

Ask YC: Health Insurance? - donw

I've finally graduated (again), and I'm working on finally getting all the bits of relevant paperwork and such together for my own company.  My student health insurance will expire in a few months, and so I was wondering what other entrepreneurs, preferably those located in California, do for health coverage?
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jdg
You're young. Health insurance is going to be relatively cheap.

I just signed up for a plan for my wife and I (26/25 respectively), and it's
going to cost us around $250/mo with a reasonable deductible, office copay's
and prescription coverage. Dental is an extra $50/mo.

The trick(?) for me was to contact the largest insurance company here in my
home state ( _not_ California) and ask to speak to their small business
department. We built a custom plan rather than using one of their "off-the-
shelf" plans that most people would pick. This let me play with the numbers
based on our medical history and what we felt we could cover as far as our
deductible goes.

Really though, call a few of the largest companies and just start walking
through the process.

One tip -- do it _before_ your current insurance expires. At least here, if
you are currently covered then there is no way they can decline you(?). The
monthly cost may be unreasonable, but they have to at least offer you
coverage.

~~~
silencio
It's a good idea to start looking into it now before current insurance
expires, but I'm not so sure about the existing coverage mattering much. If
there are no preexisting conditions, great, but if you do have at least one,
I'm pretty sure they can decline you even with existing insurance coverage
except in certain circumstances (e.g. cobra).

<http://www.mrmib.ca.gov/MRMIB/MRMIP.shtml> is worth looking into if you find
yourself unable to get health insurance as a result.

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jonknee
A high-deductible plan with an HSA is the way to go. You can put up to your
deductible into the HSA annually with pre-tax dollars, so after a year or two
you have money in the bank in case anything happens (and depending on your
cash-flow can either continue to pay into). It's a great deal.

~~~
gexla
This is what I have done as well. Health Insurance is really just financial
disaster (health care originated) insurance. The deductibles are high but they
will be more affordable than the alternative. To make things easier on
yourself in case you do get a problem, make sure you actually contribute to
the account. Between the plan and contributions to the account you might be
paying as much as people with a more traditional account but at least that
money (minus the premium) is going into your own nest egg.

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larrykubin
I have an HSA as well. It seems like a great choice to me. Why?

I'm in my 20's and haven't had any major health problems, but don't want some
random disaster to wipe out my consulting business. I also pay really high
taxes on my profits, like to save money, and enjoy buying stocks.

With an HSA, I can put away ~$2,700 a year for health expenses, and that money
isn't taxed. I pay Aetna $62 a month, which is $744 a year. How much would I
have been taxed on the $2,700 I put away? Probably $700-800 dollars. So it has
the benefits of a traditional IRA. While the money is in my HSA, I can make
some conservative investments such as buying an ETF that tracks the S&P 500 or
if I want more growth, maybe invest in the BRIC's (Brazil/Russia/India/China)
or some tech stocks. That money can grow tax free and is reserved in case of
emergency.

What if I live a perfectly healthy life and nothing happens? Well, I can
withdraw all of that money tax-free when I'm 59.5 (yes that's a long way off).
So it has the benefits of a Roth IRA as well.

If you don't have many health problems and have a few thousand in earnings
that you can put away each year, I think it's a great deal.

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tlrobinson
Tonik by Blue Cross (now called Anthem in CA) has low monthly premiums (as low
as $77/month) but pretty high deductibles ($1,500-$5000)

<https://www.tonikhealth.com/>

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silencio
i have insurance through anthem blue cross, but they've made me so unhappy in
so many ways that sometimes I have to actually consider if it's worth it to
not have insurance at all. they disgust me so much.

...until something (medically) bad happens, and then I realize getting ripped
off by them is not nearly as bad as not having insurance at all.

if you ever decide to go talk to an agent/broker, sometimes they can help you
find plans that are right for you, but sometimes mistakes happen, so double
check everything. my mom's agent screwed up and she actually went without
insurance for something like half a year..i can't imagine what would have
happened if anything bad occurred..we didn't catch it until she went for a
regular checkup and there was a question about the insurance.

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PI
Although this won't help you (unless you're considering moving to the UK ;))
but I'm glad that we've got the NHS (National Health Service) just looking at
some of these costs, $300 a month for health insurance! it makes my head spin.

