Jay,

I also live in NJ and posted before. A few comments:

1) You are healthily now. Shit happens. Hospital are expensive in NJ
(see my post to you previous post).

2) If you drop insurance in NJ, you will not be able to get coverage
for a preexisting conditions until a set time (6 months-1 year?) after
obtaining coverage. Could be a real concern. Think cancer, dialysis,
etc.

3) The reason you have a high net worth is that you are careful about
what you spend. Be careful not to go to far with saving every penny.
You could drop all liability insurance (also expensive in NJ) but you
live in a state that has the highest number of lawyers per person. Same
for homeowner insurance? But is it really worth the risk? Health
insurance can be look at the same way. After 40 there is a real risk if
needing it. With your assets, do you really want to pay 100,000 for
that one week stay? That is not a made up number, I have the bills to
back it up. Or how about 0-100K for one chemo treatment. Scary! And you
would have to pay it since you have the assets. Your house might be
safe but your bank account and salary are not.

4) You think your plan is high? Look at the family plans and then tell
me $400 is high. I am also annoyed that we are force to choose between
full coverage with all the bells and whistles and what amount to almost
no coverage. I don't consider catastrophic coverage that doesn't cover
chemo to be real catastrophic coverage. Having said that, it is a
benefit to be able to buy coverage regardless of age and heath. It is
working against us now but in 20 years we might appreciate it.

5) As I said before, living cost in NJ suck!

Just my 2 cents worth

Philip

Although becoming a part-year resident of another state (choose one
with good, cheap H-insurance options) may sound like a momentous task
just to be able to get health insurance, here are some things to
consider. First, as implied above, most policies I've studied
(including most BC-BS policies, and i've seen the detailed contracts)
allow you to be in their service area 6 months or less per year. In
fact, once you're accepted, you are allowed to move away to any part of
the US and still be covered though the national network. OK, getting
back to my first sentence, there are non-fradulent things you can do
besides physically moving to another state. Do you have relatives in
any area that has good h-insur.? You can start to spend more time
there (almost to the point of "living there"). OK, not really. But
you can put their address on the application. All that is required on
the application is an address....no proof, no "i swear I live here 6
months per year at this time", etc. etc.). Then for the first year,
when you need medical care, get it in the immediate area of that
address. Hang out there, etc. Then after a year or a few, "move
away"...change the address. I know many people who have done this with
no problem. The closer you can get to "living" at the address on the
application the better, although I admit that someone who would just
rent a mailbox somewhere and apply for h-insur. without ever GOING to
that area (except for medical care) might be a "fraud". But take this
into account: I don't think the h-insurance companies care at all
THEMSELVES. In fact, they want all the business they can get (except
for SICK people). But state regulations require them to accept people
residing at least part time in their area. This is the picture you get
when you call a few companies and ask them the residence
question...sometimes they even say things like "all you need is an
address on the application".

"Tad Borek" <borekfm[at]pacbell.net> wrote
- quote -

Tad,

You're missing the fact that people turned away for any insurance whatsoever
still end up in hospitals, presumably often unable to pay. So the hospitals
push up their fees to the insured (along with the cash-paying uninsured).

Plus, for the second time, you're ignoring what the OP said: Past medical
history is ignored in determining rates. That's why he's paying more. Real
debate requires that you take this point into account, as well as my point
above that the cost-of-living makes medical procedures in NJ more expensive
than in say, Nebraska.

- quote -


That's too vague to have any meaning. "Any" blemish?

- quote -

snip for brevity
- quote -


If healthier people increasingly drop having any health insurance, then the
insurance companies charge more to the remaining pool, but only until some
kind of equilibrium is attained. In other words, your diagnosis is as much
for the current, entire insurance/medical care system. It may be doomed, but
it will be many years before we know. (Whatever "doomed" means. Fact is the
system is always evolving, so any point in time today does not capture how
things will be in, say, five years.)

I will bow out now. You see my second request to address my points. Ignore
them if you want but they will still be there.

