Health insurance in the interim

Question

I'm planning to quit my job at the end of May, but that leaves a roughly 2-3 month gap before school starts. I'm kind of worried about what to do about health insurance during this period. Do schools let you get in on their health care system before the semester starts, or would I have to get health care independently, or just tough it out and pray really hard that I don't get sick? If I have to get it on my own, how much would it cost? Let's say I'll be living in the state of Illinois during that period.

Thanks in advance!

Thanks in advance!

2012dreams · Answer

the first thing you should do is move your quitting date to the first week of june, that way you have insurance for the remainder of june. schools don't typically put you on their health care plan until classes start, so most people who quit early have a gap. i don't have any words of wisdom here since i really don't care about a lapse, i go to the doctor 1-2 times a year. if you're relatively healthy, don't do anything out of the norm like drag racing or bungee jumping, most people won't have any emergencies over the 2 months they go without insurance.

milias · Answer

Ah hah! Thanks a bunch! Didn't know about the remainder of the month thing. So that's one extra month. I have a little over 2 weeks of vacation time, so I think I will be able to do it!

I'll just have to be really careful not to get sick/banged up for 2 months. Oh well, I was actually planning to do some "dangerous" stuff like traveling around the country, but I may have to cross them off the list. We'll see.

snowinTX · Answer

I personally hate going without insurance. If you are similarly risk-averse, you could consider COBRA coverage (https://www.dol.gov/ebsa/faqs/faq_consumer_cobra.HTML). By law, your company is required to extend its normal health coverage to you after you quit for a period of up to 18 months. However, you will have to pay the unsubsidized premium.

When I moved between jobs, my new company wouldn't provide me with health insurance for the first 3 months, but paid for my COBRA premiums from the old job as we agreed during the job offer process. I believe the cost was about $350/month. If you only have one month to go, it's not too bad to boot this cost and not have any lapses in your coverage.

hjf6 · Answer

I was told by my HR director that you have 90 days to retroactively purchase your COBRA. So, given you have an emergency and require insurance within 90 days of your termination date, you can retroactively purchase insurance and apply it.

conmisdosmanos · Answer

Milias, I'm going to be in the exact same boat (although I'm giving my notice the 1st of June so I'll be covered through the month). Also in Illinois. I don't mind going without, although I'd like to be covered if I end up doing an M-Trek.

I remember there was a couple of months sometime after college when my dad forced me into getting some basic coverage private thing. It was about as expensive as COBRA. I haven't decided what to do this time, but luckily I'm the insurance contact for my company, so I'm just going to covertly ask our rep what my best plan is. I'll let you guys know.

cannedmilkman · Answer

going without health insurance is REALLY risky. To the person who said they only go to the doctor once or twice per year: THAT ISN'T WHY YOU BUY HEALTH INSURANCE!

The reason you buy health insurance is in case you get in a catastrophic car wreck and are paralyzed from the neck down or discover you have a brain tumor or something terrible that will cost thousands upon thousands of dollars. Yes, there is a 99.9% chance nothing will happen and you will save a couple of hundred bucks, but there is also that 0.1% chance something catastrophic happens for some random reason like a drunk driver car accident or a freak sporting accident. Just last year a good friend of mine, a perfectly healthy 25 year old, found out she has colon cancer. Thank god she had health insurance to cover the chemo and all of her hospital visits.

Is it really worth saving a couple hundred bucks when you are risking your entire financial future (and your family's financial future, since they will undoubtedly foot the bill if you can't afford it yourself)?

Bottom line, make sure you are covered by COBRA or temporary health insurance (usually cheaper than COBRA).

2012dreams · Answer

i'll gladly take that risk. there are millions of people who live their whole lives without insurance and nothing happens to them, i can forgo this  privilege  for 1-2 months. should something catastrophic happen, i'll be more concerned about the health/long term risks than the cost, but to each his/her own.

cannedmilkman · Answer

Of course plenty of people don't have health insurance and are fine. I already acknowledged that it is 99.9% (or higher) that nothing terrible happens. My point is exactly that having insurance allows you to focus on health/long term risks of a catastrophic health event because you won't have to worry about how to pay for it.

You are rolling the dice on your health and financial future. In all seriousness, good luck.

snowinTX · Answer

You don't need to come down with a life-threatening disease to affect your finances. Here is an article I found after a quick search: https://www.mozdex.com/necessary-health-insurance/ Similar info can be found elsewhere.

A quote from there: "In the United States, the average cost of a trip to the emergency room is almost $1,100. This does not count tests and any follow-up care or necessary hospitalization. The $1,100 covers the cost of the emergency room doctors and supplies. If X-Rays are needed, expect your bill to increase by at least $125 to $150. MRIs will drive up your bill by another $1,800. CT scans average $1,200.

A broken leg winds up costing you approximately $7,500. This price includes X-Rays, casting, any necessary surgical procedures, and physical therapy. A damaged rotator cuff (common ailment with baseball pitchers) costs almost $8,500 to repair."

