This diary is intended as a supplement to nyceve's fine diary about the expense of health insurance I'm Going Naked.
I thought this information was too important not to put into a separate diary.
There is a partial solution for some people to the expense of full health care coverage: Major Medical Insurance. Family coverage costs me $750/quarter. Read on.
I started a small business a few years ago and could not afford to provide full health coverage for my family, either personally, or through my business. Fortunately, we had good financial/insurance advisers and they helped us find a solution.
Major Medical Insurance. Like all insurance programs, it sucks. It just sucks less than going naked, or having to pay full monthly premiums.
We got major medical thinking we wanted something to keep us from going bankrupt in the face of, well, Major Medical Bills. We called it catastrophic care--we figured we'd get a card that said we were insured so when the EMT's pulled our bodies out of a car wreck and the hospital did a wallet biopsy, the docs wouldn't just leave us on the gurneys.
Here's the deal:
We have a $5,000/yr/person deductible. After that, the insurance kicks in at 80/20. We figured we could beg, borrow or steal the first $5K for each of us, and the 80/20 would keep us from selling the house if a true disaster struck.
They didn't even cover the birth of our second kid. That cost us $15K out of pocket.
There IS an upside: The insurance company doesn't want you to reach your deductible, so in computing the deductible you get the benefit of their Negotiated Discount Rates from the health providers. Those discount rates are ridiculously cheap-at least when compared to cash prices. For everything from MRI's, to emergency care, to vaccine's the Negotiated Discount Rates are any where from 40% all the way down to 10% of the cash price for health care services. Those are the prices we pay, not the cash price.
Example: My wife got an emergency MRI. List price $1691.00. We paid the discount rate of $390.00--which went toward our deductible which, of course, we never reached.
Screw the deductible! I'm now paying for Major Medical Insurance because of those dicount rates.
There are several points to make here:
- When you look for insurance, agents will rarely steer you to Major Medical, or Catatrophic Care insurance. They think everyone wants the "Cadillac" plan, and that's where they make there money. You may have to hunt, push, persist in order to get them to help you find a plan like this. It's not for everyone, but it can keep you from going broke.
- These plans are NOT for everyone. If you've got access to government or corporate health care, that may be the way you want to go. If you're not in a group and you're not healthy they can turn you down. But if you are healthy, this may be the ticket.
- Before you sign up for a plan, you damned sure want to make sure that you WILL get the benefit of the Negotiated Discount Rates the insurance company has got when paying the bills under the deductible.
- Lastly, the implications of the discount pricing are actually really obscene. If health care providers can actually afford to provide care at the discount rates, why are they charging so much for cash health care? The cash prices the providers charge are actually assesed against the people without healthcare, the ones that can actually least afford to pay the charges. Why? Cash patients, rather than costing the providers an arm and a leg, are actually subsidizing the health insurance companies! I could go on, but you get the point.
In sum: Major Medical sucks. But you get the benefit of the insurance company's discount rates and it will cost something like $250/month to cover your family. You'll still have to pay medical bills out of pocket. But at least you'll have some insurance and you'll be paying cheaper medical bills. Good luck hunting for this stuff.
I hope this helps.