No I’m not joking. I don’t have health insurance. My wife doesn’t have health insurance. My children don’t have health insurance.
I imagine a few thoughts are circling through your head reading that, and among them would be “this has to be the dumbest financial planner alive, hasn’t he heard there is a global pandemic going on?”. Fair enough, but I should mention we are still well protected through a health sharing program.
When I worked for a company I took it for granted how much they were paying towards my health insurance coverage. While I thought I was paying a good chunk in monthly premiums, it turned out to be less than one third of the total.
When I started my business in March of 2019 I was able to continue coverage through COBRA but began shopping around for a plan to replace that, and I knew it was going to be pricey but didn’t really intend to look at alternatives initially. Then I saw a quote like this.
Quick math suggested we would be paying $18,867 in annual premiums, plus potentially $6,600 in deductibles ($2,200 per person), so all in we were likely to spend $20,000+ annually before we received any benefits. A $1,000 copayment for emergency care? Give me a break! While this is the silver plan offered, the gold plan would have been another $3,000+ annually in premiums.
I know you’re all expecting some wise remark about the name “Affordable” Care Act, but I’ll spare you. Health insurance premiums have continued to grow at a similar rate (which was a high rate) after the passage of the Affordable Care Act as they were growing before it, it’s deductibles that have really skyrocketed.
So I remained on COBRA for a little bit while I was searching for a better alternative to traditional health insurance. Plus, we were expecting a newborn last May and I didn’t want to risk messing up any coverage beforehand.
I think it’s time for a disclosure. None of what I am stating here should be construed as advice or as a recommendation. What works for my family, may not work for yours and it is best to consult with an expert before implementing any changes to your health coverage.
Not too long before I left my job I remember coming across an in depth article on health sharing programs, and how they can be a viable alternative to traditional insurance. That article can be found here. The article became a reference point for me in my search for more efficient coverage.
To say I was a bit leery about “going the cheap route” on health coverage would be accurate, as my daughter’s birth last May incurred over $150,000 in insurance claims. But the more research I did, the more confident I became in one of the options.
If you really want to dive into the weeds, make sure to check out the article I referenced above. For us, we went with a health sharing plan that had unlimited coverage (which did cost a little more). We are treated as a cash payer for any medical expense incurred. Any medical incident (One medical incident could include many hospital and doctor visits, multiple surgeries, therapy etc.) incurred where the total cost is under $500, I pay out of pocket. Any medical incident that exceeds $500 before discounts is 100% covered by our health sharing program.
For regular office visits and routine bloodwork I pay cash since it’s under $500.
There are no networks, no preferred providers, you simply go where you think is best for you. No more of “yes your hospital was in network but the doctor in the hospital that treated you was out of network”.
The members are encouraged to shop around for any non-urgent medical procedures, or ask for discounts since insurance is not involved. It’s interesting to see this in action, as the medical bills I have received since joining the health sharing program are automatically reduced 50% – 70% in most cases when they realize I am a cash payer. One provider even told me they are happy to reduce the bill 60% because they only received about 40% from insurance anyway!
There are restrictions on coverage for pre-existing conditions and certain treatments, but we determined those restrictions were not applicable to our needs.
All in the cost is about $6,750 annually for our family of 4. This results in annual savings of over $14,000. We would have to incur many medical incidents under $500 to really eat away at that savings.
Being a member in the health sharing program gives you a little more sense of community. Each month we receive a magazine with members stories and other members requesting extra share amounts for pre-existing condition treatments.
The first bill I submitted took about 60-70 days to get paid, but no questions were asked from the program administrators and the medical providers seem okay with waiting. You are also able to pay the bill yourself then collect a reimbursement from your health sharing program if you don’t like bills lingering out there.
So far, we’ve been very pleased with our coverage and I actually prefer the health sharing arrangement over the traditional insurance I had with United Health Care in the past. It seemed like I was constantly on the phone with them disputing coverage amounts, appealing claims, and having them resubmit things that were improperly submitted.
Monthly share amounts are not deductible for business owners like traditional health insurance is, but even factoring that in we are still way ahead. Also, a health sharing program does not qualify as a high deductible health insurance plan, so that means no HSA contributions unfortunately.
All in all, I think we made the best choice we could have for our family and I don’t ever intend on going back to traditional health insurance unless something major changes.
If you have any follow up questions to this article please feel free to send me an email at firstname.lastname@example.org.
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