Medical Insurance: Anyone self-insure?

Looking at self-insuring next year.  Getting tired of rates that continue to rise with less benefit.  I'm 33, good health.  Wife is 35, has ulcerative colitis (but no issues apart from a flare up occasionally, been going well for a bit too), and we would expect to have more kids.  7 kids now, 9 through 10 months.  

Currently have an HSA but I realize that I will not be able to carry that over to next year unless I keep some sort of plan through work.  Looked into buying insurance on my own and it is more expensive than through work.  Enrollment is open through work and it looks like all HSA options anyways for next year.  

For reference, we paid ~$2500 to the hospital this year "after insurance".  We could have paid basically the same and pocketed the premium.  

My ideas are either:
1: keep HSA for me through work, pay roughly $2500 in premiums, but keep the tax advantage of the HSA.

2: Completely self-insure (although I can load up the HSA on catch up into next year).  Loses the tax benefit but we'll be able to manage our money more wisely.  

Thoughts?  Opinions?  Ideas? 

(We can leave out why the health care industry and medical insurance are crap now.  We all know and that will quickly go into politics, so let's just steer clear of it)

I've thought about it. If I were single, I'd probably have done it at certain points. I'm not altogether convinced that it is a bad idea for many. 

Ultimately, you need to answer the following questions:

1. Are you OK with Bankruptcy as your financial strategy in the case of a catastrophic event? 
2. You're going to need to do a lot of legwork for known, planned care. Not necessarily for the common stuff, but a friend paid out of pocket for the birth of their child. It required probably 100 hours of work ahead of time to get everything ironed out. Are you ready to go through that if it is necessary?

Another thought here, I have a doctor that doesn't take insurance. He's $250 for an initial visit and $150 for each visit after that. I then submit a claim to insurance and it gets covered at the out of network rate. I'd recommend finding doctors that have that kind of setup. That means their name is on the outside of the building, usually. I go to this guy because he is a specialist (psychiatry) and I've finally found a good one - I don't care what it costs. 

Unless you're a multimillionaire it's not a very good idea.  You're healthy today, but tomorrow the bottom could fall out.  As an example, I used to be healthy as a horse but I now get medication that would cost me $25,000/month if I didn't have health insurance.

Do you get better benefits for the increased cost of self-insuring? Or is it just about saving a few bucks? 

It's absolutely not an option for me since my better half has an auto-immune disease, look up what one shot of Orencia costs and she takes one every week. 

That said, is it already to late for this year? I know our open enrollment period ended a few weeks ago. 

stuart in mn said:

Unless you're a multimillionaire it's not a very good idea.  You're healthy today, but tomorrow the bottom could fall out.  As an example, I used to be healthy as a horse but I now get medication that would cost me $25,000/month if I didn't have health insurance.

Yup. The next two days my dad is going in for two difference surgeries since his liver cancer is back. The first procedure is about $40k, the 2nd one is about $100k. Assuming he wasn't on Medicare. 

We had 5 kids and survived mostly without insurance. But we were VERY fortunate.  My wife never worked. Never had a broken bone. Never had a major medical issue. We had births, vaccinations, checkups, and occasional colds. I'm not sure I'd do it again. 
 

You have 9 kids (apparently maybe 10 soon).  That's twice the risk. 
 

Kind of like owning 10 race cars running all at once, with drivers who you don't have control over. 
 

Stuff CAN happen. Are you ok with that?  

I went without insurance from 95 till 2001. But as a healthy single no kids dude, it worked out. Wouldn't call it self insured, though. I was then able to get high deductible ins. reasonable. Over several years, went up a bit each year. When working people had to start paying for other people's , my cost went up 938%. That is not an exaggeration. My finances have never recovered. 

Should delete this, since I don't have any advice, but I'll leave it for now. 

In reply to SV reX :

Actually, if he has that many kids, he may be better off uninsured. Take a look into your nearest hospital's charity thresholds. They're usually around 200% of the poverty level, which is likely pretty big with a household of 9-11. 

