Friday, January 25, 2013

Health Insurance: To Buy or Not to Buy

I just changed my health insurance plan today. I will in all likelihood be changing again in about a year.

Like many individuals and businesses, I am trying to sort out the changes that are coming as Obamacare  will be implemented at about this time next year. So I spent a bit of time grilling my insurance agent today.

The following is my best guess as to my options come next year. I can stick with my plan, which has an $11,000 deductible and costs us (wife and kid too) about $450 per month, though that amount might rise. Or, I can scrap my plan entirely and pay a $750 penalty/tax. That amount is less than two months worth of premiums. Now if I or any family member were to get seriously ill or have an accident such that we needed expensive care, we can sign up for insurance at that time. It would certainly cost more than my current plan, but I could then scrap the plan again once I have received my medical care.

As a math question this is rather easy. It makes no sense to buy insurance for $450 per month when I essentially already have insurance, insofar as I can buy it despite any pre-existing condition. Instead, I merely pay a $750 tax which amounts to less than 2 months worth of worthless insurance coverage. So, from a dollars and good sense perspective, I should drop my coverage and  thereafter buy and scrap insurance as needed.

But is there a moral element that I am missing? Do I have an obligation as a citizen to contribute to the general welfare of others via my participation in an insurance program? Is it OK to be a free rider?

At this point, my answers are no, no and yes, respectively. The government has passed a law which creates huge incentives for me to drop my health insurance, coupled with disincentives, in the form of huge premium increases, for keeping my insurance.  I don't feel a moral obligation to try to prop up a poorly designed system via my participation in a health plan. The system will certainly collapse and I hope that what replaces it is not, as I fear, even worse.


Anonymous said...

To buy or not to buy - that is a problem. The rates you quote are a bargain compared to what The City of Racine pays - but then they are self insured and have a Cadillac plan.

While Mayor John Dickert proclaims the City of Racine is broke, that more funds are needed, and that taxes must be raised beyond reasonable limits – One must stop and ask – IS the City of Racine overpaying for employees? Are salaries and compensation in line with the 21st. C Global economic reality? How can a resident make a decision if City Hall hides the compensation of employees?

In the spirit that an informed electorate can make a better decision – the entire list of City Employee salaries for 2012 is being published. Remember that the salaries shown don’t include the non-taxed Benefits package that often adds $20,000 – $30,000+ to their compensation.

All 716 employees of The City of Racine who make $25,000 or more are detailed.

Racine Exposed

Sean Cranley said...

Good luck with that strategy Denis. My guess is that you won't follow through on it because of the obvious risk to the health and finances of you family in doing so.

Not to mention the self deception or dishonesty of thinking you can sign up for insurance after becoming sick or injured and that you will be able to afford the coverage or that you won't be ripping of the insurance company or passing your costs off to others. If that moral, becoming a taker when you could have been paying for your coverage fari and square all along like other responsible people?

Then there's your foolish notion that you can drop coverage after you've received your medical care. Suppose your injury or illness becomes chronic in nature?

I know I don't look forward to haing to pay more for my healthcare because of your lack of personal responsibility. But better that than see you or one of your family not get treatment.

Maybe you should be woring to figure out how you can use the new law to amke sure that your employees can have access to the medical services you secure for yourself and your family. That would be mmoral.

Denis Navratil said...

Sean, where are the risks to health and finances? $750 is less than $500 X 12, so I would save $5,250 per year by dropping insurance. If I or any in my family need costly medical attention, I can sign up for insurance as the new law forbids consideration of pre-existing conditions. This is not something I am making up, I got this info from a highly experienced insurance agent.

You suggest that I won't be able to afford the coverage. Why would that be? Obamacare, aka the AFFORDABLE Care Act, wouldn't make care unaffordable now would it Sean? Don't tell me that Obama has lied to me. I need something to believe in Sean.

