2012 November 04 Sunday
Major Medical Conditions Lock People Into Jobs
How would you like to find yourself locked into your current job because you developed a major medical problem? That would be an added burden on top of the illness and really limit one's life choices.
Richmond, Va. – (November 1, 2012) – Men with employment-contingent health insurance (ECHI) who suffer a health shock, such as a cancer diagnosis or hospitalization, are more likely to feel "locked" into remaining at work and are at greater risk for losing their insurance during this critical time as compared to men who are on their spouse's insurance plan or on private insurance plans, according to a new study by Virginia Commonwealth University Massey Cancer Center.
Published in the International Journal of Health Care and Economics, the study was led by Cathy J. Bradley, M.P.A, Ph.D., RGC Professor for Cancer Research and co-leader of the Cancer Prevention and Control program at VCU Massey Cancer Center and chair of the Department of Healthcare Policy and Research at VCU School of Medicine. The researchers used the Health and Retirement Study surveys (conducted every two years by the University of Michigan of more than 26,000 Americans over the age of 50) from 1996 through 2008 to observe employment and health insurance status among 1,582 men. They focused on the individuals who participated in the interviews two years apart and whether a health shock occurred in the intervening period between the interviews. The results shed light on potential benefits and drawbacks of the Affordable Care Act (ACA).
I go years without getting so much as cold virus. But lately I've been thinking I ought to buy some long term high deductible insurance for major medical problems (assuming such medical policies exist). I think of it as insurance aimed at ensuring one can leave one's current job should one get a serious disease. Anyone done this?
The fact that employers can buy medical insurance in pre-tax dollars but individuals can't seems like a major wrong in US tax law.
By Randall Parker at 2012 November 04 07:37 PM
Based on my own experience searching for non-group, individual high deductible insurance, insurers and state regulators do their best to frustrate the consumer in search of straight forward high deductible insurance, but it's out there. Four years ago - before I was totally broker - I had a policy in New York that cost about $2,000 /year. For the conscientious, it is the way to go.
Yes, I do that. It costs me about @1200/year with $10,000 deductible. I was wondering whether the Affordable Care Act (ACA) makes this extra insurance unnecessary. I guess I should read that article you linked to.
Is this policy tied to a single state? What if I wanted to buy a policy and then be able to move to any state? Will your policy move with you?
Also, can the insurer cancel it?
I'd love to be able to buy up front a 10 year medical disaster insurance policy and then be able to forget about medical insurance.
Welcome to why people wanted healthcare reform.
Anyway, in the pre reform market it would depend a lot on your health. If your a great risk you can sometimes find people to write a wide variety of things. If you have a pre existing condition your fucked.
Ten year insurance is pretty hard to come by. There are actuarial reasons for this.
Yes, rescission was something of a problem pre reform.
Some policies will be for limited doctor networks, so moving can be a problem.
You sound knowledgeable about insurance. So how many years of policy is it possible to buy up front? Do they only let you pay by year? Or can you buy 3-5-7 years?
The standard for the whole insurance marketplace is one year. There are so many companies selling so many different things that I'm asking to put my foot in my mouth if I say that X policy doesn't exist. However, let's just say the longer the timeline the less likely its being sold. Nobody wants to take on uncertain risks that far out in time. There isn't a good enough market for it, your asking to get selected against. Of course if your a 20 or 30 something invincible with no pre-existings someone might give you a shot.
Try to understand that medical insurance isn't really long term insurance. If you get a long term policy either your usually trying to punk the company (because you think you will develop a chronic condition and want to lock in long term insurance) or the company will try to punk you (rescind policies as possible if you do get sick). In a one year time frame both parties just figure any risk/benefit will be over in a year and while that is expensive it can be controlled.
With the exception of many basic term products (which still require underwriting) many insurance companies have gotten in a lot of trouble trying to write long duration policies. For instance the whole industry took a giant bath on LTC insurance. And that stuff isn't even as variable in cost as major med (the cost is know, the incidence and duration isn't).
Your going to hate to hear this, but there are only two health plans that make any sense (Obamacare isn't one of them).
1) Free for all. Most people get care they need at affordable price. Some people die of preventable diseases for purely financial reasons beyond their control. People have to live with some uncertainty surrounding their health.
2) Single payer. Everyone gets care. Reasonable cost control. Some rationing or slowing of innovation. Almost nobody dies for financial reasons. Honestly though I think the biggest benefit is individuals and firms focus on living their lives and producing things rather then how to game health insurance.
There is one other health plan that can work well, though only for a very small fraction of the populace: build up so much money you can afford to pay even for major medical problems out of pocket.
BTW, Obamacare offers us one big advantage that I've overlooked until now.
There is one other possibility I didn't mention which is my favorite, but is very much like single payer in that there are price controls, guaranteed issue, and a mandate. And that is Singapore/Switzerland. However, Obamacare is not those systems or even close despite occasionally being sold that way.
Actually, health care reform has an interesting effect because of this: it can allow people much more flexibility in leaving their job. In some ways, this may be offsetting the effect of the housing price collapse, which makes many people unable to leave their jobs and move cross-country, because they have to take a $100K loss to do so.