Health insurance is expensive and getting more so every year. It should hardly come as a surprise that increasing numbers of people are simply going without coverage of any kind. They simply cannot afford health insurance. According to some statistics, the number of people in the US who don’t have health insurance hovers around 50 million, which works out to approximately one out of every six people.
Since the wealthy can easily afford health insurance, and those officially designated as poor can usually qualify for some form of government assisted care, we can assume that the vast majority of those 50 million souls sit somewhere in the middle class.
One way you CAN afford health insurance
Part-time jobs with health insurance
In the best of all worlds your health insurance comes from a group plan with an employer. This has the advantages of (usually) being at least partially paid by your employer and, since it’s group coverage, you can’t be refused entry due to pre-existing conditions.
This kind of coverage typically comes from a full-time job, but what if you’re self-employed, or you don’t have a full-time job, or if your job doesn’t offer health insurance?
You still might be able to work a similar arrangement with a part-time job!
If you’re interested in getting health insurance through a part-time job, I’ve written a post to get you started, 20 Part-time Jobs With Health Insurance. The list includes mostly nation-wide employers (or employer sources) and it provides companies that may be of interest to you. If not, you can fan out from there. There are probably dozens more employers who provide health insurance to their part-timers, and though you’ll have to do some research, it is most definitely one way that you can afford health insurance.
Catastrophic can be the best way anyone can afford health insurance
Private insurance is expensive, not the least of which since there’s no employer subsidy—you’re on the hook for the entire premium. For this reason it’s not unusual for individuals to pay monthly premiums in an amount comparable to a large car payment, or for families to pay one that’s the size of a modest house payment.
The solution, if you have to use private insurance, is to use a high deductible plan—also known as catastrophic health insurance. There are no hard and fast rules as to how high a deductible has to be in order to categorize the plan as catastrophic, but suffice it to say that it’s usually a figure just above your comfort zone.
People often shy away from catastrophic coverage because it doesn’t cover the type of medical costs that are typically included under employer group plans. They conclude that because it didn’t pay for their $150 doctor visit or their $2,000 medical test, its lousy insurance and not worth having.
But there are two reasons for having catastrophic coverage and the combination of the two is strong enough to merit consideration. The first is price. A health insurance plan with a $5,000 (or higher) deductible can cost hundreds per month less than one with a $1,000 deductible. It’s often a matter of raising the deductible to the point of affordability. You’re far better off having this kind of coverage then none at all!
The other reason is coverage for true medical disasters. While it’s true that catastrophic isn’t much help with routine medical costs, it will cover you for the gigantic healthcare events that are becoming more common. If your catastrophic plan covers only one six-figure medical disaster in your life, it will have done its job. It may even save your life if the alternative is to go without health insurance all together!
Never dismiss catastrophic coverage out of hand. It’s one of the best ways for most people to afford health insurance.
Create an income stream dedicated to cover health insurance
The reason most people go without health insurance is cost, or better put–insufficient income to afford that cost. The solution to your health insurance problem then could be to increase your income.
You can do this by creating a dedicated income stream that will specifically cover your health insurance. If you don’t want to work a part-time job, you can do this through some kind of self-employment or freelance work. Three that I personally recommend are:
Blogging
Freelance blog writing
Professional speaking
I’m doing the first two, and one of my best friends is doing the third. It’s fairly easy to earn the extra $500 to $1,000 per month you need to cover your health insurance premium (less if you use catastrophic), and though it will take a few months to reach that income level, it is very doable. You can do these from home, at your own pace and even grow them beyond paying just for health insurance.
But if you begin any of these—or any other income venture—be sure to dedicate it specifically to pay for your health insurance premiums. If you don’t, you’ll just fold the income into your regular budget, paying for everything else, and you’ll still be without coverage.
Are you going without health insurance? Do you think any of the above can help you afford it? What else have you tried to get affordable health insurance coverage?
I’m not sure if this varies by state, but these High Deductible/Catastrophic policies are usually required by some state/federal mandate or other to include so much other stuff that it costs the same as OR MORE than a barely adequate HMO plan. I’m in NY and rates for all kinds of health insurance are double what they are in many states…I know because I just moved back from Colorado where the policy I was paying $425/month for as a New Yorker was $215/month in Colorado.
I got sick and tired of thinking I was covered for things that I wasn’t, and getting jerked around with their admin loopholes – so after 8 years of paying premiums for an individual/private plan with BCBS, I’m done. I paid over $30K in premiums and used $6K in services (plus my own $2K in co-insurances and co-pays). So now I’m putting $250/month into a savings account that is earmarked for medical expenses only. My back-up plan for a catastrophic illness is that I’m a naturalized British citizen…I can always take my diagnosis on a plane and go back for a while, and my $70K/yr “sideline” is totally portable/flexible. I’ve been considering something like Aflac for things I can’t control – heart attack/stroke/accident. I just don’t like insurance companies that obviously spend an obscene amount on advertising.
