Health Insurance Hacks

As Obamacare becomes prohibitively expensive, here are some ideas of ways to at least partially insure yourself against catastrophic healthcare costs.  From Patrick Watson, via John Mauldin:

Insurance Hacks

I suggested looking for short-term medical coverage if Obamacare becomes unavailable in your area. Reader Mike E., a Colorado insurance broker, added some details.

Temporary insurance will probably continue to be available since it’s not under the ACA restrictions. But there are several caveats:

Not only will it not cover preexisting conditions, many of the temp insurance carriers will deny any coverage if you show preexisting conditions on your application form, even common things like moderate hypertension. Leaving such details off the application is a risky prospect, because the carrier can deny all claims if they find you’ve falsified information. And if they’re receiving major claims, they’ll probably look for a reason to deny them.

The biggest downside is the total benefit limit. As far as I know, there are no plans available with a limit above $2 million. Nonetheless, temp insurance is a good option if you can qualify.

Some readers may be in a position to change their permanent residence (e.g., to a second home). Traditionally, the choice of which to use has been based on state tax rates, but now access (and cost) of health insurance may be a bigger factor.

We have been selling quite a few “microgroup” plans, partly because group insurance is the only way to get a PPO plan in Colorado for 2017. Generally, the carriers require at least two participants, one of whom has no ownership stake. (Some carriers apply other rules, including whether 1099 employees are eligible and count.) Apparently, the working population is overall considerably healthier than the non-working population, and thus the group health insurance market hasn’t seen the turmoil that the individual market has.

On small-group insurance, Ray H. said to consider using a PEO, Professional Employer Organization—what was once called employee leasing. I’ve been such an employee before (of John Mauldin, actually, many years ago) and we had big-company-style benefits. It’s worth investigating if you are self-employed.

Another idea: Go (or go back) to school. Some community colleges have student group health plans open to part-time students of any age. The rates are low because the group is mostly young—but you have to be a legitimate, enrolled student and pay tuition. That might outweigh the lower premiums.

Healthcare Cost-Sharing

From Richard J.:

Many thanks, Patrick for your letter this morning; it’s right on. And thank you for finally mentioning the religious healthcare alternative, which is getting little to no mention at all. I am relatively healthy and have been with an alternative care for 2 years now.

The savings are huge, bigger than all my investing profits during the same time, and if you’re healthy and following the suggestions in your letter, it is smart, it feels good to help others, and it’s good to know some program that really works is behind you. Keep on doing the good work.

Richard refers to the handful of religious cost-sharing cooperatives that received a special exemption in the Affordable Care Act. Participating in one satisfies the Obamacare individual mandate even though they are not “insurance” per se.

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