Friday, June 22, 2007

Not getting health insurance is a really bad idea

Seriously. If you can possibly afford insurance, then there's no excuse for not having it. I'm especially thinking of young people doing a startup and not buying insurance in order to "save money". That's a really dumb optimization, and suggests that you aren't very good at making trade-offs. A quick search shows that in California you can get a decent plan for $77/month. If you can't find $77/month, then maybe you aren't ready to do a startup.

I'm reminded of this issue right now because I just passed someone in SF laying face down on the pavement, not moving. His bicycle was nearby and I'm guessing that he had just been hit by a car. I hope that he does ok, but it didn't look good. (people were already helping him, and the police were just a few cars back, so I didn't stop)

Even if you are young and healthy, bad things can still happen. My brother was perfectly healthy until he got cancer at age 33. When my daughter was in the hospital, it cost $12,000/day -- she was there for almost 3 months.

The simple fact is that the health care system in the US isn't setup for people who don't have insurance. If something bad happens, you don't want to be one of those people. I'm not looking to debate our system, so please don't bother. Right now, the system is the way it is.

My point is simple: Do what you can to get insurance. Now.

15 comments:

awt said...

Your advice is all well and good unless you've had previous health issues and companies such as blue cross will no longer accept you.

Moe said...

you're a good man..

Mike said...

Sound advice. This is a very important issue and it's nice to see it being discussed more now.

Jay said...

That's all well and good if you're in your mid 20s and can get that $77 plan. (Which, by the way, I find suspicous.) Being in my 30s and looking for health insurance I find its difficult finding anything for less than $500 a month. Big difference between $77 and $500. I'd even go for a high deductable, but the insurance companies don't tend to offer a variety of plans.

Further, with the vast majority of plans I've looked at-- they don't really cover what they used to. I worked for an insurance agency in the mid 1980s and read plans back then-- other than raising prices, they have made their coverage exceptions very broad, and so "insurance" today is not like insurance before.

And so, I suspect that $77 insurance isn't going to cover very much (though I haven't read their policy because they don't offer their product in my state.)

Government regulation has created this mess by causing prices to be absurd and preventing people from getting good prices for coverage, necessitating insurance in the first place.

So, while the liberals blame capitalism for causing people to be uninsured and you say everyone should be insured, I am compelled to point out that socialism has driven up insurance costs to the point where many people can't afford insurance, even middle class people starting a startup in their mid 30s.

I'd love to find a cost effective policy in the $100-$200 range, I'd even take a large deductible because I have plenty of cash on hand.... but the options don't seem to be out there.

Paul Buchheit said...

Awt and Jay,

I agree that there are problems for many people, but as I said from the start, my point is that anyone who CAN get insurance SHOULD get it.

awt said...

Your post scared me enough that I've re-applied at some other places :)

Learnbook said...

maybe europe is not so bad after all - at least when it comes to health care.

Nathan said...

If you're doing a start-up in California and you have at least one other person working with you full time, sign your company up for a small-group health plan. I started a company that currently has two employees other than myself, and the three of us have a high-deductible small group health insurance plan that has good coverage once the $3000 deductible has been reached. The monthly premium for me, a male in my early 30s, is around $200 per month. The premium for my coworker who is in his 20s is around $150/month.

Unless you have no possible way to get group health coverage, don't even bother trying to get an individual health plan. Unless you have never had any health problems at all you will find yourself being turned down. My experience is that insurance companies like Blue Shield will not just quote you a higher rate due to your health history -- they will refuse to cover you at all as an individual, and this is for relatively minor health issues in the past (not HIV or cancer or anything ongoing and serious).

As I understand it, in California there are insurance regulations that require insurers to accept qualifying groups regardless of the health history of the members. If one of the group members has been uninsured recently the insurer may have some sort of restriction on covering that member's preexisting condition, but the group won't be turned down for coverage.

Nathan Braun said...

"I'm not looking to debate our system, so please don't bother. Right now, the system is the way it is."

But What if you have ethical objections to investing in the US health care-military-industrial complex? :)

Norman Rasmussen said...

I'd be interested in a follow up post after you've seen SiCKO.

sergio@yourstudio.org said...

hi yea i'm 23 can't afford Health Insurance... I value your advise considering your like one of my heroes for creating gmail + other revolutionary apps. I recently fell off my bike almost onto ongoing traffic... luckily i ended up with just a scared arm and shoulder... but i know it could have ended up much worse. The reason for my crash was due to the fact that my buddy and I decided to be dorks and modify my bike by soldering a long pipe to the front wheel to make it look like a harley (trying to impress the ladies)... so this pipe snapped and almost went through me as i fell face first onto the pavement... Anyway, it was an act of the gods that I didn't have to go to the hospital considering i could never pay for any bills like the $12,000 for your daughter with a minimum wage job at a library... Maybe the god of bikes was giving me a sign and warning me about my dumb decision... Well whether a bike god or internet god warns me of "bad ideas" in not getting health insurance....I will at least try to stay consistent in bad decisions... i read somewhere that "bad ideas" are often the best.

Jabo said...

Very good point. I'm thinking the same thing myself. I'm 26, just canceled my insurance because it was ridiculously expensive. I basically never see a doctor and only want insurance in case of the emergencies you mentioned.

Any other ideas aside from the $77 plan? I'm in excellent health, have NO high risk behaviors, etc.

Took your advice to heart....would love to hear any other ideas about a good plan for someone like myself.

gaggle said...

WoW, first time reader. insurance is for dumb assholes. Take your $77 a month put that into a bank account, if you have a family of 4 that would be 308 a month and about 3700 a year. not lets just say that you earn a basic 5% interest compounded with an additional 3700 every year. You could easily save up to 50k in 10 years. I'm sure that could cover most medical expenses. Your parents could cover you as you build you health savings. anyway whatever

Davorin said...

not to say that croatian health care is fantastic, far from it. but here everybody has health insurance (and in most european countries). it's paid through taxes. it's what you call solidarity. it's not someone's fault they're not healthy. health is a right, not a privilege.

in america health is a good business, nothing more.

randyedmonds said...

@gaggle No offense, but as a father of a family of five, you must either be very young (like 15) or very dumb. Your idea of saving up money until you could afford to pay for health care would be like not spending the money for a safety net while learning to perform a trapeze act with the thought in mind that once you learned to perform the act you could make money charging people to watch you perform the act and thus more easily afford to buy the net. ..... I would suggest get a very high deductable Health Savings Plan. This would be a more "grown up" thing to do what you suggested.