I personally wouldn't, mostly because I don't make enough money.  If I break an arm, get the flu, or need some blood tests, I'm sure I can cover that bill, but I think about Mom's cancer.  I'm quite certain that her three cancers spanning the last 30 years would have cost WAY more than their relatively ample purses could have held.  Just one of the pills she takes retails for $16k for a one-month course.  Multiply that by the 5 years she's been on it and you're at almost $1M.  Her only option would have been to just let the cancer win and she would have died years ago.

Dad's knee replacement would have been $40k

My steroid injection last year would have been $1800, but with insurance it was $65

Carpal tunnel correction surgery that my sister just had would have been about $5000.

I'm not going to kid myself... I know that insurance companies are in the business of profiting and I know that they succeed very well at that, but I don't ever want to be faced with the choice of letting myself die or live in crippling pain the rest of my life because I had to make a financial decision.  I don't want to be in an emergency room after a drunk driver put a fender through my kidney and say "which is worse - letting it fester and I die, or living the rest of my life in financial ruin in a cardboard box?"

I promise this isn't political, but healthcare costs in the U.S. are insane.  Our average expenses on medical care (not even including what we pay on insurance) are nearly double the next closest country, and more than double the global average.  Add in the average cost for insurance (about $8500/yr) and we're more than triple the next closest country in healthcare costs.  We're ranked 37th in healthcare by the WHO.  I would think for the money we pay, we'd be better than 47th in life expectancy.  Even if I self-paid for insurance, that's an average of $700.  7 clams a month so that I can see a doctor for $15 when I have a tummy ache is better (for me) than choosing to NOT pay $150 for a visit for a tummy ache only to find out a year later that it was a baseball-sized malignant tumor in my intestine which will now cost me $750k.

Again, I'll reiterate.... this is my personal opinion for myself.  I'm only offering how my mind sees it and how I've chosen.  For me, it's not about how my healthy life has been in the past, it's for that possibility of getting run over by a dump truck tomorrow, my car falling off the lift on my legs, or other things you can't predict.  I'm quite certain that I could have afforded and maybe even broke even on my healthcare costs up to this point in my life if I didn't have insurance, but it's the stuff you can't predict that will put you in trouble.

Let me put it this way.... if I'm laying on my deathbed at 104 after never having a major injury or illness in my whole life, I won't be adding up my insurance costs for the last century to see if I broke even.

In reply to Curtis73 (Forum Supporter) :

I concur. 
I do think the outrageous costs would have been a better thing to address, instead of outrageously increasing everyone's insurance costs. 
Since I can't afford to pay $2800 a month for insurance that pays for very little ($6000 deductible, and worse costs) I am now on the "on the dole" insurance... that costs me more, (for less) than it cost me before it started "helping" people. 
At this point, I'm still not helping the op, so I better bow out. 
I apologize to the op. 

In reply to SV reX :

He has 7 kids ranging in age from 10 months old to 9 years old. Not that it really matters vs 10 kids.
 

Self insuring is a good idea until someone gets really sick, then it's the dumbest thing you ever decided to do. Procedures get real expensive, real quick. 

I'm not going to tell you which way to go. Just want to tell you my experience for you to think about.

I was 29 and thought I was reasonably healthy when I was diagnosed with cancer. The bill they sent to insurance for the surgery and subsequent radiation treatments was over $200k. I paid the deductible and maybe an office copay. That was for one of the easier cancers to treat and a month or two of radiation.  A more serious or harder to get to cancer and chemotherapy would have been more. Prices have gone up substantially since then.

We currently have two boys under 4 and have had to go to the hospital 4 different times already. Bills to insurance for those have been in the low to mid 5 figures for each visit.

I hate paying insurance premiums too, but without them I would be bankrupt, homeless, or dead.

Let's be real, unless you have well into the 6-digits, ideally into the 7-digits of extra cash lying around, it wouldn't be "self-insurance" so much as "taking your chances with the most expensive health care system to ever exist." And with a family as big as yours that's a lot of opportunities to roll snake eyes.

