A Story About Paying Off Debt and the Obstacles Along the Way

My Experience With (Sh*tty) Short-Term Health Insurance


When I quit my job back in April to take care of my mental health, my two primary concerns were (1) oh God, what am I going to do with my life now? (answer: nap, learn some Italian, walk some dogs, rant on my blog) and (2) how are we going to... you know... pay for things? Like food. And cat litter. And - dun dun DUNNNNN - health insurance.

The health insurance worried me the most.

Generally, I'm pretty resourceful. I make things happen. Like, hand me some cardboard and a roll of duct tape, and I'll fix a few appliances, build some toys, and maybe craft a pair of zero-drop running sandals. Time me while I'm putting together an Ikea shelf, and I'll wow you with my efficiency. Ask me to conduct some Internet research, and mere hours later, I'll present you with a sheaf of peer-reviewed journal articles and a professional literature review. Drop me in a foreign country in a stranger's house in the middle of nowhere with no money and no language skills and no access to transportation, and I will find a way to get to the nearest city (this happened).

Problem-solving is very much in my wheelhouse.

But health insurance in the U.S.? Not employer-sponsored?

Is that problem even solvable?


Limited Options


My first step in securing health insurance as an unemployed person was to look into the family plan associated with my partner's insurance. As a teacher, he pays almost nothing for his own healthcare, a rare and well-deserved perk of the job. I made a wish on some magical unicorn dust that he'd be able to add us to his plan for, like, a couple hundred a month.

Nope.

Try $800-$900 per month. Way outside the capacity of our single-income budget.

Step two: I checked into ACA (Affordable Care Act, aka Obamacare) options. The ACA grants special enrollment periods in certain situations such as job changes, so I knew I could sign up immediately, which was a plus. I also figured that on our substantially reduced income, we'd be eligible for a subsidy to take the edge off the premium.

Turned out that while I did qualify for a special enrollment period, I did not qualify for a subsidy, thanks to a sinister little loophole called the family glitch.

Basically, because Fortysomething has insurance through his work and pays very little for it, and because his employer does offer family coverage (though no teacher's family can actually pay for it), we weren't eligible for ACA assistance. Our unsubsidized premiums would be astronomical: again, $800-$1000 per month, this time for a bronze plan with a laughably (or maybe cry-ably) high deductible.

This situation - the family glitch - affects millions of people, and the government has not stepped up to create a solution (quelle suprise!)

So the ACA option wasn't going to work, either.

I then looked into healthcare sharing ministries, or healthshares. Instead of providing insurance, healthshares offer cost sharing. The idea is that you buy into the healthshare by paying a fixed amount each month, sort of like a premium. When you incur a medical expense, you cover it out of pocket and submit a claim. Then the healthshare dips into its money pool and reimburses you. That's how it's supposed to work, anyway. Several friends who have participated in these programs say they're generally satisfied with the experience.

At around $400/month, a healthshare plan was affordable-ish. But the more I learned about healthshares, the less interested I was in joining one, and not just because they don't cover things like pre-existing conditions, contraceptives, and mental health services. Personally, my biggest issue with healthshares is that all of them are fundamentally religious. As an agnostic, I couldn't shake the squirmy feeling I felt when I thought about having to agree to the moral, religious, and ethical codes that every healthshare asks its members to abide by (though the specifics of those codes do vary).

Basically, I don't think healthcare should be tied up with religion, so healthshares are out for me.


Enter Short-Term Health Insurance


My research finally led me to short-term health insurance plans, which were limited under the Obama administration but have proliferated now that the hairy Cheeto is in office. Short-term insurance is just what it sounds like: health insurance coverage for a short period of time. It's a product offered not by the government but by profit-seeking health insurance companies.

In the past, short-term insurance was a true stop-gap measure intended to cover employment breaks for a maximum of a few months. Now, many states allow short-term insurance for terms of six months to a year, with the option to renew for up to three years.

Because short-term insurance is extremely problematic in many ways, not all states are on board with these plans. The biggest issue is that short-term insurance doesn't have to cover pre-existing conditions, nor is it required to cover maternity care, birth control, substance use disorders, and mental health treatment. In other words, coverage-wise, short-term insurance is no better than what healthshares are offering (and at least in some cases, they're probably worse).

