Centerfield

At the moment, one CAN negotiate for health care as an individual. But the insurance companies, for what they say are statistically valid reasons, simply decline to write them for persons with certain pre-existing conditions. Amazingly enough, if you set up a company (or an LLC, to keep things cheap) you can get a group policy. Even if the "group" happens to consist of just you and your significant other, and does little or no actual business. Even if some (or even all) of you have said pre-existing conditions -- they don't even ask about them (and I just did it this past month, so I'm all too aware). Which probably makes the insurance companies daft, but the law isn't what's holding them back from offering coverage to individuals.

And the insurance premiums abruptly become deductible business expenses, too. (And the IRS doesn't even expect you to make a profit for the first 2-3 years -- you apparently could have nothing but insurance premium expenses that whole time.) In short, US tax rules are totally insane. But we all knew that.

Posted by: wj at July 15, 2007 01:56 AM

In January, my Cobra with Empire Blue Cross runs out. I am the President and sole officer of an S-type corporation. I've been looking for new coverage and about the only thing I can find is 20% I-pay HMOs at about $800 per month. Am I missing something? How can this be reasonable? You mention a group plan of one (including a significant other) for a reasonable rate. With who and for how much? In New York, United Healthcare, Oxford, Cigna and Empire Blue are about the only plans most doctors and medical groups take in NYC. I would love someone to direct me to the best policy or an agent in NYC that is not a total farce. Present healthcare plans screw small business and single entrepreneurs. Again, C3 or wj, information would be helpful. Google has been a bust. The same $800 plans keep coming up. And I thought my present $400 per month Cobra with dental and optical was a rip off. Now I'll miss it. Who the hell can pay $10,000 + for 80% coverage/HMO per year? Is that really reasonable?

Thanks

Max NYC.

Am I asking too much or should a secretary at IBM have a better EPO plan than a NYC contractor can even find for twice the money? Maybe the Union is calling.

One thing for Jon. I had insurance from NASE along time ago. They are based in Texas. What a complete rip off. I once had a $10,000 treatment and NASE with maximum triple surgical coverage would only pay $3000. The hospital charge alone was $2800. Being in Texas, I had no chance of suing them. My Father once said, "Beware of health plans from Texas".

Posted by: Maxtrue at July 15, 2007 11:14 AM

Kaiser in California runs $100-$300 per month, depending on age, plus another $150-$300 for a spouse -- depending on your age, not your spouses. (Note: if your spouse is significantly younger, make her a 1% partner in the business and get your coverage as her dependent, rather than vis versa!) Blue Cross was rather more.

It's steep, and it's only a safety net in case of disaster. But the cost for an individual is substantially worse -- plus as an individual I am, apparently, uninsurable.

Posted by: wj at July 15, 2007 01:57 PM

That'd mean that the tens (hundreds?) of millions of patients unhappy of Blue Cross / Blue Shield

Though I agree with your point, Jon, let me point out that BC/BS is not one company. It's a franchise organization of dozens of independent insurers. Your BC/BS isn't the same company as my BCBS, though the franchise connects deep into the federal government via Medicare administrtion and the FEHBP, making it the 800-lb gorilla brute squad of health insurance.

$400 per month Cobra with dental and optical

I wish.

Posted by: Tully at July 15, 2007 02:01 PM

There is a lot of competition between health care plans. Its just that its competition for the large and medium-sized employer groups, not individuals.

Remember it IS insurance and not a pre-payment plan. Insurance is all about risk. And apart from selection (i.e. not getting an individual policy because you have a prior history of cancner) spreading the risk out among a larger group of individual is the best way to fiscally plan for the individual catastrophe. So for an individual seeking insurance you will end up paying a lot and still have high deductables and co-pays.

Max, I don't know the New York market well. However, any insurance in the New York area will likely be more expensive than say Omaha because of the high cost of health care in New York. AS for health plans "screwing" small business I think it has more to do with "spreading out the risk" and also spending more marketing time on the bigger business (and the bigger bucks). The $800/month seems high. Though if you do the math that's less than $10,000/year. If you go into the hospital for 4-5 days you'll hit that mark. Check out the blog Insureblog. They've had many discussions regarding these issues.

Posted by: c3 at July 15, 2007 10:09 PM

Thanks, and Tully's remark is so true. At $400 per month I didn't really know how good I had it for the last three years (which was 365 the first year). The plan nurses get is quite good. It almost makes up for the terrible strain they have in NYC hospitals where the attrition rate for nurses is about 60%. There are low cost supplimental plans for dental and eye services. I still have a few months to research and fortunately, I have no pre-existing conditions of merit. I guess I shouldn't bitch. I went 15 years without a medical at one point. Knock on wood, but I just don't get sick. I thank my parents for the genes. I will check into the group plans, but I thought you needed at least three employees. It is quite amazing that without being an owner of an LLC or a corporation, there is little for an individual.

Thanks wj and C3. I will follow up. It still would be nice if small businesses could form pools more easily and approach what is normal for most larger corporations.

Yes, $800 is $9600 per year. My accountant said I couldn't deduct that cost from my corproate taxes, but I could take part of it from my income tax deductions. Perhaps some redress lies in those tax deductions.

Posted by: Maxtrue at July 16, 2007 08:52 AM

Who wants the "right' to negotiate as individual? not toomany folks. What we need is for everyday folks to form groups to increase bargaining power, so that folks unfortunate enough to be unaffiliated with big employer groups and so on don't face rates that make rolling the dice attractive or even necessary.

