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Ask HN: Bootstrapped US founders, who do you use for health insurance?
82 points by nodesocket 14 days ago | hide | past | web | 115 comments | favorite
I'm a single founder in California, and via CoveredCA a decent health care plan (PPO) silver from Blue Of California costs $460 a month. I don't qualify for any discounts so I have to pay full individual price.

So $5,520 a year for health insurance! Ridiculously expensive. I'm looking for any other options, perhaps plans geared toward small businesses with less subsidies.

Do what I did six years ago: Marry an Australian and leave the US. I now pay AU $350/month for private medical insurance for my family of five, in addition to being able to access Australia's world-class public Medicare medical system.

It's only when you live outside of the US that you realize it has the worst healthcare system in the developed world (unless you're very rich, in which case it's the best, which says a lot about the US political system).

I chuckled at this being the top comment. I did the same and will be joining you soon in Melbourne!

I think the Australian system is the best model for the US to copy, not Denmark or France or what not. But it's never even mentioned here since apparently it's unpatriotic to admit other countries have figured out things we can learn from. It's got the essential public option with the private system running in parallel for those that want it or can afford it (higher incomes are tax incentivized to obtain it). The Pharmaceutical Benefits Scheme is desperately needed in America but the pharma lobby would burn the country down before they allowed that to happen.

"It's only when you live outside of the US that you realize it has the worst healthcare system in the developed world (unless you're very rich, in which case it's the best, which says a lot about the US political system)."

As an Australian who moved to the US, this * 1000.

Yes, no healthcare is free. But a 1-1.5% increase in income taxes to pay for healthcare is a whole world away from the US situation:

- hospital stay in Melbourne, 9 days. Out of pocket, $36 for in room TV rental (this was 15y ago), including take-home meds

- kidney stone in Seattle, $8,000+ out of pocket AFTER insurance (and this was good insurance, but admittedly more complex than average kidney stone - surgical removal attempted, infection found, stenting, lithotripsy a week later)

How does your average person come up with $8K to deal with a kidney stone? Something many people might have to deal with multiple times in their life, if not annually?

Yeah it's ridiculous. I was in the ER in California for 2.5 hours (I got IV and a CT scan). The bill was $4600. I stayed overnight in Japan entering the ER and got IV only and it was $41.

I run a bootstrapped non-profit in NYC with two employees (myself and my wife). A bronze plan for my family on the NY marketplace is about $1,200+ month with an $8k-14k deductible. I was hoping to get something through JustWorks, but since it's really just one household in our company, we can't apply for that (requires at least 3 separate insurees).

Our combined family income makes us ineligible for subsidies, so I guess my option is to pay $14k a year for an $8k deductible with little coverage. I guess now all plans are HDHP, but with 3-5x the premium.

This is why I can't be self employed. The situation is out of control. That's the rate for the small local carriers too with poor provider networks. The major carriers such as United go for $2,000/mo.

Don't forget the 30% coinsurance after you get past that deductible!

I don't understand the subsidies at all. In 2015, ACA gave people waivers (no penalty!) if the minimum insurance was more than 8.05% of household income. The minimum plan for a family in NYC on the NY Healthcare Exchange is $12,500/year. Self-employed families making less than $147,000 and more than $60,000 (I think that's where subsidies cut off) are overlooked and left without a safety net.

It's like that everywhere. family plan at my work or through exchange is like 17.5k before they pay out dime one.

We use a direct medical expense sharing non-profit. Ours is called Samaritan but there are a few of them. Basically, every month we write a check for about $460 to another member, and the one time we had a hospital stay, we got a bunch of checks to cover the full amount. (It covers everything but $300, but if you negotiate the price down at all, the full amount is covered.)

That's a family plan price and we were looking at 2-3 times that with a big out-of-pocket obligation on the Exchange. So far it's saved us about $10,000 and we really like the communal model.

(Posting under an alt account to avoid giving out too much personal info)

This is definitely a starting to become a popular option. I had just commented over in another thread about it https://news.ycombinator.com/item?id=13356900

It's pretty affordable and the nicest part is most of these health shares are ACA exempt so you don't get hit by the fine of not having "normal" insurance.

Do you use a Direct Primary Health provider to cover normal doctor visits and things? I'm a fan.

Right now we just pay cash for the same doctors we would visit under insurance. I like the idea of direct care but our area of the country is slow to adopt a lot of things. Telehealth (paying $35-$40 for routine diagnoses and prescriptions) has saved us some money.

Are there ones not run by religion? The health sharing plans I have seen require such things as belonging to a certain church and not drinking any alcohol.

I think they're all Christian, but I don't know any that require belonging to a specific church or totally abstaining from alcohol. I think they do all ban smoking habitually and getting drunk, though. And they all have a broad statement of faith and require participating in some kind of regular church/spiritual community.

Is it hard to get the aca exception with these? Any risk of having to pay the penalty?

Also is there any guruntee you wouldn't go bankrupt for a major medical issue? Are they very reliable?