For me if the UK didn't have free health care then I would be probably be
paying a lot for all the health care (for a fact I know some medicines I take
cost the NHS thousands of pounds a month to buy).

Not to put a downer on things. Good luck setting up your own business.

~~~
snewe
Your health insurance isn't free: the UK has a much higher marginal tax rate.

~~~
twak
yes. but it makes health insurance a non-issue for companies. we don't compete
over it & we're not scared of loosing it with our jobs.

the American system forces the individual to be responsible for their health
(smoker? that'll cost) and keeps workers focussed on pleasing their employers.

~~~
xlnt
yeah, individuals are responsible. in the UK it's (smoker? that'll cost
everyone). people don't pay for the costs they create.

~~~
PI
sorry, I didn't want this to turn "political" (I don't think this is the right
setting), and not for one minute do I think the NHS is the be all and end all,
but for someone in my position (a person with a serious medical condition) I
don't think I could survive (financially and probably health-wise) in the US.

So I'm glad that I live in a country which contributes as a whole towards the
nations health.

Update: LPTS says we should get political, so lets.

~~~
xlnt
In the US, children get medical insurance on their parent's plan and then,
when they grow up, can buy their own coverage before that lapses.

So if you are medically unlucky, it's OK, many people pay into the insurance
system, and then the medically unlucky people get money back out.

It's very similar to everyone pays taxes for medical insurance, except that
instead of one government medical insurance company we have different ones
that compete with each other and subscription is voluntary.

There are various important details. Maybe we get some of them wrong. But the
general idea is OK and wouldn't screw you over in principle.

~~~
mlinsey
This sounds good except for when Insurance Companies get so good at
determining who exactly is likely to be "medically unlucky" that those people
are effectively prevented from getting any healthcare at all.

This is a very real problem for entrepreneurs who want to buy their own
healthcare, and also for very small companies. I know of one company that was
basically prevented from hiring an extremely talented individual because that
individual was flagged as a high risk to be "medically unlucky", and if she
joined the company than _everyone in the company_ would be ineligible for
healthcare - in this particular instance if you're less than five people than
you can't buy a group policy with one of those five being a high-risk
individual.

So these high risk individuals are either able to join a large company where
they can be covered in a large group plan (better hope you're a skilled
worker, since very low-end employers have incentives to hire part-timers or
contractors to avoid paying benefits), or they have no coverage and go to the
emergency room when catastrophic problems emerge, at great cost to the
taxpayers who pay for those emergency rooms which (for quite good moral
reasons) don't turn away patients who can't afford visits.

Maybe this is one of the things you grouped under "various important details",
but I think it's more than a detail - denying coverage to risky people is
going to be an inherent consequence of introducing profit motives into health
insurance.

I don't necessarily think socialized medicine is the answer, given the
inefficiencies it introduces. The best middle ground might be greater
regulation of insurance companies to prohibit them from denying coverage to
sick individuals. But given the risks on each side, I would frankly much
rather err in the direction of too much socialization.

~~~
xlnt
the high risk individual could have already had individual coverage, and kept
it, and been paid a higher salary to compensate for less benefits.

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xirium
See <http://news.ycombinator.com/item?id=181697> for a recent discussion on
healthcare costs.

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nfriedly
<shameless promotion> If you want someone decent to talk to, my current
employer also owns an insurance agency that only does self employed/individual
insurance. Here's a list of the agents they have that are licensed in CA (only
6 at the moment)

<http://www.usabghome.com/states.php?state=ca>

</shameless promotion>

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mattmaroon
Marry a teacher. Turns out they get that stuff for free.

~~~
ews
Think about marrying an european as well

~~~
davidw
Doesn't work if you live in the US, though, afaik:-)

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wavesplash
While you're still young and solo Kaiser Perminante has some cheap plans to
check out. Some folks hate Kaiser, but if anything serious goes wrong, Kaiser
has one of the best operation records of any HMO. When you guys have some cash
consider a PEO like Gevity or TriNet. They can get you bigco benefit plans for
your startup at reasonable cost.

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bigtoga
You have a decision to make: can you self-insure for the minor costs or not?
By "self-insure", I mean can you handle up to $2500 or $5000 per year of
health costs if you had to? You can get $500 deductible insurance plan for
$400-$600 or $5000 deductible plan for $180-$250.

Look for an HSA or ask someone for help on those.

