be allowed to, but they should have to pay for it. Do you really think that's crazy and would destroy society?
And your view is exactly why the USA is 37th on The World Health Organization's ranking of the world's health systems, below countries like Colombia (GDP $337.286 billion), Chile (GDP $163.792 billion) and Costa Rica (GDP $56.777 billion). The USA's GDP is $13.794 trillion. At least you beat the communists (Cubans) by three places...
See http://news.ycombinator.com/item?id=181697 for a recent discussion on healthcare costs.
<shameless promotion>
If you want someone decent to talk to, my current employer also owns an insurance agency that only does self employed/individual insurance. Here's a list of the agents they have that are licensed in CA (only 6 at the moment)
http://www.usabghome.com/states.php?state=ca
</shameless promotion>
http://www.usabghome.com/states.php?state=ca
</shameless promotion>
Marry a teacher. Turns out they get that stuff for free.
While you're still young and solo Kaiser Perminante has some cheap plans to check out. Some folks hate Kaiser, but if anything serious goes wrong, Kaiser has one of the best operation records of any HMO. When you guys have some cash consider a PEO like Gevity or TriNet. They can get you bigco benefit plans for your startup at reasonable cost.
You have a decision to make: can you self-insure for the minor costs or not? By "self-insure", I mean can you handle up to $2500 or $5000 per year of health costs if you had to?
You can get $500 deductible insurance plan for $400-$600 or $5000 deductible plan for $180-$250.
Look for an HSA or ask someone for help on those.
Look for an HSA or ask someone for help on those.