No issue getting the exception. These programs are explicitly mentioned in the ACA regulation and tax prep software supports them.

No guarantees. You can't take anyone to court to make them pay your bills. However, if you don't make your monthly payment, you've effectively cancelled your membership and the person who was supposed to receive your check gets it from someone else so they're still made whole. Personally, I am more comfortable with the risk of a long-running voluntary system failing than I was with the risk of insurance deciding to screw me on coverage, accidentally getting out-of-network care, etc. But I looked into it for a couple of years before I reached that conclusion.

A little off topic but I decided to look this up.

What would taxes be if we compared the US to Canada?

Using the following two tools: https://simpletax.ca/calculator https://smartasset.com/taxes/california-tax-calculator

For 50k a year in British Colombia for Canada and California for the US I get the following:

BC: $8,372 CA: $11,112

At 100k with 18k contributed to 401k/RRSP the numbers are 17.5K and 25.8k for BC and CA.

Unless I missed typed something because it's late we Americans are getting a raw deal. I realize Canada has VAT, but CA has very high sales taxes and I did not include the cost of an exchange plan. What you are looking is the Income and FICA taxes alone.

You compared 50k nominal CAD and USD, rather than the same after exchange rate. Googling "50000 usd in cad" gives me $66,280 CAD; plugging that into your first link gives me an after-tax income of $53,317 CAD, which is $40,225 USD, a lot closer to the $38,888 Californian after-tax income.

More importantly, besides VAT (actually called GST in Canada) there's all the employer-side taxes that aren't advertised in a job posting. Try using the self-employment box in your Canadian calculator; for $66,820 CAD in self-employed income in BC, you end up with $48,229 CAD after tax, or only $36,378 USD on $50,000 USD.

That's not really fair or useful either, because the same situation will have all kinds of tax implications in CA as well. My point is more than simply looking at "this is what income tax is in jurisdiction A vs jurisdiction B" is not necessarily reflective of what the tax burden's actually like.

Kind of pointless. The CAD had parity with USD not long ago anyway.

That particular simpletax calculator is weirdly broken -- it seems to ignore payroll taxes. (I say weirdly, because simpletax usually doesn't bungle things like that.) Once you include CPP (Canada's version of Social Security) and Employment Insurance (benefits for unemployed people, but not remotely resembling insurance despite the name), someone earning $50k in BC pays just over $10k... plus another $900/month (more if you're not single) of mandatory tax-but-not-called-a-tax government medical premiums.

So for your hypothetical $50k/year worker, the tax burdens are pretty similar; BC+Canada sales taxes come to 12% which I believe is a bit higher than California's sales taxes, but of course the BC resident has government medical coverage.

Two important caveats however:

1. Depending on your income, BC is the lowest-tax or very close to the lowest-tax jurisdiction in Canada. Someone earning $50k in Quebec would pay around $13k of income taxes instead of $10k.

2. Salaries in Canada are vastly lower than San Francisco / Silicon Valley salaries.

>>2. Salaries in Canada are vastly lower than San Francisco / Silicon Valley salaries.

This, so much this. As a Canadian (living in Edmonton, AB moving to CA in a few days) the difference in pay is simply staggering. Since a lot of our prices are CAD/USD exchange adjusted (essentially buying, for example, a GTX 1080 is the same in USD, but costs "300" dollars more in here) the difference is compounded even further. Its not unheard of making 2-3x in the Valley compared to what you make up North. So then the tax situation becomes moot, because we're talking about the amount of cash that you take home which after all the taxes, and even the living expenses, is still significantly higher.

> That particular simpletax calculator is weirdly broken -- it seems to ignore payroll taxes. ... Once you include CPP (Canada's version of Social Security) and Employment Insurance

That is disappointing. I̶ ̶w̶i̶l̶l̶ ̶a̶m̶e̶n̶d̶ ̶m̶y̶ ̶c̶o̶m̶m̶e̶n̶t̶.̶ (Can't amend, the above post is too old.)

> someone earning $50k in BC pays just over $10k... plus another $900/month (more if you're not single) of mandatory tax-but-not-called-a-tax government medical premiums.

$900 a month? Are you certain of that? That seems very high, unless it is paid by the employer. Is that a fixed amount or is it dependent on income?

> 1. Depending on your income, BC is the lowest-tax or very close to the lowest-tax jurisdiction in Canada. Someone earning $50k in Quebec would pay around $13k of income taxes instead of $10k.

I chose BC because it seemed to be having it's own tech boom in Vancouver and has very mild weather in that area. I felt that would be relevant to alot of people here.

$900 a month? Are you certain of that?

As cbowal noted, the $900 is per year, not per month. I'd fix it above, but apparently my comment is also too old to be corrected now...

I chose BC because it seemed to be having it's own tech boom in Vancouver and has very mild weather in that area. I felt that would be relevant to alot of people here.

Oh, I entirely agree -- the Vancouver area is the only part of Canada I would want to live in. (Well, maybe Victoria, but that has the same weather and tax rates.) My point was simply that Canada's reputation for being a high-tax jurisdiction isn't entirely undeserved when you consider that most of Canada has significantly higher taxes than BC.