The gross disparities in what folks are required to pay is a substantial part of the "problem" from the point of view of consumers, although as Tully would point out, addressing it would not resolve the limited supply/unlimited demand problem.

I'm for trying a single payer format in which all or most folks must enroll and all or most pay comarpable costs. And I'm for adressing the costs of pharmaceuticals head on right now. If Big Pharma is resistant to things like pat's suggestion that we pat no more than say the average of costs set by other big modern nations, then I see no reason not to move forward immediately with plans to establish a government or chartably run organization devoted to producing all drugs whose patents have expired and then selling them AT COST to all americans.

Posted by: bk at July 17, 2007 02:37 PM

I'm waiting for some one to explain to me why Brian's thinking is wrong. Small business should be able to form groups State by State and obtain the same bargining power larger corporations have. I would add that a single enrollment doesn't mean government run healthcare. As far as low supply, more nurse practioners, outsourcing are just two examples to raise supply. While I firmly believe doctors and nurses have the right to make a living, healthcare isn't exactly like contracting. We would be shocked if we learned fire fighters make decisions based on how much profit their labor can make for shareholders. Small business provides many more consumers to insurance companies than the combined employees of IBM, Con Ed and Sears in the State of NY.

Posted by: Maxtrue at July 17, 2007 04:15 PM

Well, I am down with the idea of more creation of bargaining groups and thereby more access to bargainiung power for =more individuals. But I'm not convinced that we ought to stick with the historical artifact of access to healthcare (and group bargaining power) via employment.

Quite possibly, some or even many small businesses are happy not to be involved with providing healthcare access to their employees. Fundamentally, there doesn't seem to be anything wrong with the idea that employers ought to simply compensate their employees fairly and leave the healthcare decisions up to their employees.

We're where we are with that due to a haphazard process of historical evolution, and having employers provide healthcare is something that has been around long enough to accumulate the force of tradition. Many folks expect it, and very few question it.

Here's the thing...it's not really free, or subsidized by your employer. That's a pretense. Businesses must figure total compensation because that's the real per-employee labor cost figure that matters to a business. Now, I think the pretense is proving that it's outlived its usefulness. The main reason (or one of the biggest anyway) we have not dealt with unsustainable growth of healthcare costs is that the pretense described above shelters so many folks from the realization that they themselves are really paying the cost themselves as part of overall compensation. If you pay $400 pwer month for you and your wife and thwe company kicks in the other 2/3 or whatever, that's $1200 bucks that could have gone into your pocket but didn't go in your pocket.So the next time someone out there gets a 1.6% or 2.3% raise, PLEASE take the time to notice that the crappy raise bone is connected to the healthcare cost bone.

Employer-"subsidized" healthcare is the main source of the inertia that allows enough of us to feel sheltered from the pain that we can afford to think it's not that big a problem at least for us, even though it may be for others. But the astounding tolerance for big annual cost increases that has resulted is really coming to a head now...it's getting way too costly for anyone to hide from it. Your "share" or emploee contribution continues to grow. Your localities budget strains at the seams due to the combined costs of heaklthcare to current employees and poorly funded retiree benefits.

Posted by: bk at July 17, 2007 09:45 PM

Good points Brian. First, we ought to let the self-employed and small businesses set up blocks that at least come closer to corporate coverage. We must stream line the system to let efficiency reduce some costs, we need better hammers for negligence and pharmo costs, we need to increase supply of product and services, we need to let preventitive steps reduse larger costs later. I still think there is a way to get the present system working better than to let government provide medical services. In the meantime, it is a bit crazy to make an owner of a small business and his/her staff pay far more than a secretary at IBM. It should not be the case that only the very rich and the very poor get reasonable insurance while the Middle Class get screwed.

You are right that employer supplied healthcare isn't some kind of final solution. I know of cases where employees are asked to pay more or get less. Rising costs (mostly from the uninsured) will get all of us in the end. Those with great coverage often use it more than others, while those with none end up in emergency rooms.

Posted by: Maxtrue at July 18, 2007 03:20 PM

Small groups have "banded together" to increase bargaining power. State laws vary. It's still expensive. Looks at Mass. experiment. They struggled to get a plan for those who couldn't get it for under $300. They succeeded by putting together a bare-bones plan with a lesser state mandate burden. Bottom line: health care is not cheap. We're all searching for where the cost can be shifted. Either we reduce costs or increase revenue (read "taxes")

Posted by: c3 at July 19, 2007 01:23 AM

I was pleased to learn Business Medical insurance plans in NYC can start with just two (spouse can be made a part time employee to qualify). GHI, Oxford, Empire, Healthnet, UnitedHealth all have good business plans around four hundred per month. For an additional $75 one can get decent dental and optical. An agent laughed and told me it IS impossible to get single self-employed coverage for under $800 that is similar to EPOs. Wj apporach is quite right, but I am told insurance may want W-2 for employee and at least 20 hours per week, so the question becomes how much in employee taxes will one lose to add a wife or husband in order to bring insurance down to $400 each for both partners? Perhaps C3 might comment on what insurers demand as proof of second employee and how much one must pay said employee per year to qualify as an employee. I will compare that with what the account says....LOL. Free lancers seem screwed.

Thanks for the comments....

Posted by: Maxtrue at July 19, 2007 11:01 PM

Perhaps C3 might comment on what insurers demand as proof of second employee and how much one must pay said employee per year to qualify as an employee

Insurers work very hard to make sure there's not another insurer that would primary. "If someone else was going to pay the bill, wouldn't you want to know?". As for the second question, that's really up to the emplyer, I believe. Posted by: c3 at July 20, 2007 08:23 PM