My wife fell and broke her arm several years ago. It required a plate in her arm. That blew a big hole in $35,000. More recently, I sat through chemo in early March. Out patient, 3 hours per day at the cancer center,for five days....$29,000.  Earlier, I was on an oral medication that was eight pills per day, and cost $50 a pill. That worked out to $12,000/month.  I don't like insurance costs either, but the alternative is far worse. Don't risk it, especially with the size of family you have.

One other thing to consider:  When you have insurance the company pays negotiated rates.  When you're uninsured the provider charges whatever they damn well please.  For example, I had a standard set of bloodwork done and I was billed about $2,400 as the hospital lab didn't think I had insurance.  When they re-filed with my insurance company the bill was about $250 total and I paid some co=payment portion of that.  Big difference.

A friend of mine was self insuring (past cancer, couldn't get coverage, pre Obamacare), and he was having problems with a past cancer surgery.  He negotiated with the doc for payment, but the hospital canceled his appointment because he didn't have insurance.  He went in days later and they couldn't turn him away from the emergency since he was in such bad shape.  Spent something like 14 hours in surgery, then over a week in intensive care.  Won't ever pay the tab on that.

I hate the medical system in this country, and have generally come to despise the concept of for-profit healthcare.  We pay far more for much less than any other first world country.

Guess it really comes down to this

As jwagner pointed out, negotiated rates can potentially be a big deal  or rather a pretty big discount. The differences pre vs post-insurance on some of the billed amounts that I saw after my motorcycle accident last year were pretty staggering.

A couple of thoughts - if you are eligible for an HSA, that means you're in a high deductible plan. Can't have one without the other. If you're currently paying $2500 in premiums for the insurance (ie, not into the HSA), then your employer is subsidizing the health insurance quite heavily. That would potentially explain why you can't find insurance on your own for less.

One potential option might be to see if you can get a faith-based policy as those tend to be noticeably cheaper, but that's got additional risks (depending on the size of the pool of insured, a bad accident or illness can wipe out the pool and then you're not getting anything out when you need it).

The problem with the health system is that the financial downside risk in the US is absolutely enormous, partially because the system is so stacked against uninsured/self-insured, so my personal take is that I'd bite the bullet and pay the insurance premiums as long as I can halfway afford it.

03Panther said:

In reply to mtn :

Of course if we were all on welfare, we could all get everything free. No one would even need insurance. 

I'm not quite sure I understand what this is adding to the conversation here and frankly would call it a flounder. "Medical Insurance" is a misnomer at best and an incredibly bad use of the product at worst. You get insurance hoping that you never have to use it. For instance, I have never had to use my renters or home insurance; my parents have had to use their's once. I've used my car insurance twice in 18 years of driving. But I get medical care at least twice a year and lately it has been monthly. Between my wife and daughter and I, we've used it over 30 times this year. Medical care is simply not a good use case for insurance, at least the way that this country has implemented it, where you are at the mercy of the insurance company to deem something that is recommended by your doctor as "not medically necessary", leaving you with the decision to pay for it out of pocket or to forgo it and potentially die or exacerbate the issue. If you want to continue this conversation offline, I'd love to talk to you about how after my daughter's death I had to have this argument with an insurance company on what was medically necessary for my daughter. 

You delete that flounderous and unhelpful post and I'll delete the above paragraph. 

The 5 minute case that going uninsured may be the best option from a financial perspective for OP depending on his household income level, with the disclaimers that I'm not a financial aid officer, not a lawyer, not a doctor, and did not stay in a Holiday Inn last night: 

Using the hospital in Roanoke, VA, Carilion Clinic's Financial Assistance Policy - which seems to be the nearest major medical center to OP in his state, which often matters - it looks like there is a good chance with a household of 9 that he would qualify for financial assistance. 

Generally, you will be eligible for some form of assistance if your family income is at or below 500% of federal poverty guidelines (FPG). 