Correction: British Columbia's MSP Premiums for a single adult are $75/month or ($900/YEAR).

Whoops! I started to write $75/month and then thought "no, an annual number is more useful", but clearly forgot to change the units... thanks for catching this!

Coupled with that is the propaganda pushed by various political parties and interested factions that we are among the highest taxed in the world, if not the highest taxed.

Many people believe that despite it being a statement which is entirely a fiction.

Ha, that's a deal. Prior to joining my current company, I was paying almost $2k/month.. and that was up from $1k/month just 4 years before. :(

I'd recommend checking out your local professional associations. IEEE and ACM have some options:



Any one has experience with using either of these two? Can you please chime in with the advantages of going through this vs going for individual plan?

500/mo for silver plans is pretty standard.

If you want a better health care deal you'd need to leave the USA or maybe become a member of congress.

A little background: The health plan market roughly divides into individual health plans, small group (2-50 FTEs), and group. You fall into the individual market, at least for now, it seems.

A small group health plan isn't likely to be much less expensive, if any, and the small business health exchange SHOP (CoveredCA, Healthcare.gov, etc), the plans are pretty much the same individual plans.

The Affordable Care Act defined Essential Health Benefits (EHBs) which are basically a way to ensure that common and critical types of health care are guaranteed to be covered, along with a variety of other market making aspects (individual mandate, pre-existing conditions, etc). Prior to this, people could sell "health insurance" which covered few services, had strict amount limits, and could deny claims for various unclear reasons.

If you're going to earn less than $50k in 2017, then you'll qualify for a subsidy on your plan. If not, your options are going uninsured (potentially getting a tax fine at the end of the year), or enrolling in an individual market plan.

Stride Health, https://www.stridehealth.com helps consumers enroll in plans through CoveredCA and Healthcare.gov, as well as directly through the health plans. * Prices are the same you'll find anywhere else (they're set by law). I'd encourage you to try it, and hopefully it will take some of the headache out of it. * There's a support line with a very knowledgable staff if you have more questions about the impact of your income earning for the next year, or any more questions about your health care needs. * We'll also be there to help you throughout the year, and make sure to close the loop with your taxes the following year.

> potentially getting a tax fine at the end of the year

A couple of years ago a snafu caused my insurance to go unpaid. When it got cancelled, I couldn't pay for a policy anywhere due to enrollment rules, and I think the monthly penalty on my taxes ended up being $230 or so per month my wife and I were uncovered.

If you don't qualify for any subsidy, you should definitely just purchase health insurance directly through the carrier.

I initially purchased insurance via CoveredCA (no subsidy) and they just acted as a middleman between my family and Blue Shield without providing any benefit.

Thanks that's great advice. It seems there is absolutely zero discounts using CoveredCA when you earn more than $50,000 a year.

Use your 'company' to pay for your expenses and draw less than $50,000 as salary. Problem solved.

If I use my company credit card, how does that help? Both scenarios would be tax write offs correct?

You said that you need to be making < $50,000 to be considered for a discount from coveredCa. If you're using your company to pay for your expenses, and you draw less than 50G in personal income. You should be eligible for a discount.

I have a 100% ownership LLC, so my personal income is combined with business income.

I think what the previous poster is getting at is that in the US it may benefit you to have a more byzantine vehicle for your work. Such as an SCorp.

It'll take a bit more research and possibly some extra filing but you may benefit from it. In exchange for moving your income to a more employee like arrangement you'll be able to move things like this directly above the fold in some cases.

Or LLC filing as SCorp for federal tax purposes. Although that's the sort of thing you'll want to look at the 1040 rules for.

Also known as tax fraud.

I believe you can't pay for employees' individual plans using company money because they might qualify for subsidies. Having taxpayers subsidize your company benefits is a no-no, so you'd need a group plan once you offer health insurance for employees.

For CoveredCA, does anyone know if capital gains count towards $50k? Or 'just' your ordinary income?

Yes, looks like it includes all forms of income - capital gains, dividends, etc. However, it is using the MAGI so you could potentially use a solo 401(k) to defer income and get under that threshold. http://insuremekevin.com/type-income-counted-covered-califor...

Get a spouse who works and is gracious enough to pay for your health insurance via his/her company plan :-)

That's how I do it, but this probably puts me in the "lucky" category...

Seeking spouse with good health insurance plan...

I actually know a guy that was amicably divorced for 10+ years but remained married on paper just so he could keep his healthcare benefits.

They have children so there was mutual interest in making sure all family members were cared for.

This is actually a pretty significant incentive issue with health insurance. Companies are encouraged to not choose the most comprehensive plan, so that their dual-income married employees choose to use the other company's insurance.

My company actually adds a surcharge to the family plan if your spouse works and is offered health insurance through their employer.

How would they know?

Not quite sure. I suppose it's an honor system until they find out otherwise. Lying on an insurance application is an incredibly effective way to lose your coverage completely.

