I also live in NJ and am paying 12,000 a year for a family HMO policy.

Don't underestimate the discount that the insurance company has
negotiated. Based on bill that my mother received for care in a
northern NJ hospital, her room charge was $5,000 a day with another
$5,000 a day for drugs, IV etc. With insurance the rate drop to
approximately 1,000 /day before the insurance paid. This was not for
major surgery but an infection. A week stay would run $70,000 if you
don't have insurance. With insurance, you would face a bill closer to
7-15K before submitting to insurance.

Yes insurance is a rip off until you need it. But if you have to pay a
non-negotiated rack rate in New Jersey it can easily bankrupt you. You
have a lot to lose and are approaching the age where the first major
hiccup can occur. Insurance in New Jersey sucks but life without it can
suck even more.

I also looked at the policies with limit coverage. I have had too many
friends in the 40-50 range that had a battle with cancer to buy a plan
with no chemo coverage.

Just my 2 cents worth.

Elle wrote:

- quote -

I use the words, "price controls," because none of my friends negotiated
anything with any insurance company. Rather the insurance company hands
them a price sheet and tells them to comply. Of course, they do not
have to accept the insurance, but most (all?) health insurance companies
operate this way. And they literally told me that they make up the
profits on uninsured patients. Of course, my sample size is small.

- quote -

This was my point. Judging from the bills I get, I'd say your 30%
number is low.

- quote -

This is not universally true. For example, my insurance does not pay
for many new procedures even though their efficacy has been proven. It
doesn't pay for quasi-medical services like chiropractic care either.

The message for the OP is that the insurance companies may be ripping
you off, but insurance may keep you from getting ripped off by the
medical services industry. You've got to pick your poison.

-Will

Once again we remind all that this is a financial planning forum.
Posts should have a tie-in to financial planning, or posted to a more
appropriate newsgroup.

Thank you.

-HW "Skip" Weldon
Columbia, SC

I have a lot of Canadian friends who disagree with you.<g> For example,
last fall a friend's wife needed back surgery for a problem that was
not life threatening but caused constant severe pain. Waiting time is
18 months for a slot in an operating room. I have been in that
situation and I would not have wanted to wait 18 months for the
surgery. Take my word for it, neither would you.

Our system, or more properly our lack of any system, is abominable but
be careful about jumping on the single payer system bandwagon without
doing a lot of research. Healthcare will always be rationed because
resources will always be finite and demand approaches the infinite. The
only thing you get to choose when designing a health care system is how
much you are willing to spend in the aggregate and what criteria you
will use to ration the services that amount of money will provide.

This is way off topic so enough said.

--
_Bill_

Future posts should have a tie-in to the financial planning aspects of
health insurance.

Thank you.



-HW "Skip" Weldon
Columbia, SC

"Bill" <no[at]no.com> wrote
snip for brevity
- quote -

Well, you could be at least partly right, but I'm doubtful. After all, for
all this high-priced medicine we have in the U.S. we still have a lower life
expectancy and higher infant mortality rate than other countries with
national health care systems and spending a lot less per capita on medicine
than in the U.S.

For example, reports of needless MRIs (and similar high tech imaging
procedures) have been abounding in the last few years. Doctors report that
overkill prescription of such services is a part of their bread and butter
and/or necessary since juries in malpractice cases can't understand why more
is not always better but is in fact in some cases worse (health-wise) for
the patient.

I suggest people vote as they are able for a nationalized system. It is a
superior method of health care delivery and will help preserve their and
their grandchildren's financial futures.

With this I respectfully withdraw, as I realize the discussion is becoming a
tad too political.


======================================= MODERATOR'S COMMENT:
Posters are requested to remember that this is a financial planning newsgroup.

Just a side note. Go back 50 years and see:

1) How many people were being kept alive by having dialysis three times
a week for years.

2) How many pieces of equipment you could find in a hospital that cost
1/2 of the cost of an MRI in inflation adjusted dollars. (Hint: there
were none.)

The point being that another significant part of the cost of medicine
today is the technology of today.

--
_Bill_

"Elle" <elle_navorski[at]nospam.earthlink.net> wrote in message
news:G3aie.1680$X92.1166[at]newsread2.news.pas.earthlink.net...
- quote -

I think there could be some truth here. I think doctor's write out an
expensive prescription, for instance, just because the patient has
insurance. (Think statins.) Often something cheaper, like exercise and a
healthy diet, will achieve the same goals. If not lifestyle, consumers
without health insurance might not run to the doctor when home remedies will
work. I think our society has decided to impact the health care community
unnecessarily. This has driven up health care costs and insurance costs. We
could be better served financially by watching out for our health and
reserving health insurance for catastrophic needs.

Elizabeth Richardson

"Michael Sullivan" <mes[at]panix.com> wrote
- quote -

The key word being "looks."

The current popular (and woefully misguided) mindset is to believe that
insurance of any kind is about getting one's money back. On the contrary,
the return on investing in insurance is _peace of mind_. That's worth a lot.

