Ask YC: Health Insurance?

[donw]

I've finally graduated (again), and I'm working on finally getting all the bits of relevant paperwork and such together for my own company. My student health insurance will expire in a few months, and so I was wondering what other entrepreneurs, preferably those located in California, do for health coverage?

[jdg]

You're young. Health insurance is going to be relatively cheap.

I just signed up for a plan for my wife and I (26/25 respectively), and it's going to cost us around $250/mo with a reasonable deductible, office copay's and prescription coverage. Dental is an extra $50/mo.

The trick(?) for me was to contact the largest insurance company here in my home state (not California) and ask to speak to their small business department. We built a custom plan rather than using one of their "off-the-shelf" plans that most people would pick. This let me play with the numbers based on our medical history and what we felt we could cover as far as our deductible goes.

Really though, call a few of the largest companies and just start walking through the process.

One tip -- do it before your current insurance expires. At least here, if you are currently covered then there is no way they can decline you(?). The monthly cost may be unreasonable, but they have to at least offer you coverage.

[silencio]

It's a good idea to start looking into it now before current insurance expires, but I'm not so sure about the existing coverage mattering much. If there are no preexisting conditions, great, but if you do have at least one, I'm pretty sure they can decline you even with existing insurance coverage except in certain circumstances (e.g. cobra).

http://www.mrmib.ca.gov/MRMIB/MRMIP.shtml is worth looking into if you find yourself unable to get health insurance as a result.

[jonknee]

A high-deductible plan with an HSA is the way to go. You can put up to your deductible into the HSA annually with pre-tax dollars, so after a year or two you have money in the bank in case anything happens (and depending on your cash-flow can either continue to pay into). It's a great deal.

[gexla]

This is what I have done as well. Health Insurance is really just financial disaster (health care originated) insurance. The deductibles are high but they will be more affordable than the alternative. To make things easier on yourself in case you do get a problem, make sure you actually contribute to the account. Between the plan and contributions to the account you might be paying as much as people with a more traditional account but at least that money (minus the premium) is going into your own nest egg.

[paul_houle]

Maybe it's the state I'm in, but whenever I've looked into high deductible plans it doesn't seem that they save much money.

Most of health insurance premiums go to pay for very expensive treatments, usually at the end of life. Routine medical bills don't add up to much: but bills can add up to $250k pretty quick if you get cancer.

[larrykubin]

I have an HSA as well. It seems like a great choice to me. Why?

I'm in my 20's and haven't had any major health problems, but don't want some random disaster to wipe out my consulting business. I also pay really high taxes on my profits, like to save money, and enjoy buying stocks.

With an HSA, I can put away ~$2,700 a year for health expenses, and that money isn't taxed. I pay Aetna $62 a month, which is $744 a year. How much would I have been taxed on the $2,700 I put away? Probably $700-800 dollars. So it has the benefits of a traditional IRA. While the money is in my HSA, I can make some conservative investments such as buying an ETF that tracks the S&P 500 or if I want more growth, maybe invest in the BRIC's (Brazil/Russia/India/China) or some tech stocks. That money can grow tax free and is reserved in case of emergency.

What if I live a perfectly healthy life and nothing happens? Well, I can withdraw all of that money tax-free when I'm 59.5 (yes that's a long way off). So it has the benefits of a Roth IRA as well.

If you don't have many health problems and have a few thousand in earnings that you can put away each year, I think it's a great deal.

[tlrobinson]

Tonik by Blue Cross (now called Anthem in CA) has low monthly premiums (as low as $77/month) but pretty high deductibles ($1,500-$5000)

https://www.tonikhealth.com/

[silencio]

i have insurance through anthem blue cross, but they've made me so unhappy in so many ways that sometimes I have to actually consider if it's worth it to not have insurance at all. they disgust me so much.

...until something (medically) bad happens, and then I realize getting ripped off by them is not nearly as bad as not having insurance at all.

if you ever decide to go talk to an agent/broker, sometimes they can help you find plans that are right for you, but sometimes mistakes happen, so double check everything. my mom's agent screwed up and she actually went without insurance for something like half a year..i can't imagine what would have happened if anything bad occurred..we didn't catch it until she went for a regular checkup and there was a question about the insurance.

[PI]

Although this won't help you (unless you're considering moving to the UK ;)) but I'm glad that we've got the NHS (National Health Service) just looking at some of these costs, $300 a month for health insurance! it makes my head spin.

For me if the UK didn't have free health care then I would be probably be paying a lot for all the health care (for a fact I know some medicines I take cost the NHS thousands of pounds a month to buy).

Not to put a downer on things. Good luck setting up your own business.

[jsmcgd]

I'm from the UK and although free health care sounds good, you really do get what you pay for.

[snewe]

Your health insurance isn't free: the UK has a much higher marginal tax rate.

[xirium]

See http://news.ycombinator.com/item?id=181697 for a recent discussion on healthcare costs.

[nfriedly]

<shameless promotion> If you want someone decent to talk to, my current employer also owns an insurance agency that only does self employed/individual insurance. Here's a list of the agents they have that are licensed in CA (only 6 at the moment)

http://www.usabghome.com/states.php?state=ca

</shameless promotion>

[mattmaroon]

Marry a teacher. Turns out they get that stuff for free.

[ews]

Think about marrying an european as well

[wavesplash]

While you're still young and solo Kaiser Perminante has some cheap plans to check out. Some folks hate Kaiser, but if anything serious goes wrong, Kaiser has one of the best operation records of any HMO. When you guys have some cash consider a PEO like Gevity or TriNet. They can get you bigco benefit plans for your startup at reasonable cost.

[bigtoga]

You have a decision to make: can you self-insure for the minor costs or not? By "self-insure", I mean can you handle up to $2500 or $5000 per year of health costs if you had to? You can get $500 deductible insurance plan for $400-$600 or $5000 deductible plan for $180-$250.

Look for an HSA or ask someone for help on those.