Your coverage is essentially $X higher until you sign the waiver saying "I affirm that my spouse has no other coverage options from another employer". That's how you're obligated to the policy.

HIPAA also doesn't prevent an employer from finding out if your spouse has insurance options elsewhere.

This is something I've been looking into for the last few weeks for my 3 person NYC based startup. All of the options through the exchanges/brokers are laughable. If you are young and healthy, a catastrophic plan might be your best bet. I was paying ~$125 a month for Oscar last year. Coverage only kicked in after ~$6600, but I was just looking for something that covered me from an IRS/penalty perspective. The premium went up ~33%, but sadly that is still my best bet without a company plan.

We just signed up for JustWorks, a PEO, primarily because their healthcare plans are much cheaper than going direct to brokers as a 3 person company. They require 2 people though so if you are solo I don't think this is an option for you.

Trinet (also a PEO) accepts a one person company. (I signed up through a WeWork special though...don't know for sure about new enrollments.)

try Kaiser permanente

cheaper and the model is more efficient. yes you give up some choice but there's a reason it is cheaper

before you poo poo it I would give it a try with an open mind

I loved Kaiser when I was in SF. they delivered an awesome service. I just wish they were in Florida :[

I too love kaiser

Kaiser is good, but it isn't cheaper. Silver Blue Cross $462, Silver Kaiser $465. Bronze Blue Cross $319. Bronze Kaiser $337. Might be better value to go with Kaiser, but you won't save on your premiums.

Does that include subsidies? I would assume, based on your income as a founder, that you'd qualify for subsidies for plans on healthcare.gov. If you don't (>$60-70k/year income), even high deductible plans are in that monthly range you quoted (my individual high deductible marketplace plan went from ~$290/month to ~$500/month [$9000 deductible], so my wife, daughter, and I are now on a PPO plan at $1300/month).

Any income greater than $50,000 a year does not qualify for any California assistance. $50,000 a year is completely unlivable where I live in the bay area. You have to be near poverty (bay area) to get any government assistance.

> You have to be near poverty (equivalent in bay area) to get any government assistance.

Assistance is for those who need it, not those who willingly choose to live in a high COI area. It is possible to live in CA on $50k/year.

Would you pay that assistance back if you had a liquidity event? Probably not.

I'd prefer to not get into a political discussion, but once I get on a health care plan, my full premiums will be subsidizing others, so where's my money back when I don't use any of my health care benefits?

Also, you think it's fair that somebody who makes $55,000 pays the same amount for health insurance as somebody that makes $500,000 a year?

Let's not get into politics then.

At your income level, you're not getting subsidies. You can either pay the IRS penalty, around $2k at what I'm estimating your income at, and cash for whatever health expenses come up, or you can seek out a religious organization who will give you a waiver if you join their program (note: the healthcare that can be provided through such a financial program is probably not what you're going to prefer when the time comes for your healthcare needs to be addressed, caveat emptor).

Another option is to move out of the country before the end of the month; you're not required to be insured if you live outside the US at least 330 days/year.

You could also look at a cheaper bronze HDHP plan instead.


> Also, you think it's fair that somebody who makes $55,000 pays the same amount for health insurance as somebody that makes $500,000 a year?

Not at all! I'm just telling you your options. Don't like it? Quit your startup and go into politics. Good people need to grind day and night to fix things like this. Your fight is not with me. The situation in general sucks, and I am genuinely sorry about your frustration with your healthcare insurance costs.

I thought we weren't getting into politics though (re: your edit adding the last line).

where's my money back when I don't use any of my health care benefits?

I don't think you've fully grasped the concept of "insurance".

And yet many people somehow manage to live in the Bay Area on $50K per year. It's not comfortable but it's certainly possible. Most of us don't get to live exactly where we want to.

Typically this happens on food stamps and subsidized housing. Which is a route -- but it's a little harder for a tech worker though than someone working retail, because the income documentation is less and higher variance.

That's not the typical route at all. A single person with a $50K income can absolutely afford to rent a small apartment with a roommate in some of the cheaper neighborhoods and live without food stamps or subsidized housing. There may not be much left over for dining out or entertainment but it's totally doable.

A single person, yes, a family no.

I sponsored my own visa & moved to Hong Kong where all residents (even temporary) are covered by almost free public health care.

Look into Direct Primary Care. If it is available in your area, it is an ACA compliant option when paired with a health savings account or high deductible coverage.

I'm pretty sure I have to have full insurance or I'm going to get a nice big tax penalty at the end of year.

> My understanding is that health insurance originated in this country as a means to plump up employee compensation in a situation where paying more wages was not desirable. You could not entice good employees by offering them a pay raise because it bumped them up into another tax bracket and it just wasn't worth it to them. But the way health insurance got handled, if you offered them a benefits package, it increased their quality of life without the punishing extra taxes.

You could not entice good employees by offering them a pay raise because it was illegal [0]

This passage also reflects a possible misunderstanding of how marginal income tax brackets work. In no situation does bumping someone into a higher tax bracket result in lower net pay.