I know you probably agree with this Tad. Just clarifying.

On the other hand, let's nudge people to do something that will improve
their financial situation: There is in fact little doubt that improvements
in health care delivery could reduce personal insurance costs a lot. More
below.

- quote -

It's largely (1) the high costs of the bureaucracy of the current "system"
of health care in the U.S. and (2) the insulation of the consumer from the
provider from costs (that is, elimination of natural market action) that has
driven up health care costs. Thus the explosion in health care costs cannot
be remedied by a trifling $50 levy against the uninsured.

- quote -

I hope what you mean is those who have money foot the bill for those who do
not have money. Those who "have money" happen to include people with
insurance and without it.

Numerous reports indicate that people without health insurance pay a higher
fee for the same medical service than the insurance company pays on behalf
of its clients. The justification for this practice is (1) insurance
companies negotiate discounts based on bulk (that is, having a lot of
clients) with hospitals, etc.; and (2) those without health insurance tend
not to pay their bills and so require bill collection services.

- quote -

More efficient to the tune of about 30% ( = the administrative costs of
dealing with so many insurance companies), by many a report.

"Will Trice" <wwtrice[at]paragondynamics.com> wrote
- quote -

They're not price controls. The insurance companies and medical service
facilities _negotiate_ reduced fees based on (1) bulk discounts; and (2) the
fact that the facilities don't have to deal with collecting bills from the
uninsured. (Instead they get to deal with and pay for the bureaucracy of
the insurance company.)

- quote -

Just the opposite could be true, too. With some 45 million people uninsured
in the U.S. and charged a rate typically 30% higher for the same medical
service as those with insurance, the uninsured are just as likely to be
carrying the insured.

Tack on that the insured are urged--even ordered--to take every possible
medical service under the sun, whether its efficacy is proven or not, and in
fact it's very clear that it's the insured's recklessness that is
responsible for the explosion in health care costs.

Tad Borek wrote:

- quote -

Ok, you and Michael seem to agree on this point. While this seems
intuitively obvious, it may not be true. The paying customers of health
care are not all insured, i.e. some customers pay out of pocket. I have
many friends that are doctors, and they stick these out-of-pocket
customers hard to make up for the money they "lose" on insured patients
due to price controls imposed by the insurance companies. However,
given that a sufficiently large part of the paying population is
insured, then your point would be more-or-less true. I haven't seen
statistics on this, but I would guess that your point would hold in
light of the statistics.

-Will

Tad Borek <borekfm[at]pacbell.net> writes:

- quote -

At the risk of getting dangerously political for this group, I'd point
out that the most often cited source of those stats are the same
Harvard researchers who, while attempting to derail the ultimate
repeal of rent control in MA in 1996, put out stats claiming such
abolition would cause all sorts of deaths. Their claims weren't close
to borne out in reality.

So I would be suspicious of drawing any conclusions based on
claims they have made re: bankruptcy and medical expenses.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

Will Trice wrote:
- quote -

Will,
I was thinking along the lines of what Michael wrote. I've seen
bankruptcy stats suggesting that medical expenses are one of the primary
causes of bankruptcy - numbers ranging from about 30% to 50% of
bankrutpcies having a medical-expense trigger.

Implicitly those costs are borne by the health care system, when the
debts are written off. Which is to say they're borne by the paying
customers of the health care system, i.e., the insured.

I also assume, which may be incorrect, that $50 a month or some similar
amount paid towards high-deductible coverage would generate net revenue
from the currently-uninsured. My thinking is a policy that operates as
true "insurance", not covering a doctor visit for a cold, but covering
the necessary medical expenses a certain percentage of people are going
to ring up someday.

My net-revenue assumption seems possible given the enormous pool of
uninsured - especially in some areas where you wonder how the bills are
paid at all. EG the worst state has 30.7% uninsured (Bush's home state
of Texas) according to a study I heard cited two weeks ago by the Robert
Woods Johnson Fdn. Overall in the US the rate is something like 18% and
rising each year lately.

Actually this map is interesting, according to the study the
yellow-and-orange state folks who for the most part didn't vote for
Kerry (who ran on a health-care plank) are also the ones most likely to
be uninsured, thus would benefit from any health care reform:
http://www.msnbc.msn.com/id/4798889/

Most states require insurance to cover liabilities resulting from our
cars, why not for liabilities resulting from our health? How many people
would buy auto liability insurance if it wasn't required? Etc.

-Tad

Will Trice <wwtrice[at]paragondynamics.com> wrote:

- quote -

The currently insured (including self-insured) already *does* foot the
bill for the uninsured (who cannot cover their costs).

We foot the bill by paying more for emergency and hospital care (the
kind of stuff that cannot be denied to the uninsuired) than we would if
there was some kind of universal health plan. In order to account for
the cost of treating people who cannot pay, doctors and hospitals must
bill more to those patients who can pay. Every consumer, whether
insured or uninsured foots that bill.