• Family households with income up to 300% of federal poverty limits and that have less than $25,000 in available assets are eligible for free emergency and/or medically necessary care at our hospitals. 
• Family households with income between 301% - 500% of federal poverty limits and that have less than $100,000 in available assets are eligible for significant discounts on standard charges on emergency and/or medically necessary care at our hospitals and on Carilion-employed physician charges; discounts effective Oct. 1, 2022 are 74% for hospital charges and 42% for physician charges. 
• IRS-recognized retirement accounts’ value as part of a household’s total assets will not be included when we are determining whether a patient is eligible for financial assistance.

Here are the income levels to meet the 300% and 500% poverty thresholds: 

These are the discounted rates that would be applied if he were uninsured and qualified for their financial assistance: 

If OP qualifies, this is a seriously viable option to consider. The big risk is if someone develops cancer or similar and needs a patented drug that may be deemed not medically necessary. So is he OK with taking the risk of bankruptcy and/or selling the farm if that happens? It would likely only be necessary for a year, at max, before they could enroll in insurance for the next year. 

If you've chosen to have 7 kids already and are considering having more, there is no way I would self-insure.

Every health insurance option I've ever looked at doesn't increase premium cost once you get past the "spouse + kids" level.  So insuring 10 kids usually doesn't cost any more than insuring 2 kids.  At least not for the variety of work-sponsored health plans we've had through the years.

Is the question regarding SELF-INSURANCE, or SELF-PAYING?

I don't think individuals can self-insure. I worked for a large non-profit at one point that self-insured, but that's my only exposure to it. Basically, they put a huge amount of money aside and acted like an insurance company when any of their employees needed medical treatment. 
 

Like I said earlier... I have self-paid for a long time, but I don't think I'd do it now. We may all have different opinions of the health care system in the US, but the one thing I think we can all agree on is that it is phenomenally expensive (and that won't change if you self-insure or self-pay). 
 

You really do have to be comfortable with the possibility that you may be declaring bankruptcy if there is ever a big problem. 

Totally agree that you are playing russian roulette with not having insurance. Each additional family member is another round in the chamber. 

Hell, both of my kids have had rounds of ear tubes due to recurrent ear infections. between 2 kids, 3 rounds. Now, I have never been without insurance, but google tells me that it is about $2,000-$3,000 per...   So, there's $6k.  Talking with my peditrician, the ear tube rates are up around 50% of kids needing them...  and thats just one example.   

One of the kids needs an appendix removed?  $8-9k

And that is just one example.  Eventually, people get sick or injured, thats the human condition.  

Granted you are looking into assistance programs to shore it up, maybe the way I was raised was privileged or however you want to term it, but I have a hard time looking at those as my primary option. You do you, but its not something I would consider. I would lose a ton of sleep over it.

(if this thread keeps from getting political I will be shocked, I will say that I think 90+% of us would agree the current system is broken, we just disagree on how to fix it)

jwagner (Forum Supporter) said:

One other thing to consider:  When you have insurance the company pays negotiated rates.  When you're uninsured the provider charges whatever they damn well please.  For example, I had a standard set of bloodwork done and I was billed about $2,400 as the hospital lab didn't think I had insurance.  When they re-filed with my insurance company the bill was about $250 total and I paid some co=payment portion of that.  Big difference.

This, IMO, would be the single most compelling reason to have health insurance.  People without insurance have no negotiating power and will get reamed out by the providers.

As a possible alternative to traditional health insurance, you could consider Medi-Share, or similar.

https://www.medishare.com/

https://chministries.org/

Not an endorsement, and I have no firsthand experience, but they have been around a while and do have their share of enthusiastic supporters.

https://en.wikipedia.org/wiki/Health_care_sharing_ministry

Apexcarver said:

(if this thread keeps from getting political I will be shocked, I will say that I think 90+% of us would agree the current system is broken, we just disagree on how to fix it)

Very well said!

Agree with you're advice to the op, as well.