[0] https://en.wikipedia.org/wiki/Stabilization_Act_of_1942

That statement is too strong and not correct. For examples of when a marginal tax rate can be over 100 percent, see the first answer here: http://money.stackexchange.com/questions/1258/why-would-you-... and here: https://www.epionline.org/wp-content/studies/shaviro_02-1999...

Thanks. I am considering doing a new piece because I get a lot of flack over details like that while people generally seem to miss the point relevant to our lives today that DPC is a legal alternative under the ACA and a genuinely better solution.

I am frustrated and not sure what I need to do differently to get that across effectively.

Edit: Feel free to nitpick this version: http://micheleincalifornia.blogspot.com/2017/01/direct-prima...

Maybe I shall eventually get it right (just in time for the law to change under Trump).

Thank you.

Sorry, I didn't mean for my comment to be taken as a criticism of the overall piece but rather a nitpick of that particular paragraph.

I agree that separating disaster/catastrophic coverage (ie: insurance ) from routine things like doctor visits (ie: health care ) is a good thing. I was aware of HDHP and HSA for the former but I did not know about DPC until you brought it to my attention with this comment thread.

Thank you.

It was written somewhat off the cuff and I did frame it as "as I understand it." I was just trying to give some general historical background for why the US has gotten to where it is currently, even though what we currently do is incredibly broken.

I don't know why I seem to inspire this kind of reaction in people, and maybe it isn't "me" per se, but I seem to get this a lot. And I am genuinely interested in figuring out if it is really something I do that I can somehow change.

Thank you for engaging me in meaty discussion.


FYI: Attempt #3 to explain why people should look into DPC:


Also submitted: https://news.ycombinator.com/item?id=13354383

I assume it will get no traction.

Best of luck in resolving your problem.

What happens when you need urgent medical care like the hospital using direct care?

That is what the high deductible insurance or health savings account is for.

i can't contribute to an HSA without subscribing to a high deductible plan.

" basically a membership in a clinic where you pay a monthly fee in order to get cheap access to your doctor... The monthly fee is substantially less than typical health insurance premiums."

But... I still need a high-deductible plan to contribute to an HSA to deal with catastrophic issues anyway. high deductible plans are putting colleagues of mine in to $1000/month premiums already - saying "spend even more $ each month on a membership plan" isn't going to cut it for most people I know.

5 year ago a 'high deductible' plan cost my family <$300/month. Today it's close to triple what I paid just a few years back.

Well, you are only giving me partial info here. I am not sure if you merely want to shoot down what I am saying or just what. I have found this if you actually want info:


How am I giving you only partial info?

"High deductible" plans, on their own, are very unaffordable relative to only a few years ago.

Your link illustrates this even more. HSA funds can't be used for DPC monthly fees - those are out of pocket costs. You can pay service fees (for services over and above what's provided by regular DPC services) with HSA. However, you can't get money IN TO an HSA without also having a high-deductible insurance plan.

You can say the HD plan is for catastrophic situations, with DPC being day to day, but for most folks I know, especially with families, the HD plan on its own has extremely high costs, and saying "let's also subscribe to a DPC service to keep our costs down!" makes 0 sense for almost all of them.

DPC alone won't deal with "crap, I just got cancer and need $180k of treatment". "regular" insurance can deal with that, but it's still extremely expensive.

Maybe I'm missing something in what you're trying to say.

Okay, that's valid.

Here is the thing: Catastrophic health events are not determined by some random number generator that says "Tag! You're it! We decided to fuck with you today!" Study after study after study shows that diet, lifestyle and preventive care (or lack thereof) correlate strongly with whether or not someone winds up with a catastrophic health event. This includes cancer.

One of the ways DPC lowers costs is by helping patients stay on top of health maintenance so health problems do not escalate. For example, patients with well managed diabetes can live long, healthy lives with few complications. Patients with poorly managed diabetes see high rates of blindess, foot amputations and other horrifying, expense, life altering health complications due to diabetes.

Does that make any more sense?

Only about 40% of cancer can be controlled by our behavior. The rest are indeed random and unpredictable. Its healthy to see ourselves in control of our lives. But at some point it becomes unrealistic, or victim-blaming, or just denial.

I am the wrong person to tell that to. But, you know, the masses will agree with you and when I try tell my true story of overcoming a medical death sentence by changing my diet and lifestyle, every asshole within three million miles piles on to kick the shit out of me and accuse me of being insane, often while mods in various forums largely side with the lynch mob, say it is my fault I am having the shit kicked out of me and turn a deaf ear to the idea that "no personal attacks" should apply equally as much to me as it does to any other member.

So, since I am absolutely sure this is not a discussion that can be had in good faith at all, you just keep on believing whatever you want to believe. Don't let me confuse you with the facts.

I'm happy for you. But a personal story is not data.

And the persecution complex is probably not working out very well I imagine.

I don't have a persecution complex. Thanks so very much for hypocritically victim blaming right after telling me it is a bad thing to do to other people. Your reply is dismissive and totally in line with every shitty thing ever said to me on the subject and in no way makes good faith discussion a viable option.

