Ask HN: Should I forgoe health insurance in US?

1 points by simplecomplex 6 years ago | 10 comments

My wife and I take no medications and are healthy. Our combined premium is now nearing $1000/mo. I am self employed. I would much rather save the $12,000 a year.

The argument I hear for having health insurance is that they pay for unexpected expenses. But that doesn't make sense to me. If some unexpected health event happened and we ended up in the hospital, and then ended up with $100k bill, wouldn't we be able to just pay that down over time like any other debt? Why is it necessary that insurance pays the debt?

The fact that we currently spend 20% of our after-tax income on health insurance is starting to seem absurd, when we don't actually foresee needing anything but emergency hospital treatment for unexpected accidents.

uberman 6 years ago |

Do you have $100k up front to pay your bill? Hospitals are not banks. They typically don't do "pay over time" and frequently require the uninsured to pre-pay before getting treatment.

You are healthy now, but there are efforts underway to repeal laws that forgive pre-existing conditions. If You you develop a condition that you felt warranted the expense you might (in the future) find it impossible to get coverage.

Why do you feel like you need to pay after tax? If you are self employed, you can typically deduct the cost of health insurance for you and your family unless you are otherwise covered by some other plan or make no income, but as you stated you do have an income. Talk to your accountant.

You feel like making $60k after tax it would be no big deal to pay down an addition $100k medical expense, but the reality is that is probably unlikely. If you have a big medical bill, are you certain you will even be able to continue to make your $60k after tax? I don't think it is unreasonable to question this. For context, two thirds of all bankruptcies in the USA are a result of inability to pay medical expenses and that includes those who actually have insurance.

I/We are well insured thankfully and when my kid broke their arm the cost for the ambulance ride from urgent care to the hospital (urgent care thought it was much too serious for them to deal with) was $1000 just for the 5 min ride. Med-Evac can be 30k or more and these are charges prior to even setting foot in the ER. God forbid you or your family gets injured, but a car wreck involving the primary bread winner will almost certainly ruin you financially for the rest of your life.

In the end though, insurance (all insurance) is a gamble. In the case of health insurance, young/healthy people feel often feel like it is not a good bet.

schoen 6 years ago | |

> You feel like making $60k after tax it would be no big deal to pay down an addition $100k medical expense, but the reality is that is probably unlikely. If you have a big medical bill, are you certain you will even be able to continue to make your $60k after tax?

By the way, another option related to this specific concern is private disability insurance. It can also apparently be a lot cheaper than some kinds of medical coverage and is meant to deal specifically with the risk of lost income due to an unforeseen medical problem. It can potentially provide much higher and longer-lasting coverage than mandatory state disability insurance.

byoung2 6 years ago | | |

My wife and I have disability insurance and it is very reasonable (approx $120 a month for a benefit of about $11000 per month for me, and maybe $80 a month for about $7000 for my wife). It kicks in after 90 days and will continue to pay as long as you are unable to work in your chosen profession up until the end of your working years (65). People typically picture a broken leg in a skiing accident and a security guard can't work, but it is more appropriate for something like cancer or pregnancy-related complications that will prevent you from working for months or years.

seanmcdirmid 6 years ago |

It really depends. Consider:

1. How many assets do you have to protect? Houses, investments, a business. If you have a bit of those, then insurance is good protection against losing them if you get sick for some reason.

2. Are you young with a good health history? Rolling the dice, you are probably low risk and won’t need much in the near future. But it is definitely a dice roll.

3. Hospitals charge more to uninsured than they charge insured. This is because uninsured typically don’t pay and are harder to collect from, so treatment goes up.

4. Likewise, if you don’t pay or they suspect you won’t pay, they don’t have to do a lot of things: just stabilize and release. Got cancer? Well, charity care doesn’t really include that specialist that might save your life.

5. Medical tourism might work if you are open to going to Thailand or India if you get anything serious. Problem is you probably won’t be able to get there for anything emergency.

6. Insurance for individuals (as opposed to group plans) really sucks: it is more expensive (people who don’t get insurance from work are higher risk), it isn’t very tax deductible (employers get a tax break on giving insurance to their employees). It is almost a bad deal, so I get why people would hesitate about it.

rdtwo 6 years ago |

What you are missing is that in the us hospital rates are different for everyone. If you are uninsured you might get billed 5-10x what someone with insurance might get billed. So in the event of something minor like a hospital visit you will get hit with a bill for 10k just for showing up at the hospital and 20-40k for an overnight stay. Catastrophic is the way to go if you need a somewhat deferrable surgery you can go to a different country or game the requirement for a life event that would allow enrollment in a health plan.

Keep in mind that insurance reimbursement/negotiated rates matter. You want an insurance that negotiated a super low payout (though that will limit where you can go for procedures) as that will often greatly reduce your out of pocket payment in situations where you don’t hit the catastrophic cap which will be 99% of cases.

greenyoda 6 years ago | |

It's not just hospital rates. It's also visits to a doctor, lab tests, urgent care facilities, drugs, etc. Providers who are in your insurance "network" negotiate rates with your insurance company that are much lower than the retail rates. The difference can be a factor of 10.

greenyoda 6 years ago |

> My wife and I take no medications and are healthy.

Unfortunately, that could change overnight. Even young, healthy people can get nasty diseases, be in catastrophic accidents, etc. I knew a young, healthy person who went in for a routine checkup and ended up diagnosed with cancer.

While a single hospital stay might cost you $100K, being diagnosed with a chronic disease that requires years of treatment and follow-up could be much more expensive. And especially if your condition leaves you unable to work, your bills might bankrupt you.

> when we don't actually foresee needing anything but emergency hospital treatment for unexpected accidents

Life is inherently unpredictable. Things happen to you that you can't foresee.

schoen 6 years ago |

If, by chance, you're both under 30, you could apparently also consider a "catastrophic" plan.

https://www.healthcare.gov/choose-a-plan/catastrophic-health...

It sounds like some states may be allowed to expand the permissible kinds of less-comprehensive plans in the future under the TCJA. If that can and does happen in your state, you might have more cheaper options in the future that are closer to catastrophic plans but perhaps available to more people.

blacksqr 6 years ago |

A lot of places won't treat you at all if you don't have insurance, unless you have an immediately life-threatening medical condition.

The insurance card is your access ticket to urgent but non-emergency medical care.

blackflame7000 6 years ago |

No, you should at least get catastrophic coverage.