Health Insurance

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Jan 6, 2010 12:35 pm

For those that are indy and are not cover under a spouses health plan...

Any suggestions where to go for a low deductible family plan without having to spend $1600-$2000/Mo.? Is that a typical cost?
I am currently on COBRA and spending $1600/mo.
I know that's the cost of being indy however spending $20k-25k/yr in case someone in my family get's sick is crazy.
Any suggestions?
Thanks.
 
Jan 6, 2010 12:37 pm

Why not HSA?

Jan 6, 2010 12:38 pm
Wet_Blanket:

Why not HSA?



I agree.  Max you should end up spending would be around $20k.  And if you don't use the money in the HSA, you can forward it to the next year.

Jan 6, 2010 12:39 pm

That was a shot in the dark for me...is this what they typically do?

Jan 6, 2010 12:45 pm

Not trying to be ignorant...can you explain.

Jan 6, 2010 12:48 pm

You purchase a high deductible / high risk health care plan - basically covers extreme expensive surgies, etc.

 
You stick money into your HSA (Health Savings Account).  You use this money to pay for doctor visits, etc. up to your high deductible.  Money is pre-tax, and rolls over year after year.  You can also invest it.  You can shop doctors, and often negiotiate lower costs since you are paying cash.
 
At least that is my understanding of them.
Jan 6, 2010 1:32 pm

Those are great, it's what I use.  However, the out-of-pocket costs can be the same as a low-deductible, high-premium plan.

 
Case in point, my daughter has had ear surgery every year for the past 3 years.  I have a 5K/pp 10K/family deductible (I think it's 6/12 this year).  I have blown through that deductible every year with out-of-pocket money (yes, it filtered through the HSA first, but a low-deductible plan has tax-exempt premiums).  So it basically cost me more in these years to have the HD plan.  However, were it not for my daughters condition, it would have saved me a ton, as the premiums are only like $400 (family of 4), and the HSA contributions would have just kept piling up in my account.  So it's sort of a gamble, but either way, you have to either pay a high premium or fund the HSA.  The upside of the HSA is that after you have over-funded it, you can back off on contributions until you start blowing through it.  So for a healthy family (or young, single person), it makes absolute sense.
 
Keep in mind, individual plans (non-group) are not required to covers certain things, like pregnancy, so be SURE you compare the coverage.  If you are a woman (or married to a woman), I would make sure you have this coverage, even if you don't plan on having kids.  There is a little thing called "whoops" that can cost you quite a bit of money.  If you get a group plan (even a "group" of one) as a business owner, it must cover preganancy.  Keep in mind, the group plan will cost more.
 
Jsut find a good insurance agent that can sell multiple products (at least BC/BS, or whatever the major carrier is in your area).
Jan 6, 2010 1:33 pm

Wet_Blanket is right on the money.


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For example in California a couple that is in their early 40’s with 2 kids can get a HSA Compatible Plan with a $10,000.00 deductible with a out of pocket maximum of $10,800.00 per year for 339.00 per month. The Family would also be able to make a pre tax contribution of $6150.00 per year to a HSA account. The same family enrolled in a HMO would cost $1638.00 per month, for a plan with 0 deductible with a out of pocket maximum of 6000.00 per year. You should call a good insurance agent.  


Jan 6, 2010 1:34 pm

Caveat

What I said applies in my state.  Each state may be different.
Jan 6, 2010 1:56 pm

If you are 1099 emp...are the premiums for either plan...High Ded or PPO...tax ded.

I know this is not tax advise.
Jan 6, 2010 1:58 pm

Tax deductable.  But you can't get the HSA if you are covered by an employer plan (or eligible (not sure)).

Jan 6, 2010 1:59 pm

Do you or any members of your family have any health issues?  Do you have any employees?

Jan 6, 2010 2:03 pm

Could you make the argument that a 2k mo premium plan would be good because that 24k that's tax ded.

Jan 6, 2010 2:04 pm

Wait...don't rely on my tax advice.  Confused tax deductible with pre-tax.

Jan 6, 2010 2:13 pm
Wet_Blanket:

Tax deductable.  But you can't get the HSA if you are covered by an employer plan (or eligible (not sure)).

 
Until the ObaPelosiReid Express get their grubby hands on it.
 
 
 
(Did I say that out loud?)
Jan 6, 2010 2:16 pm

Hey don't pollute this virgin white thread with your hate speech. 

Jan 6, 2010 2:18 pm

I had a professor who was a CPA that did consulting with fairly small businesses.  He was ALL OVER HSAs.  When it made since, he often proposed the business owner to switch to high deductible / HSA plan.  The result was that the business spent less on health insurance, and the employee got more benefits ($).

 
Don't ask me for specifics.
Jan 6, 2010 2:33 pm

I'm not sure how having it high deductible combined with an HSA is helpful to someone with a decent amount of medical bills unless they can afford to pay for the medical costs out of pocket instead of using the HSA.

Jan 6, 2010 3:07 pm

^^^^^^^^^This.

 
It does not have to be complicated.  If you are young, healthy, and your kids are as well, HSA/HDHPs work very very well.  If you have any medical issues, lower the deductibles and look for co-pays on office visits.  In the end, there is no such thing as a free lunch.  If you go the HDHP route and fund the HSA, there is little difference in outlay than if you had a lower deductible and co-pays.  The difference is, on an HSA, you control the difference in outlay versus leaving it in the hands of the insurance company.
Jan 6, 2010 3:46 pm

If you are self employed as a sole proprietor your premiums are tax deductible. If you plan right, you can pay for 100% of your medical expense with pre tax dollars, if you use a HSA compatible health insurance with an HSA account. I believe that the most important number when looking at insurance is the premium and the out of pocket maximum.


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