There are different kinds of catastrophic health events. A heart attack or stroke is preventable. Dropping an engine on my arm or breaking an ankle while hiking is very much determined by a random number generator, unless if I spend my whole life sitting in front of a computer. In which case I'm going to die from a heart attack or stroke from lack of exercise.

I paid accident claims for over five years. The absolutely "Fuck you, you were in the wrong place at the wrong time" totally random stuff was a shockingly tiny proportion of the claims I paid. The vast majority were either 1) accident waiting to happen because people are irresponsible asshats or 2) people who knew how to work the system and wanted to milk their insurance for all it was worth.

And the thing I found hardest to swallow about that job was that many of the totally random, shit happens claims from good people not milking their policy for money got damn little money out of us. It seemed incredibly, horribly unjust to me.

On basis do you assert that $5,520 is ridiculously expensive? What price would not be ridiculous? What makes the cited plan decent and the other lower-premium options not decent?

Healthcare in the States is ridiculously expensive to everywhere else on the planet.

Sure but that's a separate and much more complex issue. The original question was about a practical matter of insurance, not reforming the whole US healthcare system.

How about on the basis that comparable plans cost about 1/3rd that before the ACA?

Only for those without pre-existing conditions or other major risk factors. For them, comparable plans cost about 3 times as much, or weren't available at all.

Also the plan that you claim was comparable before the ACA was probably not comparable at all because it had a lifetime coverage cap. So it was objectively worse because if you got a serious and expensive medical condition you would have been cut off at some point.

> Only for those without pre-existing conditions

I have a pretty expensive PEC and my state had a high risk pool that was much less expensive than what I pay now. (To be clear, I think the preexisting condition exclusion ban is wonderful, just adding a data point to the conversation)

It was actually objectively better because the deductible was about 1/5th, so We'd actually hit and get some value back.

I don't think you understand how insurance works. What do you think would have happened to you if you got a serious chronic medical condition and exceeded your lifetime coverage limit on the old (pre ACA) policy?


There are no serious chronic medical conditions in my family and the ACA has been a lifesaver for us, the only reason we were able to start our last company. That's because before the ACA, no individual health insurance plans were available to our family at any cost, due to "do-not-cover" lists (for instance: our daughter, now a teenager, had an unexplained seizure when she was 4 years old). There were millions of families in the same situation.

Further: as an employer, I'm aware that what I pay for an ACA silver plan is ballpark comparable to what we paid as employers for family coverage in our small group plan. The ACA plan is more expensive, but nothing resembling twice as expensive.

The ACA has not been a disaster for individual entrepreneurs. It has been anything but.

In California, for an individual, the ACA is minimally 3 times as much, for substantially less coverage.

Pre-ACA, we paid $400 a month for $2000 deductible PPO plan. We now pay $1200 a month for $12,000 deductible PPO, and had to switch doctors.

Go check the numbers for a bronze plan (for 3) for yourself: http://www.coveredca.com/

It is ridiculous is to say a good solution to pre-existing conditions and "do-not-cover-lists" is raising rates and deductibles 3x. It is grossly wasteful, inefficient, expensive solution.

What year, how many people, and what provider? We insured California employees and I have some idea of how much we paid to do it.

For instance: are you comparing individual market PPO premiums from 2009 to 2016 ACA individual market PPOs? That 2009 PPO didn't have guaranteed-issue, meaning that your insurer got to cherry pick you out of the population. Your number is a more accurate comparison if it's from the small group marketplace (where we had to buy insurance from), because small group coverage had guaranteed issue.

Also worth mentioning: California premiums had double digit growth in 2009 and 2010, both prior to ACA.

2 adults, 1 child. In 2012 we bought Blue Cross PPO, $2,000 deductible, $400. As ACA approached it crept up a bit, but was still in the $400 range, deductible might have gone to $2500. First year of ACA it jumped to $800, and has gone up quickly since.

Besides the crazy rate hikes, and the massive deductible, it has been constant chaos in terms of plans and doctors. Under ACA we stayed with Blue Cross in year one, then had to switch doctors because they dropped Blue Cross, then Blue Cross dropped their ACA PPO, so we switched to Health Net, then Health Net dropped out of the CoveredCA. Every year december is a time of dread as we wait to see if our plan is changing, going up in price, if our doctors are still going to take insurance. We are thankfully all healthy, but it has created a huge stressor where there was none before.

Did you buy your Anthem PPO on the individual market, or through a small group insurer along with your peers in a startup? Again: the California individual PPO marketplace wasn't community-rated and didn't have guaranteed issue; you would be making an apples/oranges comparison to ACA. The small group market, on the other hand, had many (but not all) of ACA's regulatory changes already, and it had been seeing double digit premium growth for a decade.

It's not interesting to look at the individual marketplace pre-ACA, because insurers had so many tools to avoid providing benefits to claimants: they could not only simply refuse to provide insurance for anyone associated with a very long list of "conditions", but also had recission powers to retroactively refuse coverage, and had both annual and lifetime coverage caps to minimize their liability to consumers.