States like California, New York, and New Jersey reject these coverage restrictions and thus do not allow insurance companies to peddle short-term plans. Other states, such as Colorado and Oregon, permit short-term insurance but have adopted strict rules designed to protect consumers.

Still other states, however, have allowed and even encouraged the expansion of short-term insurance options, and my state, Arizona, happens to be one of them. (Our unofficial state motto is, I'm gonna do whatever the hell I want; the state government is generally on board with this unless what you want to do is enact environmental legislation. But I digress.) As of September 2019, Arizonans can purchase short-term insurance plans with terms of up to almost a year and renewals of up to three years.


The Nitty-Gritty of My Short-Term Insurance Plan


I spent days researching short-term plans and eventually found one that had enough coverage to give me some sense of security. This plan includes:

-A $2500 deductible
-A maximum out-of-pocket limit of $2000 (after the deductible is met)
-80/20 coinsurance (i.e., once the deductible is met, I pay 20% of the negotiated bill)
-A maximum lifetime limit of $2 million
-Dental, vision, and Teledoc add-ons
-Prescription discounts

My family doctor, my kid's pediatrician and optometrist, my dentist, and my dermatologist all accept this plan, which was important to me. I didn't want to change providers.

When all was said and done, the monthly premium came out to a little less than $300.

Anxious that the underwriters would flag me for my age and previous antidepressant prescriptions, I applied. When my application was accepted, I worried that I was making a deal with the devil. I also felt an enormous sense of relief.

I've now had short-term insurance for six months, and I just renewed for another six months. So far, my plan has covered two dental visits at no additional cost, two flu shots at no additional cost, and a skin cancer screening at a discounted price (after insurance, I paid $100 out of my old health savings account). Although I've seen reviews of these plans that read like modern-day American horror stories, so far, the service I've received has been pretty standard - no better but no worse than what I experienced with my employer-sponsored Cigna and United Healthcare coverage.



Pros and Cons


Obviously, for us, an enormous benefit of short-term insurance is the cost. Unlike the premiums for Fortysomething's employer-sponsored insurance and the unsubsidized ACA plans, $300/month is within our budget. In fact, it leaves some room for us to continue putting money into savings, something that's extremely important to us.

The relatively low deductible and out-of-pocket maximums are also attractive, especially considering that many of the more affordable ACA plans can have deductibles of well over $10K.

However, my short-term plan comes with some undeniable problems:

1. It doesn't cover pre-existing conditions. How's that for some pre-ACA bullsh*t, huh? In fact, if you have pre-existing conditions, there's a very good chance you'll be denied coverage when you apply.

In contrast, ACA plans do not place restrictions on pre-existing conditions, which is one reason the ACA is so important (and why it's worth protecting and improving upon, at least until something better comes along). Prior to Obamacare, you could be denied coverage for things like, say, being pregnant. Meaning that some women had to go through their pregnancies without insurance.

Ask me how I know.

Ask. Me. How. I. Know.

2. Coverage is spotty. In fact... there are a lot of things short-term insurance doesn't cover: maternity care, fertility treatments, gender reassignment surgery, mental health services, and substance use disorder treatment, to name a few.

Also, if you fall off your horse during a rodeo, get injured while skydiving in your squirrel suit, or find yourself admitted to the hospital on a Friday or Saturday for anything other than an emergency (yes, this is actually a restriction spelled out in the fine print), you're out of luck.

For fun, you can skim examples of other short-term insurance restrictions on p. 14-15 in this here handy brochure.

3. The maximum lifetime limit of $2 million is insufficient. If you have a serious health condition, you're gonna blow through that cap in a jiffy. In contrast, ACA plans do not have lifetime limits.


Compromising My Principles


I'm going to be completely honest with you: I feel like I'm compromising my principles by buying short-term health insurance. Everyone - EVERYONE! - should have their healthcare needs met without endangering their financial well-being. For-profit insurance products are designed to make money for insurance companies, not protect the well-being of the people who would most benefit from good healthcare. Short-term insurance is built for people who are already pretty healthy and who are unlikely to affect the bottom line. The second it becomes clear that your health needs are going to incur substantial costs for the insurance company, you're out.

It's shady and unethical.

However - and I cannot emphasize this enough -

the better options are not affordable.

As in, we cannot afford them.

As in, if we were to purchase them, we will not be able to save anything.

