Note to mods - I’m looking for both concrete risk data and opinions. If you feel this is more of an IMHO question please move.
As a commercial Real Estate agent I’m an independent contractor and have to insure myself. Over the past 15 years I have always carried high deductible term plans to cover my two kids (11 and 15 years old) and myself. Although we have had had our bumps and brusies, allergies, sinus infections, emergency room cuts and one broken bone (my son) I never ever gotten close to going beyond the $ 2500. per person deductible where the insurance company would take up the slack.
I’m a single (divorced) non-smoking, 44 year old male in good health and my insurance is now up to almost $ 900 per quarter for this high deductible plan. I’m will admit I’m more than a bit pissed at the ever increasing cost. Intellectually I understand the rationale of increasing risk to the insurer as I get older, but there is a part of me that is kind of fed up at pumping ever increasing amounts into this bottomless hole.
Having said this, I’m weighing the advisability of putting the insurance money (say approx $ 4,000 annually) into a pre-tax medical savings account along with significant additional funds to cover contingencies and essentially “self insure”. I know that there are a variety of accidents that could theoretically bankrupt me if I go this route and I have seen various older agents have to have (assumedly) expensive cancer and cardiac procedures performed as they entered their 60’s. I want to weigh (to the extent possible) the real world actuarial risks of an accident for someone in my category and get some recommendations as to funding levels, and whether this is a good or bad idea risk wise based on the numbers.
I realize that this isn’t responsive to your question, but why not just crank up your deductible to $5000, $10000 or even more? Your premiums will drop dramatically; in essence you’ll be self-insured except for the small risk of catastrophic illness?
Absolutely not. They are 11 and 15 and I do provide coverage for them. If the risks are manageable (and they may not be) I would prefer to have the 4,000 annually going towards a college fund rather than the insurance co. IIRC my policy does not have deductibles available over 5,000 and the drop in price is only about 400 annually or so if I do this so I woulds still be interested in the risk factors of going bare and self insuring. My policy cost has been increasing about 500 annually over the past 3-4 years (with no claims) and I’m really getting to the point of wondering where it’s going to end and what I’m getting for
$ 4,000 annually that I couldn’t manage the risk of myself.
My ex is on a group policy with a large retailer where she works, so if I did this I would shift the kids to her policy and pay her the difference in additonal cost for her to insure them on her policy. My real fear is taking a big hit and getting wiped out and what the risk of this happening is. It just doesn’t seem like a great deal for a healthy person but accidents can happen.
I’m glad to hear you have an alternative for the kids. If you proposed “self insuring” all 3 of you, my advice would be, “don’t even think about it.”
I can’t help you assess your chances of an accident. But you can Google “Health Risk Assessment” and find a number of programs that will give you your chances of heart attack, stroke, diabetes and the like, once you answered a series of medical history and lifestyle questions.
I agree with a parallel avenue of research suggested by Violet, which is the cost of competitive policies. And lucwarm’s advice seems eminently sensible, that you maintain minimal coverage for catastrohpic illness/accident.
A person I work with looked at plans that only cover major events. The coverage had so many rules that it did not seem as though it would really work. For instance, if one needs some serious work, it is usually necessary to see more than one dr/occurance or whatever.
It seemed as though the insurance co covered themselves in the event that the insured that has a LOW payment and high ded - LOW PAY=LIMITED PAYOUT.
If one comes down with cancer, and needs continous treatment from many different providers/tests/drugs, the limits/occurance come in. SO, the idea of paying relatively low $ and only using insurance to protect from the 6 figure medical bill, did not really seem to work. – In the dozen or so plans that my coworker looked at. Not to say that the plan doesn’t exist.
I need to have my leg replaced every 5 years, and I have had my gall bladder yanked, and a cyst removed from my arm in the past 5 years; even so, I would still be way ahead of the game if I just saved the $200/month and paid out of my pocket
Pardon my curiosity, but would that $200 figure hold true if you spun the calendar back to whatever event/illness cost you your leg in the first place?
YES,
A birth defect caused several problems.
I used the most medically active time of my life, and I’m still behind because I pay for insurance.
But ins is ins, it is ment to work that way. Besides, as I get older more stuff will probably start bustin’, maybe I’ll get ahead - if I’m NOT lucky.
(I worked for State Farm right when their new health insurance plan Fortis came out. We played around on the computers one day and figured that for just me and WV_Man to be covered, it’d be around $400 a month … that was without a maternity rider, too, not to mention no coverage for WV_Toddler.)
So 900 a quarter for 3 people doesn’t sound too bad.
I have often pondered this myself, seeing as Cobra coverage for me and my family (my husband is disabled) would be $900 per MONTH for us. However, I just look back to all my medical bills for the past year. My 30 year old husband (yes, thirty) had a stroke in Feb 01, and the total costs for this stroke (which entailed a week in intensive care and two weeks in a regular hospital bed) were over $500,000, NOT including the follow up doctor visits, additional tests (MRIs, bloodwork, etc).
IMHO, I would advise anyone who could afford health insurance to get it, cause even though it’s a ripoff, you will need it for that “just in case”, and with two kids that chance triples. And I have no doubt in my mind that the excellent care my husband got from the hospital had EVERYTHING to do with his health insurance coverage, and that probably saved his life.
I used to work in health insurance and from what you’ve said so far and not knowing the specifics of the plans involved I would definitely encourage you to get the kids on your ex’s policy ASAP. As a rule group policies are much less expensive and provide much better coverage than individual policies. Regardless of what you decide for your own coverage the children will 99 times out of 100 be better off. Just make sure that your ex follows the rules of her plan for adding them. if she doesn’t do it right they could be subject to waiting periods before the coverage becomes effective.