Health Insurance EV question

[FlFishOn]

"However, this fails to take into consideration the power that health insurrance companies have in negotiating lower rates. So their rake is mitigated. "

I've had success getting providers to bill me at PP rates in some situations. Also, there are dozens of expensive proceedures that are common for the insured that are almost worthless health-wise that as a self-pay I decline. Overall I'm 15 years worth of premiums ahead by self-insuring. That includes surgery this year.

Get married to a woman with a steady job and health insurance.

I figured I'd post this as a cautionary tale.

I had always been very healthy. In shape, exercised, ate well, etc. Right after I graduated from college at age 21, I had several part-time jobs, but none with benefits, so I got health insurance on my own. That fall I got ridiculously sick for no apparent reason and almost died. Without boring anyone with details, I ended up spending a month in the hospital three times over the next year and a half after some surgery complications. The doctors never really figured out where the problems came from, only that the random abdominal infection was bacterial.

The bottom line is that the total expenses were over half a million dollars. Without insurance, I shudder to think what would have happened. With it, I still had to fork over a some of my savings, but since I was a compulsive saver, that didn't affect my future much.

So I laugh/cringe whenever someone says they don't need health insurance. You just never know. The $1000-1500 I spent that year ended up saving my future, both literally and financially. Plus when you've almost died, the bad beats don't hurt quite as bad.

[AndysDaddy]

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Do you think bill gates doesnt have insurance on his home because he is so rich he can buy a new one if it burns down?

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Depends on the value of the home. If he has a $400K hunting cabin up in the woods of Washington, I'd say no, he doesn't have insurance for it. Why would he? The varience there makes no difference to him at all. It would be like me insuring my kid's tricycle.

Of course, I'm sure he'd have some kind of umbrella policy against liability for the place, but that's not what we are talking about here.
--
Scott

[Theodore Donald Kiravatsos]

I ain't reading all the posts here...sorry if this is duplicated...

What you can buy now is stuff called "High Deductible" health insurance. If you get the right plan, you would pay out of pocket your first $2000 of claims or so, per year, and then get everything covered after that. From an dollar EV standpoint, this will be your lowest premiums and still provide a lot of protection if something horrible happens.

Check with your insurer and make sure that they can rate you by your age. If not (age-specific rating did not used to be legal for BCBS in Michigan, just legal for EVERYONE ELSE), then there will be no way in hell you are paying proper rates for someone your age. This will most likely not apply where you live, but just thought I'd throw that out there.

You might even want to consider that someone may ask you to pee for them, I don't know much about individual insurance. Although I realize that that applies more to Life Insurance, health insurers are getting more and bigger pickles up their butts these days.

[MyTurn2Raise]

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You should at least get major medical. The big problem is something major happening and wiping out your bankroll (or a large portion of it) which costs you potential money you would have made.

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this post is exactly right and the reason that I, a healthy 26 year old, carry major medical for under $100 a month. The possibility of a large negative event is too big for me to ignore

[MicroBob]

the part about the companies negotiating for a better price is relevant.

I had also read (somewhere on these forums awhile back...so take that fwiw) that health-insurance is +EV because you can actually get better value for your money because the companies are investing it/earning interest on it.
So the value you are getting is partly from the combined interest of all the money the company has (meaning a higher percentage than if you just invested that money on your own).

Probably not enough to make up for the profit-margin that the companies have I would guess...but this seemed to be the argument that was being made.



I really don't know how it really works....but I can see how it would be possible:


Company makes 10% interest on all the money (including yours).
Company pays out 95% of all the money they have for their customers various surgeries/medications.

If they're paying out only 5% less...but it's AFTER they make 10% interest on it....then the power of all the combined money making more interest actually gives you an overlay on your health-insurance premiums.



I have absolutely no idea whether this is how it works or not....but I find it plausible enough.

[gabyyyyy]

Under 35 I would say there is no need for insurance.

Older than 35 it is necessary.

Reason being most people under 35 do not have the assets to justify having insurance. Also most people under 35 will not have any major illnesses except an injury from an auto accident. Accident related injuries are usually covered by your auto insurance.

[Shoe]

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Under 35 I would say there is no need for insurance.

Older than 35 it is necessary.

Reason being most people under 35 do not have the assets to justify having insurance. Also most people under 35 will not have any major illnesses except an injury from an auto accident. Accident related injuries are usually covered by your auto insurance.

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My friend just got his appendix out... cost over 20k... good thing he had insurance. Unexpected things happen, even to young people.

I agree that all insurance is -EV (not only are you paying for your expenses, but for everyone else who commits fraud, and all the adminsitrative costs plus the companies profit), but unless you are a multi-millionare, the risk of needing insurance is just too big. If your young and healthy, get insurance with a high deductible, mine was around $80 a month.

EDIT: Just read through the some other posts in this thread, and it could be +EV just from the better prices the insurance companies are able to negotiate. They would try to charge you a lot more otherwise.

[grinin]

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Reason being most people under 35 do not have the assets to justify having insurance

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What you are saying is take the risk, if something bad happens go bankrupt, get medicaid to cover the worst of it, and hope to God that you do not need some really expensive procedures/prescriptions/etc that are not covered through the welfare system.

Great Advice [img]/images/graemlins/mad.gif[/img] Anybody that doesn't really want to get anywhere in life should take you right up on that one.

I would also like to point out that the people that you are pitching this to, would also be the ones that would likely have the absolute minimum for auto insurance and if you have ever been in a serious accident you would see that 10K would take you about as far as you could spit.