Do I feel comfortable with my current plan? Not really.

But do I feel comfortable paying thousands of dollars a year for a plan that, if I need to use it, will require me to shell out thousands of dollars more before my deductible even kicks in?

Do I feel comfortable returning to an employment situation that makes me sick just to have employer-sponsored health insurance?

Do I feel comfortable having no money to save or invest?

No.

So here we are.

Like most of us, at the end of the day, we have to do what's most beneficial for our family. In this case, we have to select the best option out of several terrible options.


Tips For Purchasing Short-Term Insurance


If you're in a state that doesn't allow short-term insurance plans, good news! Your state is progressive enough to offer other choices. Your state sees you as a human being! Your state cares about your health! Your state understands that medical bankruptcy is expensive for absolutely everyone!

If you're in a state that does support short-term insurance, and if you're considering short-term insurance for yourself or your family, I can offer a few tips:

(1) Look for the lowest deductible you can afford. The deductible is the amount you have to pay before your insurance company helps you cover your costs (although prior to that, the company will negotiate with your providers, meaning that your medical bills will be lower than if you didn't have insurance at all). My current insurance company offers deductibles ranging from $1000 to $12,500.

At $12,500, your monthly premiums will be rather low, but you're going to have to shell out a sh*tload of cash for medical expenses before your insurance company even opens its wallet.

(2) Look for the lowest coinsurance you can afford. Once you've hit your deductible, you'll probably still be responsible for part of your expenses. The percent of your medical bills that you pay out of pocket is called coinsurance. For example, I have 80/20 coinsurance, meaning that once my deductible is met, my insurance company is responsible for 80% of the bill, and I'm responsible for 20%. If you have 50/50 coinsurance, you'll be on the hook for 50% of the cost; your insurance company will take care of the other half.

The lower your coinsurance, the better.

(3) Look for the lowest out-of-pocket maximum you can afford. The out-of-pocket maximum is the maximum amount you'll have to pay - after you reach your deductible - for medical expenses. In my case, I have a deductible of $2500 and an out-of-pocket maximum of $2000, meaning that the most I'd have to shell out (assuming my insurance company sticks to its end of the bargain and doesn't make up arbitrary new rules as we go along) is $4500.

(4) Make sure your providers accept your short-term insurance plan. As far as I can tell, every insurance company offers a Doctor Finder tool on its website. Look into this before you apply for a plan, and call your doctor to double-check if you're not entirely certain they'll accept your insurance.

(5) Read the fine print.

Read. The. Fine. Print.

Carefully review every single page in the benefits guide (here's an example of what to expect in a pre-purchase benefits guide), and call the insurance company if you have any questions. Again, do this before you apply. As I mentioned earlier, short-term insurance plans come with an abundance of stipulations, variations, and exclusions. Don't make any assumptions about what the insurance plan will cover.

(6) Once you have insurance, obsessively review every bill, and be a PITA. Let's say you go to the doctor for a regular checkup. Your doctor takes your short-term insurance; you know this because you confirmed with your provider and the insurance company before you purchased your plan. According to the benefits guide that you've read in detail, your insurance should cover this visit.

But let's say they don't. Let's say they deny your claim, and now you're on the hook for the full cost of the visit.

Do you cry?

Well, if you're me, yes. You cry every time.

It's okay. Cry.

I also encourage you to pen a few Twitter rants for good measure.

But do you give up and just pay the whole bill? NO!

Call the insurance company (I know, I have phone phobia, too... I'm sorry) and ask them what they can do to help. Request that they reconsider the claim. If they won't do that, ask them if the coding of the visit affected the outcome. Then contact your healthcare provider and see if they can either give you a discount or re-code your visit, if it's appropriate.

This seems like a ton of work, and it is. Not every call or request will yield results. Sometimes you'll ask for a discount or a claim re-evaluation, and you'll get nothing. But healthcare costs in this country are highly negotiable, and if you're willing to ask and push, there's a strong likelihood that you'll be able to catch a break at some point.

It shouldn't be this way. Haggling over healthcare costs shouldn't be a thing. This isn't the farmer's market.

Plus, this unspoken rule - that we should be negotiating our healthcare costs - is extremely unfair to certain people and communities. But here we are.