Hi Kate–I’m with you on that New York thing. For any business I’ve ever worked in that had dealings in NY, NY was always a special case. You can’t do this…you must do that…and costs are always higher. It amazes me that there isn’t a mass exodus, I mean one greater than the slow bleed they’ve been experiencing for decades. Everything is more expensive there.
As to catastrophic, it doesn’t cover most routine procedures, but that’s not it’s purpose. It’s only for the really big medical events. If you’re looking for it to pay anything less you will be disappointed–as you’ve already experienced.
You’re in an excellent position with your UK coverage. A lot of people are beginning to go overseas for surgeries that cost less than what you’d pay for deductibles and co-insurance provisions here in the US.
What’s puzzling me is that the US spends twice as much money per person for healthcare as other developed countries including Britain and Switzerland. How do we justify that and call it a good system???
We have a High Deductible Health Plan and think it is great! We get to determine how much money we want to set aside for health expenses in our HSA and the premiums are low.
Hi Deacon–The HSA combination with a catastrophic plan is a great way to go. I didn’t to into it here because it’s really an entire post of it’s own, but high deductible plans work best with some sort of plan for front end expenses, like an HSA or an emergency fund specifically to cover the deductible. If you manage that, catastrophic plans can work well.
Catastrophic health insurance is (IMHO) the way to go. The purpose of any “insurance” is to have a lot of folks “pool” some money to help each other IF someone has a large, unexpected, financial loss of some kind (like your house burning down or a tree falling on your car). Health insurance, sadly, has become a “combo” product: insurance + healthcare financing. Think about your car insurance company … do they pay for oil changes, new tires, or that brake job? If they did, do you think your premiums would cost more? Someone complaining about paying $150 for a doctor visit is, really, not any different that complaining because you had to pay to buy a new battery for your car. And while I sympathize with MoneyMateKate for paying 30k in premiums while “netting” only 6k in benefits, that’s a bit like saying I’m gonna’ run my car into a tree so my auto insurance will pay something.
Don’t be mad at your health insurance company; direct your ire at your elected reps who pass the laws requiring the insurance company to pay for things like mental health “screening,” hair transplants, and even breast implant removal (all mandated in various states). Example: PPACA (aka “ObamaCare”) now requires ALL health plans to pay for much “preventive care” at 100% (again, that’s not insurance; it’s healthcare financing). Everyone loves this, of course, but it’s not “free:” the MD performing the exam will get paid, the lab running the tests will get paid, the x-ray tech will get paid. Where’s the money come from – the insurance company! And where will they get the money? Right – your premium will go up to pay for all this “free preventive care.” When your cost goes up, who are you gonna’ be mad at? The insurance company for “gouging” you again, or the government who passed the laws requiring them to pay for it?
It’s our healthCARE system that’s the mess; the insurance is just the symptom that people “see.”
Welcome back Art–your opinions are always welcome on this site! (Art has written both comments and posts on OutOfYourRut before). I agree with you on catastrophic coverage. What passes for health insurance today are really insurance benefit packages, and people mistakenly judge plans by how much preventative care they pay for. We waste a lot of money for such policies, especially if you’re in good health and don’t use much healthcare. The true test of a health insurance plan is what it pays during a medical disaster, like major surgery. That’s when we really need insurance–and not to sheild us from paying for doctor visits, tests and prescriptions.
Kevin, your right on it. Fortunately my family stays pretty healthy and in the long run it’s just cheaper for me to pay cash when ever one of us needs gets sick. I know my sons pediatrician gives us a decent discount for being cash payers. My work only covers myself for health insurance, i believe it’s an additional 160 per month to add my family and my deductible is like $1500. We have never spent $1500 in medical bills a year! It’s just not worth it for what it covers especially if everyone stays pretty healthy. If something catastrophic happens, i guess we just deal with that at the time?
Hi Chad–You might still want to add some kind of catastrophic, especially since you have a family. Even if you take one with a $10,000 deductible you’ll at least have coverage for something big. But even more important, you’ll have treatment options for a complicated treatment, with no insurance you’ll have to take what ever treatment is available, if it is.
The only way you can pay that low for NY insurance is if your income is low enough to get gov. assistance. Here are the rates quoted by NY state http://www.dfs.ny.gov/insurance/hmorates/html/hmooneid.htm These are rates that are low when I got a quote from BCBS. It was $3800/month for my family. Good Bye NY. When people like me leave you there is noone left to pay for these benefits.
Hi William–Wow, those are some sick fees. Everything always seems to be so exaggerated in NY, cost wise. I’d try the part-time job with health insurance, or move out of state! That’s prohibitive. NY is such an “activist” state, you’d think someone would jump all over those premiums.
These high deductibles are like having NO insurance. My family cannot afford $100 per month. We don’t qualify as low income and we have two low paying jobs. We don’t get sick. We do put away $10.00 per month for emergencies, which is a lot more than my friends.
Hey Kevin, great article you have here! My wife and I are going to be losing our insurance in a year or so because she’s quitting her job, so we’ll go with the high deductible/HSA combo. It just seems like the lowest cost route overall.
Hi John–That sounds like a good plan. Obamacare will be fully implemented by then, maybe it will help too.