Sunday, March 16, 2014

Health Insurance Strategy : Updated

I posted last year about my health insurance strategy, but have made a major change since then. My insurance strategy has been to buy high deductible policies (across the board for any insurance) for true emergencies only and save a reserve fund to handle smaller matters myself.

Last year, I left my corporate career to pursue writing and photography on my own (technically unemployed), but bought a high deductible health insurance policy through Blue Cross Blue Shield. I put in over $1000 in premiums since buying the policy (using my own after tax money) which was painful since it's a policy I hope I never have to use - it had essentially a $17,000 deductible. I thought I was being responsible.

What changed: I received a letter from my health insurance company that due to the 'Affordable Care Act', my old policy would no longer be available. It was being replaced by essentially the same coverage (still a $17,000 deductible), but would now cost 3x the premium. What was a $71/month premium would now be a $220/month premium. What the !?!?!?  That's $2640 per year. We're getting on par with my food bill here.  It's essentially a mandate to go back to work for someone else. All for a $17,000 deductible policy I hope I never need to use.

At this point, I cannot endorse supporting what seems to me a failed system. In the spirit of capitalism to vote with your dollars, I canceled my health insurance policy. Looking back over the last 20 years, the only time I visited the doctor was for stomach troubles. The first thing I'd told the doctor was that it felt like I had food poisoning all the time. He never asked me about food; just ran every other test in the book over the next year. They charged my insurance company thousands of dollars, poked & prodded me, all to just pat me on the head and tell me I probably had IBS. Experimental pills were prescribed to mess with my colon; I opted out. (After subsequent self experimentation, I've concluded I was gluten sensitive. I removed gluten from my diet, and my acute issues went away. Many of my health posts discuss my food strategies which I hope make it less likely that I will need chronic medical attention.)

The Rub: There is going to be upcoming penalties for people who do not buy policies & have to pay taxes. My understanding is the penalty will kick in for anyone with income after deductions (last year, the standard deduction limit was $10,000 per year for individuals). Looks like the penalty is $695 per person by 2016 or 2.5% of your income if that's greater. This does effect my options for converting retirement accounts to a Roth IRA which utterly stinks. Hopefully there's an exemption somewhere I missed for wannabe writers... This mandate seems illegal to me since I'd be paying a penalty even if I'm no burden on the system. I mean, if you are paying for all medical expenses out of pocket or do not have any medical expenses, why are you charged an additional penalty 'just in case' you might not pay at some point in the future? Seems like a racket.

So, as scary as it is since for most of my life I had thought the system 'would take care of me', I'm saving my premiums per month to pay for everything out of pocket. Maybe the good news is they won't order so many weird tests since I won't have insurance & would be more interested in discussing options... I'm just doing the best I can here with what I know.

Anyway, it's done for now, but I'm always learning; let me know if you have any comments or feedback! Thanks :)

Blog Post by Laura A Knauth

No comments:

Comments Welcome!