If there were a universal health insurance plan, that would still be
true to some extent (we'd just pay it in taxes rather than in higher use
costs), but it could be more efficient (since many people who could
afford to pay *something* towards health insurance, just not existing
rates, currently go without any coverage at all. I think that was Tad's
point.


Michael

--
"Every gun that is made, every warship launched, every rocket fired,
signifies in the final sense a theft from those who hunger and are not
fed, those who are cold and are not clothed. -- Dwight Eisenhower
"In Christ there is no killing" -- St. Patrick

Tad Borek wrote:

- quote -

Tad,

I've been playing around with these ideas, too. But I don't think I
understand your point above. It sounds like you're saying that if
previously-uninsured people pay a minimum amount into an insurance
scheme, then the previously-insured people will pay less in premiums. I
don't follow your economic theory on this one since the
previously-insured population will have to foot the bill for the
previously-uninsured, increasing cost to the previously-insured.

Right?
-Will

TK Sung wrote:

- quote -

I believe that if you don't use withdrawn funds for healthcare costs,
the withdrawals are taxed as income.

-Will

"jay" <jaynews[at]verizon.net> wrote in message news:%v6ge.40$ix3.8[at]trndny07...
- quote -

your premium. i'm paying $95/mo for an hsa plan and i'm older than you.
get an hsa compatible plan and contribute max. and don't think about going
around w/o insurance because the hospital will take you to cleaner when you
get sick and don't have insurance. hsa is even better than ira since it is
not taxed on either end. btw, the premium increase is probably due to your
aging as well as healthcare cost inflation.

Cal Lester wrote:
- quote -


Cal, I was thinking about this, when you mentioned increasing the
deductible...BS of CA's HDHP has a $2400 annual deductible and I don't
think you can lower it (with their HSA-compatible plan anyway). At
least, at the time I enrolled they didn't offer that.

I wonder if the fact that the plan you quoted even offers a $1k
deductible contributes to those higher premiums (I think it'd be about
$125/mo here for the sample you quoted, at 2400 annual ded, in-network
coverage). Maybe BS-CA has cranked the numbers and found that most
people won't ring up $2400 in a year, but a lot will hit the $1k. I've
never hit the $2400 in a year, and never flushed out my MSA/HSA either.
I hope BS is saving those premium dollars for a rainy day.

I do hope someone sorts out this mess with health care costs. I keep
getting back to the idea that health insurance might need to be
mandatory. Like the OP...he can clearly afford it, but he's right, it's
a huge amount of money, and looks like a big rip off. But if all the
people who are uninsured were paying even $50/month into the risk pool
for HDHP kind of coverage the costs for people who do buy insurance
wouldn't be as high (some uninsured still will need medical care, only
can't/won't pay for it, with the costs borne by everyone else instead).
Pay for the thing with a tax credit or something, so it's zero out of
pocket even for lower-income people.

But to the OP - I think the bottom line is, it's absolutely nuts to
drive without the health insurance seat belt. Actually it's a lot like
seat belts, you probably never need their full benefit. But I just know
too many people who have drawn a bad card, totally randomly, resulting
in astronomical health care bills. Unavoidable stuff too - out of
nowhere, nothing preventive measures could have stopped. God forbid they
didn't have insurance for that. So I keep paying even though my lifetime
costs to date are probably 1/50 of what I've paid in, and hopefully will
stay that way. One case where I'm happy to keep paying and never receive
the goods.

-Tad

I was not aware of this. How high can the deductible be increased to?
Please keep in mind that I'm enrolled in a plan with a 10,000 deductible and
my premium is already $328 per month. This plan is not even HSA eligible.
The HSA eligible plans start at $700 per month. I find it hard to believe
that in NJ, my premiums for HSA eligible plans would gradually go down to
reasonable levels over time. Please explain how this happens, and how low I
can expect my premiums to get in NJ?

Thanks,

J.

<<Allow me to clarify once more. The deductible (which can be as low as
$1,000
by FEDERAL LAW) IF it has to be met, is paid FROM the HSA account. If
you do NOT have large medical expenses, that account WILL grow to MORE
than the deductible, which then permits YOU to INCREASE the deductible,
LOWER the premium and INCREASE the savings portion..........................
Cal Lester CLU>

Tad Borek wrote:
- quote -

Tad, I loved your comments (snipped), but will concentrate on the above.

It is true that the Federal Government provided that the deductible for a
Single person can be as low as $1000, but as you so aptly pointed out,
the carrie can OPT to offer only higher deductibles.
Next, YES, the lower the deductible the HIGHER the premium, and it
is just for the reason that you stated. HIGHER USAGE (higher operating cost).

It is great that you personaly have never gone above $1k in medical expenses.
This gives YOU an opportunity to "grow" the HSA account to a point in the
future when you might want to INCREASE the deductible, which then
lowers the DDHP premium AND increases the amount that you are
permitted to put into the HSA account.
Cal Lester CLU