Don Havey

Today I published my craigslist Monitor on Google Gadgets. I’ve been using it for a while and it is damn helpful. And now I’m sharing with everyone else, because all of the other craigslist monitoring gadgets are just plain bad.

It’s perfect for freelancers, apartment hunters, and full-time job seekers. Just choose the craigslist pages/sections you’d like to monitor and it will handle the rest… including automatic highlighting of all new postings (that’s why everything will appear highlighted when you add it; next time you refresh it the highlighting will go away until a new listing is loaded). Add it to your iGoogle homepage today!

There are a million articles on the web about finding health insurance as an individual and/or freelancer. But I’m writing another. Here’s my reasoning: when I was researching the subject I wanted to know the math, which no one seems to be considering. Maybe you’ll want to know the math too. Or maybe someone will graciously correct my math and change my opinion on the matter.

Some of the many problems

Health insurance in the U.S. is an amazing problem. Oddly, while looking at the issue from my perspective, I always feel a bit serene. It’s the mixture of impossibility and inevitability that does it. Like the look of an animal in a trap after they tire, calm down, and accept their circumstances.

Let’s be fair to the insurance providers and first disclose the problems with a market-driven health care system.

The cards are always stacked against insurance providers in such a system for this reason: people don’t want insurance (of any type) unless there’s a good possibility that they’ll need it. The insurance industry has historically used this excuse as a crutch while justifying their rather unscrupulous practices. They will always be insuring the highest-risk, highest-payout cases. This is true.

Now the problems that the consumer faces, specific to the health insurance industry:

1. Rates are not determined on a sliding scale, which, though beneficial to those with long-term health problems, means that those of us who will visit the doctor’s office only once a year, are paying an insane amount to do so.
2. Insurance companies market high-deductible, low-maximum plans to low income individuals and families, providing them with a sense of security, while in actuality the family is hardly covered in the case of catastrophic medical bills, and is simultaneously required to pay entirely out of pocket for small bills.
3. Low deductible plans, which are not subsidized for self-employed individuals, very rarely pay off and come with a price tag that would make an investment banker blush.

I’m going to give you some math now. But first, I’ll direct you to the Wikipedia article that discusses other countries’ insurance solutions. Needless to say, they are all more effective than the current U.S. system, and prove that solving the health insurance problem is not impossible. The Netherlands solution is particularly promising.

And also, a disclaimer, compliments of your mother: It is not wise to “play the odds” when you’re gambling with your life. Because you only get one. That said, I’m of the opinion that taking a little risk may actually greatly improve the one life you have, be it with or without health insurance.

Here’s the math for the two major types of plans available to me in Portland, ME (no Freelancers Union coverage up here):

Angel’s plan

Angel is on a plan that is fully covered by her employer (bless them). Of course, she’s not getting it for free. If she were paying for the coverage herself, we can assume that she’d be making a bit more of a salary.

Angel’s plan equates to ~$900/mo if I were to purchase it as an individual. It is a relatively low deductible plan (used to be $500, now $1000), and covers quite a bit, but not nearly everything. The numbers are:

$1000 yearly deductible
$900/mo = $10,800/yr
$2500 yearly maximum out of pocket ($1500 plus the deductible)
70% on most inpatient coverage until the maximum out of pocket is reached, then unlimited
Some prescription coverage, decent referral/specialist coverage

This one is obviously not going to pay off at this point in my life. It requires at least $11,800 per year (per goddamn year!) in medical bills to work out of the red. Additionally, if your bills make it into the above-$11,800 range, you’ll almost certainly have to dish out the remainder of the out of pocket limit, making the total $13,300. That would be a major diagnosis or a prolonged period of extremely bad luck. Think a nice big compound fracture per year.

If instead I were to invest that money in a 4% savings account, after 5 years I’d have ~$73,700. That’s almost $9000 in accumulated interest that could be put towards medical expenses… but in the case of a good, lucky, healthy life, could be used towards a child’s college education. In other words, it’s not money down the drain if you don’t use it.

High deductible plan

Now let’s look at a more typical freelancer plan. High deductible, relatively low maximum payout.

$5000 deductible
$300/mo = $3600/yr
$10,000 yearly maximum out of pocket ($5000 plus the deductible)
80% on most inpatient coverage until the maximum out of pocket is reached, then a maximum of $100,000 lifetime payout
Usually no prescription coverage, limited referral/specialist coverage

So, similarly, this one will pay off around $8600 per year, assuming that you can find the sweet spot between the deductible/fees and out of pocket limit. But what’s even worse here is the fact that it will only pay off until you hit the maximum. Good luck after that. But then again, if you’re accruing over $8,600 per year in medical bills at age 26, you’ll probably have moved to Canada by then.

Hope and conclusions

There is a glimmer of hope: tax deductions. Most medical bills and some insurance can be written off as an “above the line” deduction. Meaning that if you’re paying 30% in taxes and making more than $8,600 a year (using the example figures, after all your other deductibles), you can basically get 30% off your medical expenses. Still, that’s $6020 per year before it pays off.

Final advice: make up your own mind. If it helps to clear your conscience, get medical insurance. Maybe the lack of worrying alone will make you healthier. If you choose not to spring for coverage, look both ways before you cross the street, watch what you eat, and above all, please please please please VOTE this November for a candidate who is ready to revisit the issue of national health insurance.

Hint: not the old white one.

Still haven’t updated in a long time. Sorry.

If you’re bored, check out the new Curiobot, which now has a blog that I occasionally will be posting to.