Will I be ripping off an insurance company? Sean, I am impressed with your tender concern for corporations, but I don't share it. They helped design the law, which I will be following, so I will shed no tears for them. Besides, I think they will do just fine.

Now you do pose a serious question re the free rider issue. Do you see any irony in the fact that the law was designed supposedly to address the free rider problem nonetheless introduced great incentives to increase free ridership.

I must conclude that this law has been designed to increase dependency on government rather than to address the free rider problem. It will implode, rather quickly, because of the perverse incentives to drop health insurance coverage. So in the mean time, I will save over $5,000 per year and help Obama destroy our health industry so that you, he, and yours can call for an ever worse "solution" - single payer nationalized health care.

So I am helping you Sean. Your welcome.

Regarding my employees. My business does not generate enough money to pay for the skyrocketing cost of health insurance, nor does Obamacare drive the costs down per his claims. Where do you propose I get the money to pay for their health insurance? I especially would like you to take a shot at answering that question please Sean. Thanks

Anonymous said...

It stands to reason that where there’s sacrifice, there’s someone collecting sacrificial offerings. Where there’s service, there’s someone being served. The man who speaks to you of sacrifice, speaks of slaves and masters. And intends to be the master.

—Ayn Rand

Those of us who missed the call of government service can only now look back in regret.

IF you're looking for money for your Obamacare - ask the government - there does not appear to be a shortage of $$$ there...

Racines Royalty

Sean Cranley said...

Well Denis that sounds too good to be true, so go for it!

But first I would ask your Obamacare "expert" if he and his family are going to avail themselves of this great strategy. If no, then why not? If yes, then I would ask him if he recommends that you take advantage of this great plan and if so would he be willing to put it in writing.

Then you might want ask yourself, if you have a sudden and serious injury or illness requiring a visit to the emergency room followed by hospitalization and perhaps surgery, how soon do you suppose you'll be able to arrange for insurance and sign a policy? How many thousands of dollars will you rack up in expenses in the interim.

Remember, the number one reason for banckruptcies in the U.S. is medical bills, which thanks to the Bu$hite Republicons, you can no longer discharge when you file bankruptcy. AND 26,000 Americans die each year because they can't afford insurance. Ah, but do you and the most disgustingly immoral Ayn Rand (the high priestess of selfishness) care, unless of course it's you.

I'd also ask myself if I was prepared to pay $2085 per year, or 2.5% of my income by 2016 for nothing, while putting my family at risk and subjecting your fellow citizens to the potential costs for your personal irresposibility.

Oh that's right, it's O.K. to do that because your doing us all "a favor" (keep it) and if it rips off the insurance company, that's O.K. too in Denis world, because they wrote the bill, right? Wrong, your Heritage Foundation crafted this market-based Romneycare bill. But now, oh my God it's Obama-socialism! Be afraid, be very afraid!

As for your business I'd say your employees are subsidizing your lifestyle because they are not being compensated in a manner that allows them to meet their basic needs. That may be worthwhile to you, but it isn't doing society a great deal of good in sanctioning your corporate body, especially if we have to pick up the tab for their shortfalls in the form of assistance.

OR as FDR said it better: "No business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By living wages I mean more than a bare subsistence level -- I mean the wages of decent living."

Denis Navratil said...

Sean, I wouldn't call it a great strategy, just the best of my available options. My agent is in a better position than I as he is employed by a multinational corporation and I suspect, for the time being, that he will have a better insurance option than I will.

Your second question is a fair one and I don't have a ready answer at this point. A risk free option is not among the increasingly limited -by the pres - choices before me.

Your attempts to pin the disaster of Obamacare on the Heritage Foundation is too silly to take seriously.

And your last two paragraphs necessitate a separate thread, coming soon.

Sean Cranley said...

Denis said: "Your attempts to pin the disaster of Obamacare on the Heritage Foundation is too silly to take seriously."