It's worth noting that in some states, my own state of Illinois included, the crappy pre-ACA individual market still exists: you can buy a non-ACA-compliant individual market plan, for less money than is offered on the exchange. Of course, you're subjecting yourself to 2009 insurance market norms by doing so.

I disagree with almost every assertion you are making, and I'm not sure I have the time or energy to respond anymore. But let me just say this, the individual market pre-ACA had choice, offered real value, was cheaper, had lower deductibles, and had more doctor choice. So if 3x price increase and huge deductibles was somehow still a net in for you, congrats, but it came at a huge price for a lot of other people, and I'll celebrate the upcoming repeal of the ACA.

It did none of those things. It was cheaper and had lower deductibles for young families with practically no prior exposure to the health system. But if you were older, or were a woman who had ever seen a reproductive health specialist, or had at any point in your past had an unexplained seizure, or had reported any of a constellation of 10 different symptoms predictive of a future diabetic condition (and so and so forth), the California individual market provided literally no value at all, because you were locked out of it: insurance wasn't available to you outside the group market at any price.

It's easy for insurers to provide incredibly cheap premiums when they can exclude broad classes of customers on the suspicion that they will in the future make claims.

It's also easy for insurers to provide incredibly cheap premiums when they can quietly impose low annual and lifetime caps on coverage, which they could and did before the ACA.

It's also easy for insurers to provide those cheap premiums when they can re-evaluate your coverage and rescind it retroactively when you're diagnosed with a chronic condition, which they could and did before the ACA.

My point is simple: you're not comparing apples and oranges. You need to compare the small group market to the post-ACA individual market if you want to compare like with like. The system you're comparing it to now was exploiting consumers; you were a beneficiary of it, I agree, but your benefits came at others expense.

More importantly, though, outside the moral dimension: as soon as you got your company off the ground and had to begin providing for employees, you'd have found yourself in the same situation you are now: with annual double digit increases in premiums. Because that's where most of us were prior to the ACA.

One thing I wonder about ACA: it seems like the young/healthy who bought their own insurance have had their premiums go way up compared to before (and also they are penalized if they don't buy insurance, so presumably more of them buy it now), and I haven't heard about any large groups of people whose premiums went down.

So, more money is going into the system than before. Where is the extra money going? Here are the possibilities I can think of:

- Better health outcomes for the previously uninsured or uninsurable. This would be the case if the previously uninsured just didn't get useful medical care before ACA, and now they do. In this case we might see longer life expectancy, increased happiness, or some other improved health care outcome.

- Less money out of the pockets of the previously uninsured. This would be the case if the previously uninsured used to get the medical care they needed anyway, but had to pay a lot for it. In this case we might see, for example, fewer medical bankruptcies.

- More profits for insurance companies or medical service providers. This could be the case if providers were directly or indirectly subsidizing the previously uninsured when they couldn't pay their bills. (If this is true I'm assuming they didn't simply pass the costs on to the previously insured, because that should have resulted in a lot of people's premiums going down after ACA, and apparently that didn't happen.)

Do you have a sense of whether these things have happened, or do you expect them to happen in the future? Or maybe I missed some other possibility.

You're missing that for a very large collection of new insureds, premiums did go down, from Inf to hundreds of dollars. "The ACA" doesn't charge premiums; insurers do. They increase premiums when actuarial values change. The ACA did two big things to change those values:

* It introduced tens of millions of formerly uninsured people to the system; if you were previously uninsured, you're also more likely to be costly to insure (there's a correlation between being stably employed and being healthy, for instance, and the stably employed have always tended to have insurance)

* It required insurers to cover without caps or recission and for policies to have minimal actuarial value to customers, all of which were levers that insurers used to lower premiums in exchange for reduced service to customers.

To believe that ACA red tape was a primary driver for increased premiums, you have to ignore the ratio of money insurers spend on medical costs versus administrative overhead, which is reported annually. It's hard to see how anything in the ACA could have driven up the cost of an doctors visit or an MRI. And yet that's where the expense is growing: to wit, more people are getting more procedures now that they have coverage.

Yes, I understand those points, and I tried to make that clear in my comment, but I guess I failed. More people are insured now, against more risks. I get it.

My question is, now that we as a society are paying for these extra services (expanded risk pool and reducing the ability of insurers to deny coverage), what is the economic benefit that we expect to get as a result, and have we seen evidence of it yet? I hypothesized three possible benefits, and was wondering which one you expect to see, or if you think we've seen it already.

To be clear, this is not an effort to prove that ACA was ineffective. And I didn't say anything about red tape. I'm just trying to understand the economics of the situation, to have a framework for thinking about it beyond "more people have (useful) insurance now."

Edit: thinking about it more, I feel like my comment may come off as demanding that you prove the value of the ACA in some objective sense, especially given the thread it is attached to. Sorry if that is the case. I am mostly just trying to understand the mechanisms by which broadening health insurance access improves society. If the answer for you is just "now my family and others like it don't have to live in fear of getting sick" then I don't mean to imply that that is an inadequate reason to be happy about the ACA.

