Self Insuring Rather than Paying Health Insurance Rates

We felt the same way a couple of years back. It's really hard because it feels like you're just burning money....however, you have to make sure you have some type of insurance in place in case of emergencies. So, what we do is have a high deductible health plan (known as HDHP's). It costs us about $200 a month. To go along with a plan like that, we also opened a Health Savings Account at a bank. You want to shop around for the HSA because banks can pay out anywhere from 0.05% to 4%. I called around everywhere and found a bank about 30 minutes from our house that was paying 4.75%!!! That's incredible! Basically, you pay all bills from your HSA. You should definitely look into it

If I understand your question correctly you are considering having no insurance at all but just saving the money you currently spend on premiums to put towards medical bills? All it would take is one trip to the hospital (and not even a major accident or illness) to quickly wipe out $6,000. Obviously a major medical emergency could send you into bankruptcy.

Have you shopped around for other insurance plans?

Good luck,
K.

Our alternative to this was to pay for a high deductible insurance. We pay smaller rates each month, but our deductible is $ 10,000. Our premium is $500 for four month for myself and two children (the hubby's work pays for his). We have found this to be a better plan because we have catastrophic coverage if something horrible should happen (like cancer or a car wreck). And although most visits come out of pocket, we pay the cheaper insurance negotiated rates. Immunizations for my kids are covered, so a well check usually costs us $100. The math worked out for us. We have been with two different companies and with both we have had to just be very aware of what is covered and what is not. We read everything and monitor it all closely. It's worked well for us and saved us money.

I can't answer the question for you, but I can share my personal experiences in case it helps you figure out what's best for your family.

We've always been lucky to work for companies that offered relatively low-cost, very comprehensive health insurance. I believe we've had a $1500/year family deductible and then put the same into a HSA to cover copays on office visits, medications, etc.

When our second child was 7 weeks old, I found a small nodule on my collarbone. My OB/GYN wasn't concerned but wanted me to follow-up in a week. My Family Practitioner was suspicious (not concerned) and had me schedule a biopsy. 3.5 weeks later, I was diagnosed with Stage IIA Hodgkins Lymphoma (cancer). I had NO symptoms other than this small (about the size of a frozen pea) nodule.

It's been almost 3 years. I was on a standard chemo regimen of older, less expensive medications that cost $2000 every 2 weeks (X12 treatments). Between PET/CT scans ($14K each time), a bone marrow biopsy ($4600), etc., chemo, office visits, etc., I've likely racked-up a few hundred thousand dollars in Medical Expenses ($200,000.00 +), and I'm nowhere near being done with scans, follow-up appointments, etc.

Had we not had the comprehensive insurance we did, we'd be in financial trouble despite very good paying jobs at the time.

I'd hope no one would ever have to experience what our family has, but I'd hope you'd prepare in the event the unexpected may happen.

Best wishes.

Some employers have a plan in which you can put in before tax money that is to be used for health care costs. It's called a Health Savings Account and is administered by a health insurance company. You do not pay taxes on this money. You receive a credit card to use to pay medical bills or you can submit bills for reimbursement.

Whether or not this would be cost effective depends on how often you'll need medical care and what medications you take and their cost. I suggest that you add up the cost of health care for the past year before making a decision. My daughter's insurance coverage also has a high deductible but it does cover well baby visits as well as some other routine costs. It also pays a small amount on some prescriptions. Be sure to include all costs, even those that you may take for granted.

I also suggest that you'll want a major medical insurance plan in addition to this. One surgery could wipe out the $6000. Many major health care costs cannot be anticipated. My daughter was healthy and then she had to have her gall bladder removed. Her daughter has asthma and one year the allergist prescribed a medication that cost $200/month. I was without prescription coverage and discovered that 2 of my prescriptions were $350/month. If my granddaughter and I were in the same family there would go the $500 and then some.