Elle wrote:
- quote -


Elle, the point isn't that people are any sicker in NJ, but that a
guaranteed-issue health insurance system (by nature) results in a
"sicker" risk pool (this is a classic example of "adverse selection").
Meaning, there's a higher level of claims, and thus higher premiums,
because you're admitting costly people to the risk pool, who are denied
coverage in a place like CA. I don't know if you've applied for
individual coverage in CA but just about any blemish can result in a
"sorry we have reviewed your file and cannot offer insurance at this time."

And as premiums go up it discourages healthier people from maintaining
coverage, so the risk pool gradually gets worse. The OP is right out of
an Econ textbook. "Why should I pay so much when I'm healthy." He stops
paying, the risk pool gets a little sicker, premiums rise a little more,
a few more people get kicked out, etc.

This gets back to my point about mandatory health insurance - it would
force people like the OP back into the system, counteracting the adverse
selection that results from guaranteed issue health insurance. Without
it the current system in NJ seems doomed, at least in the individual market.

-Tad

"Tad Borek" <borekfm[at]pacbell.net> wrote
- quote -

Do you have evidence that people in NJ are sicker?

Why couldn't the greater factor be simply that the cost-of-living is much
higher in that area, so everything is more expensive?

Do you know that the average cost of, say, an appendectomy in NJ is the same
as in, say, Nebraska? (I doubt they're close at all.)

It seems to me that along with cost-of-living considerations, as the
original poster pointed out, the other catch in NJ is not that insurers
"need to accept everyone"; but instead that insurers are limited in charging
based on past medical history. E.g. in NJ, Jane Doe in good health is forced
to pay for Suzanne Smith, who's been a smoker all her life and is regularly
treated for respiratory problems.

jay wrote:
- quote -

Jay,
I've done some reading and it seems like NJ is one of the few states
with a "guaranteed issue" system where insurers need to accept everyone.
The upside is everyone can get insured, the downside is that kind of
system selects for sickness, and with an on-average-sicker risk pool
your rates are a lot higher, so fewer people can afford it. I guess this
is old news to you, sounds like it's been gradually messed up more each
year since 1992 when this system was first put in place.

Which is roughly when I moved the last of my stuff out of NJ so I gotta
ask - given the long-view point of all this, do you plan to retire in
NJ? If it's so expensive, to the point of delaying your retirement, why
not get out of Dodge? Heck even a part-year residence might be appealing
during retirement, and let you tap into some cheaper health plans, and
of course better weather, fishing, etc.

Also - have you actually spoken with a good health insurance agent?
There might be something you can do with your self-employment, so you're
into the group market instead of the individual insurance market. Or
maybe you can tap into some kind of group plan through an association
membership or something like that? Depends what you do for a living,
whether you could add a (covered) employee, etc.

I don't really think there's another answer to the basic asset
protection question - for you that's the role of this health insurance
policy, covering your ass(ets) against medical costs if (when?) you get
hit with something expensive. I would add that as expensive as the
insurance seems, it's nothing compared to hospital bills. You can ring
up $25k in a 2 hour outpatient procedure that, who knows?, you might
need next week. So you fork over these premiums not as an investment,
but as true insurance against that. Given that need it seems minimizing
premiums, for an acceptable level of catastrophic-type coverage, would
be the goal.

-Tad

"Andy" <ineverevercheckthismailbox[at]yahoo.com> wrote
snip for brevity
- quote -

Andy, it seems to me you have a lot of good notions about strategizing
payment for health care and insurance. May I ask: Any thoughts about the
tradeoffs between short-term health insurance and long-term health
insurance? I have been thinking lately that if one does have some horrible
accident or develops cancer, the short-term would cover a big chunk of the
costs. Then after no more than a year, worst case one would have no
insurance. But if the high medical costs are still present after a year, it
seems to me the quality of life will be so low, or one's life expectancy so
short, that having money won't matter anyway, because one won't be able to
enjoy it.

Of course anyone else having thoughts beyond what they think is the obvious,
please respond too.

jay wrote:
- quote -

Look at it this way: the insurance companies set the premiums such that
they make a profit if you have the average amount of medical expenses
for someone your age, so by definition, on average over the very long
run (longer than your lifetime) your expenses will be 20% to 30% less
than what they would charge you for premiums. So, if you have the
assets and you think your luck will probably be no worse than average,
then drop the insurance.

