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The Almighty Buck IT

Ask Slashdot: IT Contractors, How's Your Health Insurance? 468

Posted by timothy
from the health-care-vs-health-care-finance dept.
An anonymous reader writes "In the tech industry, as the economy continues its downturn, IT folks in my circles who were either laid off or let go are turning to contract work to pay their bills. Layoffs and a decline in tech jobs has affected older IT workers the most. Many of us find it more lucrative and enjoyable in the long run and leave the world of cubicles forever. However, there is much to be said for working for a large company or corporation, and health insurance is one of the benefits we value most. But what happens to those who find themselves in this position at mid-career or later in life? Hopefully they have accumulated enough savings or have enough money in an HSA to survive a major medical emergency. Unfortunately, many do not and some find themselves in dire straits with their lives depending on others for help. I have been working IT contracts mostly now for the past 11 years and I've done very well. I belong to a group insurance plan and the coverage is decent, but as I get older, premiums and copays go up and coverage goes down. If you work contracts exclusively, what do you think is the best plan for insurance? Any preferences?"
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Ask Slashdot: IT Contractors, How's Your Health Insurance?

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  • by Razgorov Prikazka (1699498) on Thursday August 23, 2012 @02:07PM (#41099569)
    1 or 0
    • 1 or 0

      There can be only one.

      • by cayenne8 (626475) on Thursday August 23, 2012 @03:59PM (#41101351) Homepage Journal
        Nah...easy question to answer.

        If your contracting..first...incorporate yourself, I went for the subchapter "S" version, look it up, lots of benefits to this, including saving yourself significant payroll taxes (SS, medicare, etc)...

        After this..get a high deductible insurance policy...my deductible was about $1200....this is for major medical, the emergency route, heart attack, hit by a bus..etc.

        With a high deductible account..set up a HSA...and load it with money pre-tax...it is not a use it or lose it...at the end, you can roll it over for retirement if you wish..but load this up pre-tax for routine care.

        Do this immediately when starting contracting. I am currently W2...and really miss doing my healthcare this way....although I still have funds in the HSA I can access...I just can't add more to it due to Obama admins even more restrictive terms on HSA's with the affordable care act (I still can't understand why they added more restrictions on it rather than opening it up to make it easier to get and use one)...

        But this worked well for me...insurance premiums were quite reasonable and easy to get..and I'm older than the usual Slashdotter, and I do have pre-existing conditions (sky high triglycerides)...and no problem getting covered. First insurace covered was a little fly by night, but got them, kept them for about 8mos...and then switched to BCBS....

        I had to go that route because I screwed up and let my last W2 insurance drop...it is much easier to get new insurance when you have coverage rather than letting it lapse too long. Get that Cobra if you have to to fill the gap.

        Of course there are special circumstances...but I think this is an excellent system....you maintain it..you shop around for your own Dr. and make your decisions with your Dr.

        I also found, that often, when I told the caregiver I was paying myself, I got up to about 15% discount right of the top....I had an MRI where they did this.

        • by IICV (652597)

          It looks like you probably need an ellipsectomy [wikipedia.org] too, but that might be a pre-existing condition.

        • by Rich0 (548339)

          I also found, that often, when I told the caregiver I was paying myself, I got up to about 15% discount right of the top....I had an MRI where they did this.

          You apparently think you got a good deal. The last time I looked at an EOB from my insurer they're getting about an 80% discount, and I pay only 10% of that (ie 2% of the original bill).

          I've had to deal with quite a bit of catastrophic care. For something like heart surgery expect the bills to come in at $100k, the insurance company to pay $10-20k, and you pay about $1-2k or your out-of-pocket limit if you hit that first on a 10% coinsurnace plan (you pay twice as much on a 20% plan obviously). I'm sure

  • by maroberts (15852) on Thursday August 23, 2012 @02:09PM (#41099589) Homepage Journal

    Have UK Citizenship

    • Re:Best Preference (Score:5, Informative)

      by girlintraining (1395911) on Thursday August 23, 2012 @02:23PM (#41099837)

      Have UK Citizenship

      Or Canada, Spain, Mexico... a lot of countries offer varying degrees and types of nationalized healthcare. The United States stands alone in being the only G8 country that lacks it.

      • Re:Best Preference (Score:4, Informative)

        by PopeRatzo (965947) on Thursday August 23, 2012 @02:52PM (#41100361) Homepage Journal

        Or Canada, Spain, Mexico...

        or Italy, Belgium, Israel, Norway, Denmark, Sweden, Switzerland, Netherlands, Japan... ...Kuwait, Austria, Finland, Slovenia, Ireland, Portugal, Iceland, Cyprus, Hong Kong, Singapore, Spain, France, Bahrain...