Oh really? Please refer to the following February 8, 2012 Wall Street Journal article entitled Heritage Rewrites History (The think tank proposed the individual mandate years before Clinton took office):

EXCERPT: But here is Butler's original description of how the mandate would be enforced, from page 51 of the 1989 (HERITAGE FOUNDATION added by Sean) monograph:

"The requirement to obtain basic insurance would have to be enforced. The easiest way to monitor compliance might be for households to furnish proof of insurance when they file their tax returns. If a family were to cancel its insurance, the insurer would be required to notify the government. If the family did not enroll in another plan before the first insurance coverage lapsed and did not provide evidence of financial problems, a fine might be imposed."

An April 2010 Congressional Research Service memo on "The PPACA Penalty Provision and the Internal Revenue Service" makes clear that ObamaCare incorporates every element of the original Heritage enforcement proposal, including the imposition of a "reporting requirement . . . on anyone who 'provides minimum essential coverage to an individual during a calendar year.' " That is, if you cancel your policy, your insurer must report you to Uncle Sam, just as Butler recommended.

We even noticed a foreshadowing of President Obama's rhetoric in Butler's 1989 proposal. In introducing the mandate, Butler stated: "This requirement would imply a compact between the U.S. government and its citizens: in return for the government's accepting an obligation to devise a market-based system guaranteeing access to care and protecting all families from financial distress due to the cost of an illness, each individual must agree to obtain a minimum level of protection." END EXCERPT.

Where did you think Romneycare came from, the Brookings Institute!?

Denis Navratil said...

The Heritage Foundation did not create the Obamacare legislation, nor did they endorse it, and I am certain that they vigorously opposed it. The only reason to note the tangential and controversial similarities of Obamacare with an old Heritage proposal is to attempt to pin the Obamacare disaster on the right. It is pure bs Sean. Need I reming you of the numbers of Republicans who supported this disaster? Nice try.

Sean Cranley said...

Wow Denis, your self preservation reflexes of dishonesty and denial in the face of documented evidence From the WALL STREET JOURNAL no less, are AMAZING! Did you even dare to subject yourself to reading the truth?

The individual mandate and the requirement to purchase and maintain health insurance are the essence of not only Obamacare, but if it's predecessor Romneycare in MA.

The fact that you cannot accept that the Hertitage Foundation devised this Market-Based solution in 1989, just shows how far over the radical edge and away from true Conservatism you Cult members have gone on the last 24 years.

Congratulations, you have demoonstrated a lack of intellectual integrity of Nemotistical Proportions!

GearHead said...

If ObamaCare was a Heritage Foundation idea, then Sean would obviously be against ObamaCare, wouldn't he? Or is he just being obtuse, yet again? Pity the addled mind of the Burlington Progressive.

Nemo said...

sean, in Butler's original description which page has the formation of the IPAB (aka "Death Panels")? Heh.

Elnora Cowge said...

If you truly believe in a good and careful planning then you should go for it! But, you should seek more information about the insurance that you will get for you and your family. I know that not all health insurance companies give the same services, so you should take time to consider on what to get to know what will cater to your family’s needs the most.

Hershel Duffey said...

Insurances are intended to be a safety net, but a lot of people are having more troubles with their insurance rather than the ordeal they are facing. Why? It’s because a lot tend to overlook some aspects and agreements regarding the insurance they will avail. They just blow through the pages and sign the contract right away. To avoid situations like these, my friends, you simply have to take time and read through every page and examine if the agreement thoroughly. You can never be too stingy with insurance because it can have drastic effects to your life.

Hershel Duffey

Melody Rosenbaum said...

Insurance will be of great help for your family in situations that you least expect. Availing of a plan is a great step, but I agree with Hershel that you need to fully understand the terms and conditions of the plan. Different insurance companies have different offers and different policies. You just have to make sure that the premiums will not harm your monthly budget and the plan’s coverage is exactly what you need for your family.

^- Melody Rosenbaum -^

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