Also, once you drop the insurance you can be a selective consumer of
health care. There are a lot of therapies, medications, procedures,
etc. out there which have very limited effectiveness, or which will not
make the difference between life or death, but which are very
expensive. The only reason these marginal procedures, etc. survive is
because people with health insurance don't pay for them out of their
own pockets so they are willing to try them on the insurance company's
nickel. Once you are paying entirely out of pocket you will research
everything and make more informed decisions that will cut your
expenses.

If you have a condition which gives you time to shop around, you can
look into getting care in other countries where it is cheaper. You can
also shop around locally and negotiate for lower prices. The janitor
at my old law office negotiated a substantial discount on his bypass
surgery in advance of the operation.

If you drop health insurance be sure to get lots of uninsured and
underinsured motorist coverage; that way you will be covered if you are
severely injured in an auto accident.

In the end, if you do have some life-threatening medical condition, and
you pay $1 million on treatment that saves your life, you will consider
it money well spent. The money will seem relatively minor.

Andy

<<How do you know it's the cheapest? >
Actually, the cheapest is slightly lower for the $10,000 deductible
catastrophic plan. Oxford offers it for $310.38, which is a little cheaper
than $328. Please keep in mind that there are a limited number of Health
Insurance carriers in NJ, and NJ regularly publishes a rate comparison
sheet. For the 10,000 deductible catastrophic plan, there are only two
carriers in NJ that offer it. They are Horizon Blue Cross Blue Shield, and
Oxford.

<<In any event, that $328 per month is the least one can pay for long-term
catastrophic health insurance in NJ is among the most depressing U.S.
factoids I've read in weeks.>
It's actually $310, since Oxford is the cheaper of the two, but it's not
much lower than $328. One must keep in mind that Horizon Blue Cross will
guarantee the rates for one year after signing up or renewing. Oxford
adjusts the premiums every month.

<<I'm with the other poster who implied that weighing a change in locale
might
be appropriate. I put in 40-year-old male at the site I listed earlier for a
NJ zip code, then for a zip code in my area, and the two cheapest rates were
$212 and $83, respectively.>
Yes, in other states the rates can be much lower.

<<That's an odd rule. It means if I take good care of myself, but my
neighbor
does not, then I get to pay for his/her recklessness. (It means other
things, too, of course.) More fodder for people interested in health care
reform so they're not broke after, say, an appendectomy. >
Very true.

<<New Jersey go socialist recently or something?>
Who knows...this system has been in effect for at least 6 years. They are
talking about changing the rules.

J.

<<What do you mean by "protecting my assets"? It sounds like you're
looking for some investment/legal mechanism for your assets that can't
be tapped by a creditor in the event that you owe a mound of cash for a
major medical event. >
Does something like that exist?

J.

"jay" <jaynews[at]verizon.net> wrote
- quote -

How do you know it's the cheapest?

I'm not saying you're wrong. I just want to know about ways to compare
health insurer costs.

In any event, that $328 per month is the least one can pay for long-term
catastrophic health insurance in NJ is among the most depressing U.S.
factoids I've read in weeks.

I'm with the other poster who implied that weighing a change in locale might
be appropriate. I put in 40-year-old male at the site I listed earlier for a
NJ zip code, then for a zip code in my area, and the two cheapest rates were
$212 and $83, respectively.

- quote -

That's an odd rule. It means if I take good care of myself, but my neighbor
does not, then I get to pay for his/her recklessness. (It means other
things, too, of course.) More fodder for people interested in health care
reform so they're not broke after, say, an appendectomy.

New Jersey go socialist recently or something?

- quote -

<<Does NJ also ignore age?>
Yes, age is ignored (except for the Basic & Essential Plan).

J.