Final Thoughts


Healthcare is a major topic of discussion here in the U.S. Regardless of our political views, I think most of us agree that we can't keep doing what we're doing; something needs to change so that (a) healthcare costs are less extreme and (b) more people have comprehensive coverage.

I'd love to hear your thoughts and your healthcare/health insurance experiences. And although I can't call myself a true expert in this arena, I've navigated the healthcare system and I'm familiar with the lingo and the unwritten rules. So if you have questions, ask! If I can't provide answers, I'll point you to someone who can.
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11 comments:

  1. Health care is one of the biggest challenges for the unemployed, under-employed, and self-employed. I bought a low premium (subsidized) Kaiser plan for $130/month, but the catch was I was rolling the dice in case something bad happened. But, I'm in great health, so I gambled. Then I dislocated my finger and had to have surgery. I've now spent about $5000 in health care costs related to that. We have really bad options out there for heath care in 'Murica. :(

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    1. I am so sorry that happened to you, and I hope your recovery is going as smoothly as possible!

      I completely understand where you're coming from. My family is generally in good health, which we are so thankful for. However, some things are absolutely unpredictable - like when my kid came down with appendicitis last year and had to have surgery. There's just no way to know when a health crisis will emerge.

      It all feels like such a gamble. It shouldn't be that way.

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  2. It is embarrassing that in the richest country on earth, we can't provide affordable health care coverage for everyone.

    I have/had always considered myself "lucky" in that I have a decent employee-sponsored plan for my family, with good coverage and heavily-subsidized premiums. Then, my husband was diagnosed with lymphoma last May. I have learned the hard way that the out of pocket cost of his treatment, while not completely devastating, is still pretty damaging to our financial picture. And I consider us better prepared than many to weather this, financially. Had we been where we were financially three years ago--carrying loads of credit card debt and with no accessible emergency savings--and where so many other "middle class" citizens are still, we'd be toast.

    Something has gotta give.

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    1. I'm so sorry. And this is with insurance! OMG.

      When you're facing a serious illness, the LAST thing you need is to be stressing about finances.

      How is your husband doing? How are all of you doing?

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  3. I just got a short-term plan (Florida) for myself and my daughter. We pay $360/month for both of us, which is better than most alternatives (my husband and I don't have employer-sponsored insurance). The biggest downside for me is that my plan does not cover prescriptions at all, so I've had to buy my crazy expensive reflux meds from Canada (which has actually been a fairly decent experience - and it also saved me about $800). Worse still? There are so many people who can't afford even this crappy short-term insurance. ☹️ We just have to keep pushing to have better care across the board - and certainly mental health care should be much more affordable (or, better yet, free!).

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    1. So you totally understand where I'm coming from on this!

      I know - I feel privileged to have the insurance that I do. I am able to pay a little more in order to have a low deductible and a low OOP max. Yes, these plans *can* be less expensive, but at a certain point, they also become pretty questionable.

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  4. As a retired teacher and a husband who is self-employed, we have insurance through the school system. At present we pay a little over $1900.00 PER MONTH for family coverage (one under 26 yr. old on our policy).!! We are quickly going broke. Next year, the insurance co. wants $2025.00. We're taking our child off our policy, but will still pay $1800 per month. How is this AFFORDABLE for anyone?!

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    1. I'm hyperventilating just reading this. $2K a MONTH?!? OMG.

      At a certain point, something's got to give. There has to be a better way... Right? It's so frustrating.

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  5. I appreciate your brutal honesty in this post. I think there are people that sign up for the short-term plans or health shares and don't really seem too concerned about policies because they are in good health. I definitely don't trust those plans long term.

    Given my leukemia, I have no shot at the short-term insurance or the health shares. I always find it annoying that health shares that are religious based will exclude pre-existing conditions. Isn't the whole point of the religious beliefs supposed to be to support everyone? Seems the exact opposite of the message when things are excluded.

    The other thing that drives me nuts is the limited network. My cancer hospital which is one of tops in the nation is not covered by the marketplace plans. But it is covered by the short-term plans. Of course with the lifetime limits on short term plans, it's not like one could get many services from the cancer hospital. Such a mess.

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    1. Yeah, I really freaking HATE that I have to take this short-term insurance. I suppose we could do ACA, but our savings would get depleted pretty quickly. We really need something better.

      Congratulations on your retirement, by the way! So excited for you and Dragon Gal. Enjoy New Zealand!

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