When James quit his job and became self-employed, we lost our great Kaiser group health insurance plan. In the past, we had just checked a box on a form and relied on Corporate America to take care of us. Now, we were forced to predict the future as to what services we might need and determine how much we were willing to pay for them. We decided to continue on a Kaiser individual plan, drop dental insurance and buy life insurance from our current car-insurance carrier, State Farm.
The cost of health insurance deters many potential entrepreneurs (especially older ones) from even considering starting a small business. I guarantee you don’t realize how much of it is being subsidized by your company. Luckily, we are still young so rates are not as high as they could be.
First, we gave up dental insurance. After paying a lot of money out of pocket for crowns and root canals even with insurance, we decided that negotiating payment with a dentist would be a better option. We recently bought dental cleaning and exams via Groupon for $59 each, and it turned out to be a great experience. The price for my white filling without insurance was only a little more than we had previously paid WITH insurance! Unfortunately, when Baby J chipped her tooth a few months ago, we had to pay full price for an exam. However, dentists seem much more able to work with you when they don’t have to deal with insurance.
Because we have a child, we thought it prudent to get life insurance. Whereas it was previously costing us pennies, without any kind of medical exam or review, we now had to pass a blood test, BMI check and risk analysis to see what price we would qualify for. It turns out we are in great health (by their presumably low standards) and we qualified for the best price. I can see how a young person or less healthy person may decide to forgo life insurance to save money. But, with a family, we knew some things were not worth risking.
On to the thorn in our side: health insurance. When we switched over to the Kaiser Individual and Family plan, we had to review every aspect of the new plan–deductible amounts, co-pays, what is covered before the deductible and what’s not. The cost for Baby J was astronomical due to her not having had her first birthday yet. When she turned 1, Kaiser would not adjust her premium to the 1-18 rate (which is half!) until the next renewal period in a year. After several “lost” applications, refund checks in the wrong name and phone calls gobbling up our rollover minutes, we were able to get them to agree to let us apply again and not be charged the surcharge. With so many rules and regulations, especially surrounding health insurance for children, we can see why many people give up or end up with a plan they don’t understand.
Such a large part of our budget (besides rent) is now consumed by insurance: auto, renter’s, life and health. Here are some of the things we’ve discovered that might help the newly self-employed.
Read everything online carefully. Surprise-information on the Internet is not always accurate or updated. It’s better to call the company and request the most up-to-date documentation be mailed to you. For instance, the rates quoted online by Kaiser were not the right ones for our start date.
Stick with what you know. We stayed with Kaiser so we could have some semblance of continuity while changing other aspects of our life. We felt comfortable knowing how things operated. There’s no point in making your life more difficult with a confusing new plan, especially when you’re striving to make your life better.
Thank the government for COBRA, health care reform, and making some services legally free. We do need someone to protect us from the big business of health care. To transition easier, opt for COBRA, which will allow you to continue your current group plan for some time. Also, don’t be fooled by health insurance companies that seem generous by offering some services for free. This is the law.
We know some people who live without health insurance. Most of the time these are single men that don’t have anyone else to consider. Or they travel a lot and can get health care for a reasonable price abroad. For now, though, living in America as a family, we believe the cost and trouble are worth it.
Photo by Brittany G