<<Jay, you say you're in good health and only 40 years old. In your previous
post, you said you were paying over $300 a month for a catastrophic plan
($10k deductible, among other limits). If there were a catastrophic plan
available to you for say $150 a month, would you consider it>
Yes, if it existed, but such a plan does not exist in NJ. My plan used to
cost $153 per month in 2002. Then they raised it to 208 per month in 2003,
then they raised to to 242 per month in 2003, and this year they raised it
to 328 per month. This is the cheapest catastrophic plan available in NJ,
and everyone who signs up for it pays the same rates regardless of health
history.

<<For the edification of others, do you have something in your health
history
that may be pushing your catastropic health insurance premium way high? If
you choose to answer, no need to elaborate. Just a simple yes or no would be
helpful.>
No. My health history is excellent. New Jersey currently has a rule that
your health history has nothing to do with the premium. My premium, for any
plan I select, is the same as anyone elses.

J.

jay wrote:

- quote -

What do you mean by "protecting my assets"? It sounds like you're
looking for some investment/legal mechanism for your assets that can't
be tapped by a creditor in the event that you owe a mound of cash for a
major medical event.

jay wrote:

- quote -

Does NJ also ignore age?

Out here in rainy (at the moment) Washington state, a 40 year old
could buy a $2,500 deductible, 25% co-pay, $7,500 maximum out of
pocket policy for about $77 per month. No prescription coverage,
not sure about chemo. I'm currently 56 and this would cost me
$124 per month.

MTW

Jay, you say you're in good health and only 40 years old. In your previous
post, you said you were paying over $300 a month for a catastrophic plan
($10k deductible, among other limits). If there were a catastrophic plan
available to you for say $150 a month, would you consider it?

I have a relative who's 47, IMO in lousy health, and who is paying $110 a
month for catastrophic, long-term health insurance with Blue Cross/Blue
Shield. But this is not in the NJ/NYC area.

For the edification of others, do you have something in your health history
that may be pushing your catastropic health insurance premium way high? If
you choose to answer, no need to elaborate. Just a simple yes or no would be
helpful.

You might want to check the following for some ideas on catastropic health
insurance plans. Make sure they're all long-term plans.
https://www.ehealthinsurance.com/

Currently I am fortunate to have approximately 1.7 million in assets if you
include the 500K house that I own with no mortgage. I currently earn around
70K in self-employment income. I put around 20K per year into savings.

I would like the option of retiring within 10 years, however the rising cost
of health insurance premiums has me concerned. I am 40 years old and in
overall good health. I am also concerned about protecting the assets I
have.

Here are what I see as my only real options with regard to Health Insurance
in NJ: (please be aware that HSA eligible accounts would cost $700 or more
per month in NJ, so I have already rejected that option)

1) Going with no health insurance whatsoever and just saving the money on
the premiums, and betting that, in the long run, I'll save enough to cover
future medical costs. So far, this would have worked out the best for me,
but there is no guarantee that things won't change as I get older. My
assets would be completely unprotected should something major happen.

2) I have the option of going with a cheaper "Basic & Essential HMO plan"
which has a lot of exclusions, such as chemotherapy, prescription drugs,
etc. which currently is $218 per month.

3) I can bite the bullet and pay $410 per month for the comprehensive HMO
plan. However, staying with this plan will cost me $440,000 over a 25 year
period in premiums, after which I will be eligible for Medicare. In this
plan, I will be subject to all the HMO red tape, and, believe me, they can
be resistant to actually paying in emergency situations that would require
going out of network. Nevertheless, this plan is still the best coverage
relative to the other 4 options.

4) I can stay with my current plan, which is an indemnity plan with a
$10,000 plus 50% coinsurance after the deductible is reached. This
currently costs $328 per month but the premium goes up around 30%, on
average, every year. Next year I suspect it will be more expensive than the
above option which is the comprehensive HMO.

5) There are some discount plans which work like a PPO that I could join.
These are just plans where a network of physicians have agreed to give
members a discount. This would probably cost me $80 to $100 per month in
membership fees. **This is NOT health insurance.**

If you were me, which one of these 5 options would you choose. Please
choose one.

Is there any other way of protecting my assets besides having Health
Insurance? (again, I know about MSAs and HSAs, but in NJ the premiums are
too high)

Thank you,

J.