I can't reply to your comment, so I guess I have to do it here. I feel like you are just listing reasons why having health insurance is good. I know all those reasons. That's not the question I was asking. But I think I probably attached this question to the wrong thread, or have made some other error, because we appear to be talking past each other.

Edit to respond to your comment: Yes, maybe it is a dumb question! I don't know.

It sounds like your answer to my question is a combination of:

(a) denying my premise that we are actually paying more in aggregate for healthcare by saying we were paying for it before with higher service costs. So I guess you believe that the total amount paid for everyone's insurance premiums would have risen just as fast (or faster because of costly emergency room visits) without ACA as they did with it in order to continue covering those hidden costs that are now explicit.

(b) fewer medical bankruptcies

Is the answer to your original question just really simple? It might just be: fewer ER visits and fewer medical bankruptcies, both of which were rampant and quietly increasing costs for everyone prior to ACA. The "extra money in the system" is money that was previously being paid surreptitiously in the form of higher costs for services for everyone.

For the many millions of people who are insured today thanks primarily to the ACA, the economic impact includes:

* Access to preventative care that keeps them out of the ER, where the expense of their care is maximized

* Financial contribution to their care, rather than the previous expectation that they would simply default on gigantic medical bills or go bankrupt, in either case leaving everyone else in the market to absorb their costs

* The availability of guaranteed-issue insurance on the individual market reduces job-lock and, for us in particular, makes it possible to start companies without worrying about how to secure insurance for our families. Health insurance has been a top 5 issue for the founders I've talked to about it (obviously, myself included).

The thing you need to remember about risk pools and denial of coverage is that health insurers can't deny health services to people, only insurance coverage. For a variety of reasons, including the fact that insurers have collusive secret pricing deals with health care chains, but also the fact that acute health care is just crazy expensive to provide, almost anyone who doesn't have insurance will simply be bankrupted by medical events without coverage. When that happens, it's not like we don't pay for it; it's just that our insurance companies get to dodge a bullet that we collectively have to take for them.

I'll throw another anecdote in there. The small consulting company I worked for up until 2014 switched over to reimbursing us for a portion of what we paid for an ACA plan. Before that we had a (very small) group policy that was incredibly expensive because of health problems that one person had. The ACA saved thousands of dollars in that case (without subsidies) just by having access to a larger risk pool.

I've heard people complain about ACA wrt to small business but it's always very vague general terms whereas the specific cases I know about were all positive.

Look at the data then - ACA plans are going up 22% in just this year. And that doesn't account for the skyrocketing deductibles that effectively make the plans worthless except for catastrophic illness. It may have bailed out a some people with pre-existing conditions, but in totality, it isn't a money saver, it is crushing people that have to buy individual plans, and that's not an anecdote, it is clear from the data on the cost of plans.


Non-ACA plans went up by a comparable amount in the years just prior to ACA; that was one of the reasons the ACA had the urgency it did at the time.

Our Non-HDHP non-HSA-qualifying premiums today are more expensive, but not nearly twice as expensive, as the small group market was in 2009. But the trajectory we were on prior to the ACA was double-digit annual premium increases, so it's tough to say how much of that is ACA.

Remember also that these "regulations" we're talking about are primarily things like actuarial value, spending caps, community rating, and guaranteed issue. That's not red tape!

Obviously, if you're 25 years old and buying insurance, the ACA is not a particularly great value to you (unless you have a "pre-existing condition", which I'll remind you there's no due process for adjudicating --- an unexplained seizure 10 years ago is a "do-not-cover" pre-ex). But that's part of the point!

2 points. First, yes, plans started to go up before ACA, in anticipation of ACA. Second, when a plan went up 20% in 2012, it might have been an $80 hike. Now in 2017 when it goes up 20% it is an extra $240 a month. So even if the rate of increase is similar, the pain it causes is not, especially contrasted with stagnant wages.

No, I'm sorry, but that's simply not true. Plans were going up for years. In almost a third of all years in the ten years prior to ACA, California saw double digit growth in its guaranteed-issue small group market.

Also, there's no mechanism by which plans go up by double digits "in anticipation of" the ACA.

"Plans were going up for years" - yes, but not as much they went up after ACA.

"[a]cross all states, from before the reform to the first half of 2014, enrollment-weighted premiums in the individual health insurance market increased by 24.4 percent beyond what they would have had they simply followed state-level seasonally adjusted trends.”

And the rate increase is 49% if you don't weight enrollment, which is a better indicator of individual impact.


Again, you're comparing the pre-ACA California individual insurance market, in which insurers could (and actively did) simply refuse coverage to anyone they might have to provide services to, to the post-ACA California individual insurance market in which they couldn't.

The correct comparison is to the California small group market, which prior to the ACA also had guaranteed issue. The small group market covered companies with low single digit numbers of employees and approximates the ACA individual market (less the adverse selection of people without benefits-providing employers). In that market, the price trends before and after the ACA are broadly comparable.

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