In my personal experience, earlier this year I came down with a stomach flu and had to go to the emergency room due to dehydration (I drove myself there and honestly did not think I was in ER-type condition, but in the US there are no options other than immediate acceptance at the ER or scheduling an appointment with a doctor days ahead). They did some tests (including my favorite one: "Are you pregnant?" "No, I am absolutely, positively sure I'm not pregnant". Pregnancy test done anyway: $90. Question, why ask me in the first place then??), said it could be bacterial or viral infection (i.e. no real diagnosis) and gave me some clear fluid through an IV (no drugs, just the saline solution). Oh, and some saltines and Gatorade.

Final bill: $1,700. Because I'm employed and DO have insurance, I had to cover "only" $700 of this out of pocket.

My point is, it's easy to rack up the costs if you need any kind of medical attention here. And yes, although a major disease is concerning in itself more than the associated costs, a concussion or a broken bone will heal but it will take a while longer to pay off the debt associated with it if you were caught without insurance.

coaks · Answer

Alright, so say the OP has a 0.1% chance of being on the wrong end of a terrible life-altering injury in any given month. Say out of pocket costs were not the $1,700 for the hospital visit quoted before but as much as $30,000. The OP should be aiming to pay $30/month in that situation, maybe a little more. Say the OP has a 1% chance of being on the wrong end of a terrible life-altering injury requiring $30,000 in out-of-pocket costs. The OP should be aiming to pay $300/month in that situation, maybe a little more.

Now you could argue that paying $30,000 out of pocket would be entirely impossible for the OP to pay under any circumstance and so he/she may want to offer a premium and be willing to spend more every month in order to defray the risk of having to pay it all in one month. That would be an argument I would make as well. The OP (or anyone buying health insurance -- or forgoing higher wages so that their employer can buy it for them) would be losing money in both the short- and long-term but would be able to avoid personal bankruptcy.

However, in the scenario where the OP has to pay $1700 out-of-pocket vs $700 out-of-pocket (and those are the only costs that the OP would incur) on an insurance plan that costs upwards of $450 a month, the OP would lose money on the deal -- even in the event of a payout. That doesn't consider the far more likely possibility that there is no payout and the net loss would be much more.

milias, as long as you don't plan on getting horribly injured this summer, you shouldn't feel compelled to buy insurance against that unlikely event. However, none of us are doctors or know anything about your personal health situation or aversion to risk. Any advice I would give is purely speculative on my end and based on the choices I myself would personally make and nothing I would recommend for you. But best of luck with your decision.

cannedmilkman · Answer

I understand you are trying to calculate an expected value and I think that is the right approach, but I think you are underestimating potential costs by quite a bit. Chemo therapy (just one example of the many horrible things that COULD happen) can easily cost over $300,000 for all the treatments, hospital visits, drugs, etc.

Yes, $300,000 * .001 is just an expected cost $300/month. My monthly insurance is less than that, but that is somewhat besides the point since we are just making up the 0.1% figure anyway. The point is, going without health insurance is a game of dice I have no interest in playing, and anybody who can afford not to play probably shouldn't.

coaks · Answer

Totally agreed. I mean, I personally would prefer to have health insurance but for the summer between the time I quit my job and start school, I'm willing to take the risk because I don't have any continuous health issues. If I needed regular prescriptions for expensive medications or routine doctor's visits, I might be willing to shell out. In general, though, calculating that expected value of your medical payouts (exactly what I was doing in my post) is almost a fool's errand. There's no real accumulated data in the absence of digitized and distributed medical records.

cannedmilkman · Answer

Haha, Damn Coakleym. You are fast! You caught me in the middle of editing my post.

cannedmilkman · Answer

Agree that it is the right approach, but impractical for the reasons you identify. I look forward to the day when that data exists, since digitized medical records are one of our country's few hopes for controlling spiraling health care costs.

snowinTX · Answer

The whole business of an insurance company is based on calculating the expected value of your getting sick and charging you more than that. :-)

So by that logic, you would be overpaying if you did sign up for insurance. However, this is where your personal level of comfort with risk comes in. Since a major event such as cancer IS highly unlikely, above I brought up an example of a much more likely issue (food poisoning) that could hit anyone and the substantial expenses connected to it. In the end, everybody decides for themselves what will give them a peace of mind. I'm not a gambler... so I'll pay for the insurance, even if I most likely won't use it. P.S. for the more superstitious of us, NOT paying for insurance is exactly what would make a health issue more likely to happen... :lol:

conmisdosmanos · Answer

Hey everybody - I checked with my firm's rep and he gave me some decently priced options for BCBS HSA plans. With a $5k deductible, it's about $100/month (for a healthy, 26-year-old, non-smoking female with no plans for maternity). Not bad, and if something awful happens $5,000 won't seem like much. PM me if you want more info.

cannedmilkman · Answer

LOL. That is what I call a great point. Well played.

I would point out though, that some insurance options are far more expensive than others (aka COBRA), so it's clear not all insurance companies are using the same calculations (not unlike the folks on this board).

snowinTX · Answer

Thanks!

They may be using similar calculations (albeit on different sets of data), but deciding on different levels of profit margin. COBRA is just a law that requires the company to keep you in the same plan you on with while working there. In itself, it's not an insurance plan. $100/month premium and $5,000 deductible quoted above sounds like a great compromise. Unfortunately, those options are restricted by the plans offered by your company. This year I switched to a cheaper (read: higher-deductible) health plan in anticipation that I'd be quitting halfway through the year and may need COBRA for a couple of months, so I wanted to minimize the damage.