Just-in-time insurance

I've been assuming for months now that the problem with waiting until you get sick to buy the new guaranteed-issue health insurance was that you can sign up only once a year, which leaves you exposed to up to a year's worth of medical expenses before your new coverage kicks in.

I'm hearing now that that's true only if you plan to go through the exchange to buy your coverage, which is necessary only if you want to try to qualify for a premium subsidy.  To my utter amazement, it appears that you really will be able to go to an insurance company at any time and buy coverage, regardless of pre-existing conditions.  The only counterargument I'm finding on any official websites is "We'd really rather you didn't do that."  There's the penalty, of course, but anyone should be able to avoid a penalty simply by not overpaying taxes and putting himself in the position of needing to apply for a tax refund.

Who wrote this thing?  Were they high?  I know it's possible to rack up a big ICU bill in a few weeks, but come on.  What's easier, saving up against that one-time danger, or paying $10K a year in premiums year in and year out?

This is like guaranteed-issue fire insurance you can buy after you dial 911 and while you're waiting for the fire trucks to arrive.  If this is right the law has got to collapse under its own weight.


Grim said...

Then may it be right.

raven said...

It will collapse- but the collapse may be concealed with OPM.(other peoples money, AKA government bailouts)

We are probably going to buy short term insurance for six months , at around $5-600 a month for the two of us, to buy time and see how it shakes out. The politicians are scurrying like roaches on a tenement floor during a midnight bathroom break. So who knows what will happen.

Elise said...

You know, for a long time I though that's how ObamaCare worked: you could buy insurance whenever you wanted so why not wait until you're sick? Then I heard about open enrollment and figured I'd been wrong - and was actually kind of relieved that the people who wrote this law were not *as* stupid as I'd feared. If this is true, my relief was premature.

If this info is correct then, combined with your earlier link on self-pay options, going without ObamaCare insurance looks pretty appealing.

Texan99 said...

It might be a good idea to look into a cheap short-term limited-benefit "critical illness" plan that would generate an immediate cash lump sum for the most likely events to throw you in the ICU: heart attack, stroke, accident. Assurant Health and Aflac sell things like that. The premiums float according to how much cash you want per event. One of them, Assurant I think, lets you choose anything from $5K to $100K per event, with premiums that for the two of us would run from $40 to $736 a month.

For those of us who've always kept a sharp eye on our "continuous coverage" status under the 1997 HIPAA law, it will be important to think through what happens if Obamacare is repealed and we go back on the perfectly reasonable protections HIPAA already was offering in terms of guaranteed reissuance and portability. (Remember that 99% of what's being spouted now about how before Obamacare anyone could be kicked off his insurance for getting sick was complete nonsense. HIPAA was a very useful reform, and it's worth a lot to understand what it takes to retain access to its protections against pre-existing condition exclusions.)

Texan99 said...

Dang. Now that I've had a chance to get on the phone with Blue Cross, it seems they're applying the strict open-enrollment period, just like the exchanges. If you get your insurance through an employee group plan, it will still be possible to start coverage on odd dates throughout the year, but individuals will be confined to a once-a-year opportunity to sign up. OK, back to strategies for surviving a single year without comprehensive qualified coverage!

I'll call another insurer or two to confirm that this is going to be the industry practice. My goodness, what are all those agents and operators going to do for the rest of the year? Will their jobs become seasonal, like Christmas retail clerks?

I read an article in a fireman's publication this morning about how the IRS is refusing to confirm that volunteer firefighters won't be treated as "employees" for the purpose of imposing fines on their departments for failing to insure them. You wouldn't think ours is big enough to qualify, but apparently the IRS is trying to lump together all emergency workers in and near small towns and include them in the count of traditional paid workers. What a CF. I'm sure the reigning view is that volunteer organizations are "dysfunctional" or "inefficient" and ought to be regulated out of existence whenever possible. Why, those volunteers almost never unionize.

Elise said...

Too bad the info isn't accurate but I guess at least I can go back to being relieved.

Texan99 said...

Here's a good site for checking the likely prices for certain common surgeries. The prices are all over the place, as are the customer-satisfaction rates. A good site to bookmark. My rough impression is that $30K is a standard price.


Texan99 said...

This is interesting: medical tourism is a quickly growing field. I know someone who had inexpensive surgery in Mexico for colon cancer. http://www.planethospital.com/

And here is some information about the average size of medical bills that land people in bankruptcy. I'd love to see the maxes and mins as well:

Among families who were bankrupted by illness, those with private insurance reported average medical bills of $17,749 compared to those who were uninsured, who faced an average of $26,971 in medical costs. Those who had health insurance but lost it in the course of their illness reported average medical bills of $22,568.

Hospital costs accounted for about half the expenses (48 percent), followed by prescription drugs (18.6 percent), doctor’s bills (15.1 percent) and insurance premiums (4.1 percent). Medical equipment and nursing home care rounded out the list.

The health problems that left patients with the highest out-of-pocket expenses were ranked as follows:

Neurologic (i.e., multiple sclerosis): $34,167
Diabetes: $26,971
Injuries: 25,096
Stroke: $23,380
Mental illnesses: $23,178
Heart disease: $21,955

That gives us some idea of the size of savings or limited-benefit plan that might be prudent as an annual stop-gap measure.

raven said...

Thanks, Texan- very useful info. Honestly, it is sort of amazing how little the amounts are that result in bankruptcy. I guess given the surveys that show a lot of us are living paycheck to paycheck, and that many could not pull together a few thousand dollars for emergencies,it is not surprising.
of course it is no doubt compounded by the reduction in the patients ability to earn , after the event.

Elise said...

of course it is no doubt compounded by the reduction in the patients ability to earn , after the event.

Yes, McArdle did some writing about this a while back. She pointed out that the loss of earnings from serious illness was a major factor in bankruptcies - and that making sure people had health insurance did not address that. Thus claims that universal health insurance (not that we're actually getting that) would reduce bankruptcies - or even bankruptcies tied to illness - should be taken with a large grain of salt.

Texan99 said...

I'm also concerned that you can't necessarily tell much about the average size of medical catastrophes from these reports--only the size of bills that are a problem for people who didn't have savings, or suffered a gap in earning, etc. One of the scary scenarios for going bare is waking up in the ICU: no time to plan, no telling what they did while you were out. Is a bill for something like that $35K? $500K?

Eric Blair said...

Well, that's why doctors and hospitals should have been told to publicly post their prices.

That, combined with declaring community rating on the country, and letting insurance companies sell across state lines, probably would have actually had a positive effect, rather that the fuster-cluck this thing has become.

Basically three administrative rules. Less than a page.

raven said...

Eric- precisely. Along with allowing folk's to buy what they want , instead of being forced into a one size plan.