Health Insurance should not be related to your employer. Ok. I said it. Yeah. That’s right and I mean it too. Health benefits started out as a way of keeping employees tied to the company for the robber barons of the past. They were meant to be something that they could give to employees to keep them on the job and since everyone living in the town already worked for them anyway, it sorta made sense. Fast forward to the 2000’s and we are stuck with such an antiquated system it makes me weep.
If you’ve been following my blog, you know that I decided to leave one firm and join the other right in the middle of my recovery and rehab. What you may not have known is that I decided (for other financial reasons) to setup my own consulting company and become a self-employeed American.
In the finest tradition of independent consultants everywhere that decision came with the realization that I must face the reality of what to do about health insurance for my family. I no longer had a “real” employer to look to for benefits. I had to get them on my own, of course the government did try to protect me to some extent – Cobra. This law states that I have the option of keeping the insurance my former company partially paid for to the tune of $1,807.90 a month for annual total of $21,694.80 a year. And, I can keep that for the next 18 months – lucky me. After that it’s Obamacare time!
BTW: I did a quick search on the marketplace for New Jersey and found that there wasn’t even a policy with a low-deductible option like the one I had enrolled in for any price. There were other high deductible plans that we could have purchased for less than $21K, but my accountant told me that it was much better to pay higher premiums because 100% of premiums are pre-tax while the high deductible is likely not tax deductible… Insane laws.
But, the real luck came in the form of my wife picking up a full time job with awesome health benefits – Fantastic, I can turn that $21K in to retirement savings! But wait… this is where the luck runs out. My coverage ended on Jan 31st and her new coverage starts Mar 1st.
But that’s ok, we just have to skate our way through February and everything will be great – wrong… My foot didn’t go along with that plan. It was the beginning of February when I had that infection that put me in the local hospital. That really, really expensive hospital.
Now the most asinine (and, awesome) thing about COBRA (law requiring insurers to offer continuation of benefits for an ex employee as long as they pay both the employee + employer part + small shipping and handling fee) is that you have 90 days from seperation to notify them of the renewal of coverage and then another n days (not sure how many) to actually pay for the insurance… which gives you coverage retroactive to the day after your original coverage ended. So in my case, I had to drop $1,800 hard earned dollars to pay for coverage in Feb and because of this loop hole my stay at the hospital was covered. Not sure it’s fair, but well… I’ll take whatever I can get at this point.
When I was admitted to the hospital, I hadn’t even received the Cobra paperwork yet, so they registered me as a self-pay. They were very nice, but it was like that was some kind of disease or something. At this point, I’ve received over 10K in bills for a single day/night in the hospital with 3 bags of antibiotics, 4 regular strength Tylenol and a consultation from the infectious disease specialist affiliated with the hospital. My surgeon didn’t bill me at all – considered it post-op care and told me not to worry about it.
I’ve since re-activated my health insurance and paid for February, which means that my hospital stay should be almost 100% covered (besides a $150 a day co-pay). I can see how if you didn’t have insurance and had to stay for a week or more it would totally bankrupt you.
I’m not sure how to get there, but I honestly think that everyone should purchase their own insurance like we do car or home insurance. And, like those policies you pay for them independent of if you are working or not. I won’t get into the problems of how to get to that point or who would pay (employer gives you money toward a policy, or they just bump up your pay by whatever they used to give you for benefits and you take that to the market, or the gov allows you to deduct the premiums, lots of possibilities, or even the gov increases the income tax to pay for basic benefits and you can purchase additional insurance, lots of possibilities)…
I’ll just say that I shouldn’t have had a gap at all and I’m very happy for the existence of Cobra.