Why You Need Health Insurance

May 5, 2010

Why do you need health insurance?  Because I’m a goddamn horror writer as well as a former paralegal specializing in personal injury, and I can envision all the nasty shit that can happen to you.

Every once in a while, someone in the publishing industry steps in it — as we all are prone to do by virtue of being human.  Writers, most of whom I have found to be wonderfully generous people, have inevitably stepped up to help their own by launching fundraising drives to pay for their fellow’s medical bills.  I certainly admire and support them.  The latest victim of life is writer Steve Perry, inventor of the Thundercats cartoon I enjoyed as a kid.  He has cancer, a five-year-old child, and precious little funds to take care of either.  Elizabeth Massie and Laura Anne Gilman are spearheading efforts to help him out.  I urge to you visit this link and to help out.

But back to to my rant.  I’m going to go out on a limb and assume that Steve Perry, as well as many other people I know, don’t have health insurance.  It probably has to do with the prohibitive cost of obtaining it.  Why, at my last job as a employee of someone else (i.e., see above reference to being a paralegal), our group health plan was so bad that re-upping my coverage would have swallowed half of my damn paycheck just to cover the premiums.  No wonder people chance going through life without a net.

Still, that’s all well and good until you come down with terminal cancer.  Or, let’s look at this on a more everyday level: how many people have you known who have ever been pregnant?  Do you know what my son and his mother’s medical bills totaled on the day of his birth?  Somewhere around $6,000.  That was from just one day in the hospital.  And that was probably cheap.

Not many people have that kind of money.  And believe me, hospitals can and do sue people all the time to recover what’s owed to them.  So, what can you do about it?  Get goddamn health insurance.

Now, the question is, how do you do it affordably?  So, in the interests of helping someone, I’m going to tell you how my family did it.  The laws in your state may differ a bit, so be sure to consult an insurance broker if you’re interested:

What we have is our own, individual policy with our local carrier, Anthem Blue Cross Blue Sheld.  (Anthem has a monopoly in our area, central Virginia.  I don’t know why this is not an antitrust violation, but there you have it.)  It’s called a High-Deductible Health Plan (HDHP).  Because the annual deductible is so high, $5000, our monthly premiums are quite low: currently $167.  Throw in an extra $71 for the optional maternity coverage.

Just $167.  For a family of three.  For that, everything over $5000 (incurred during just that one day of giving birth) is 100% paid for by Anthem.  And in the meantime, we get to take advantage of something called “network discounts”.  This means that, for instance, a $3000 MRI might get discounted by half, just by virtue of that health provider being in my insurance network.  The remaining half is all that I’m responsible for.

But I hear you: “$5000?!  Fuck that!”  But hear me out.

You get to spend that $5000 tax-free.  This happens regardless of whether you itemize your tax deductions (called an “above-the-line” deduction).  You funnel this money through something called a Health Savings Account, which is nothing more than a special bank account designed to piggyback onto the health policy.  Incidentally, there’s no requirement to put that much aside every year.  After all, the HSA is your own frigging bank account.  But whatever you do save there grows tax-free.  And of course you’ll have it available to pay those deductibles when they come due.

So, to summarize:

  • health insurance premium: $167 per month
  • annual deductible: $5000 per year, spent tax-free.
  • discounts on medical bills: significant

But wait (said in a used car salesman voice), there’s more!  Even that $167 per month I spend in insurance premiums is deductible because Deena and I own a small business and pay for our own health insurance.  (More info at IRS Pub. 535, page 18, the chapter about Self-Employed Health Insurance Deduction.)

So, who would you rather be:

  1. Uninsured person who could be made destitute in a single day by giving birth, being in a car accident, or by getting sick?
  2. Someone who pays $2004 per year for health insurance (tax-free if you’re self employed) and gets all of his medical bills cut in half?