      • Re:Best Preference (Score:5, Informative)

        by fm6 (162816) on Thursday August 23, 2012 @03:01PM (#41100513) Homepage Journal

        My mother actually traveled to Canada for cataract surgery. She was no longer a Canadian citizen, but she was eligible as a recipient of the Canadian equivalent of Social Security.

        She could have had it done under Medicare, but would have had to cover huge co-payments.

      • by cayenne8 (626475)
        Thing is a lot of those countries can concentrate on their spending on healthcare (especially in the EU) because they don't have to pay much money for defense....why?

        Because we in the US cover them for that.

        Let's pull most of our bases out of there...save ourselves some money and let these countries start picking up the tab for their own defense....we can use the savings to put towards our own health care....

    • This IT contractor would have a "major medical emergency" dealt with for free.

      (OK so I am actually covered by some private insurance that goes with my wife's job and I do use it from time to time, but in the UK this mostly only covers elective stuff as the private sector isn't set up to cope with emergencies.)

    • Re:Best Preference (Score:5, Insightful)

      by kramulous (977841) on Thursday August 23, 2012 @02:48PM (#41100271)

      Yup. I dropped by to say pretty much the same thing: Move to a country that gives a fuck about the health of its citizens.

      Wealthiest nation on earth, my arse.

    • Re:Best Preference (Score:5, Interesting)

      by cluedweasel (832743) on Thursday August 23, 2012 @02:58PM (#41100459) Homepage
      You may jest, but this is my backup plan. As a UK citizen in the US, I hope to make it on the plane and back to Blighty if I get seriously ill. My $780 a month private health insurance is bugger-all use most of the time. With deductibles and doctors who don't seem to be able to diagnose anything without $20k worth of tests, it costs me an arm and a leg.
    • Actually, you don't want the UK for anything urgent. In the UK, unless you're willing to pay for a private clinic, you'll usually need to wait at least 6 months before you can see a specialist.

      Having lived in the UK, France, and the US, I'd pick the French system for most cases over the American one and then I'd pick the American system over the British one. At least in the US, you can get treated in time (if you or your family are insistent enough), even it means you won't be able to pay your hospital bil

      • Re:Best Preference (Score:4, Informative)

        by slim (1652) <john@hartnup3.14.net minus pi> on Friday August 24, 2012 @05:01AM (#41106929) Homepage

        Actually, you don't want the UK for anything urgent. In the UK, unless you're willing to pay for a private clinic, you'll usually need to wait at least 6 months before you can see a specialist.

        [citation needed]

        Two NHS anecdotes of my own:

        I had a pain in the left side of my chest while running. Looked at the NHS direct web site, which told me to call an ambulance. I didn't, but I went to A&E soon afterwards. Within 5 minutes I was being interviewed by a nurse, and within 20 minutes I was on an ECG. Within 2 hours I'd had a chest X-ray and a second ECG. Happily I was given a clean bill of health -- the pain was just caused by muscle tension. But I was astonished by the rapid and thorough response.

        More recently, a couple of friends noticed a mole on my back which they thought I should get checked out. I phoned for a GP appointment, and got one 3 days hence. The GP referred me to a consultant dermatologist. That appointment was about a week later. I got to the hospital 10 minutes early, and was seen 5 minutes early. The consultant gave me a thorough examination and recommended a biopsy. I had to take a form to reception -- where there was no queue -- and made an appointment for the biopsy scraping, 1 week later. Again I was seen on time, treated with immaculate professionalism. A couple of days later the test results came through the post -- all clear.

        I appreciate some people have had bad NHS experiences, and of course we must relentlessly maintain/improve standards. But mostly I sense that people in general are pleased with the NHS. In particular, I'm of an age where lots of my friends are having babies, and not one has complained about NHS maternity care.

        Also you say "for anything urgent". My sense is that the NHS is very good at prioritising. If you find yourself waiting, it's because someone with a more urgent need has taken precedence. For example, with my chest pain, I jumped a queue of bleeding but stable A&E patients.

  • by emj (15659)

    Move to Scandinavia, I meet lots of people from the US who have a great time over here. Sure the pay after taxes is going to be less, and you will have to learn a new language, but in the end (of your life) you will have gotten the better deal over here.

    • by Roogna (9643)

      What are the immigration rules like for self employed workers in Scandinavia? A lot of us wouldn't mind relocating if anything just for the enjoyment of experiencing more of the world. But as someone who's been looking into this option for myself and my family I find the rules regarding people who are bringing their own employment entirely with them to be vague at best in most countries.

      • by kroyd (29866)
        If you're self-employed, and plan to stay so, it is nearly impossible, as far as I know there are no "bring so-so-and so much money / create this many jobs" exemptions in any Scandinavian country.

        What you can do is to get hired by a company, in which case it is just a couple of forms to fill out for the company in question [*], or get married.

        *: This assumes that you've got some "valuable skills", and that you'll be able to make a livelihood here.

  • Critical illness (Score:4, Informative)

    by roman_mir (125474) on Thursday August 23, 2012 @02:12PM (#41099643) Homepage Journal

    Treat insurance as insurance, not as a health care account, buy critical illness with a high deductible (maybe 10-20K), but make sure it covers 5-10 years of your expenses for sure. For the normal every day stuff just pay out of pocket.

    • Re:Critical illness (Score:4, Informative)

      by Anonymous Coward on Thursday August 23, 2012 @02:17PM (#41099715)

      Wrong. You'll pay several times more out of pocket than an insurance company would pay, because of their quantity discounts. It is NOT a competitive free market or anything of the sort. It's monopolies all the way down, and they have the literal power of life and death over you, and they use it.

      • Re:Critical illness (Score:5, Informative)

        by Ichijo (607641) on Thursday August 23, 2012 @02:28PM (#41099915) Homepage Journal

        Wrong. You'll pay several times more out of pocket than an insurance company would pay...

        Wrong [kevinmd.com]:

        A recent article in the Los Angeles Times reported a CT scan of the abdomen costs about $2,400 for patients insured by Blue Shield of California, while the Los Alamitos (Calif.) Medical Center cash price is only $250... Another local California hospital charges insured patients $415 for blood tests that cost only $95 in cash.

        • Part of the issue here, is that for every hour of hospital service, 1-2 hours of paperwork is required to deal with insurance companies.

          The overhead alone increases health care costs in the US by at least 30% and as much as 45%.

          Additionally, insured patients are used to subsidize the hospitals for mandatory services performed on uninsured patients in the ER, which often account for 30-40% of hospital's billing.

          Those together automatically double the costs, or more, simply because the US system is broken in

      • Re: (Score:2, Insightful)

        by Anon-Admin (443764)

        I think you are wrong there.

        Insurance to cover me, wife, and kid @ work $685 a month

        Paying out of pocket

        $65 a visit + tests and prescriptions.
        Averaged $150 for a visit.

        We would maybe see a doctor 2x a year each.

        12 visits == $1800 a year
        12 month of insurance == $8220.00

        Saving us $6420 a year.

        • by TXG1112 (456055) on Thursday August 23, 2012 @02:39PM (#41100113) Homepage Journal

          You are assuming you will never have a significant medical need. This is a very poor assumption and it is obvious that you are not capable of doing the necessary risk/cost calculations. Bear in mind that one hospitalization will run you $10k, if you need to have a major procedure done that will likely cost you $25k or more. These are just for one time events. If you get a chronic condition, these numbers can go way up.

          The reason insurance is required under the new plan is that people are stupid and short sighted.

          • by jedidiah (1196) on Thursday August 23, 2012 @02:59PM (#41100497) Homepage

            He is assuming nothing. However, you are.

            The whole sub-argument is about traditional major medical coverage that handles precisely the sort of large out of pocket costs you're talking about.

            Insurance simply does not scale down.

            For smaller claims, the transactional overhead if more than the cost of the service itself. Everyone is better off just paying cash and avoiding the overhead of the small stuff.

            You avoid the immediate transaction costs of the small stuff plus the any scaling issues you will trigger from magnifying the size of the claims management apparatus.

      • Wrong. You'll pay several times more out of pocket than an insurance company would pay, because of their quantity discounts. It is NOT a competitive free market or anything of the sort. It's monopolies all the way down, and they have the literal power of life and death over you, and they use it.

        Yup. You'll be buying $800 band aids to pay for the 50 people who got sick without health care, because they wanted a choice. That's socialism. It's just 'feel good' socialism where you feel like a free wheeling loner that doesn't want to be told what to do.

        He's also the guy who hits your car without auto insurance, even though the state mandates it. Ha ha, not his problem. The free wheeling individual decision making loner strikes again.

      • by timeOday (582209)
        Maybe it's quantity discounts (the efficiencies of working with 1 payer for thousands of people instead of thousands of payers).

        But I think at least equally likely is the fact that insurance company has laywers and even doctors whose only job is to push back on costs.

    • by sjames (1099)

      They will charge you double or more what they will charge an insurance company. Sad but true, they seem to be the one business that hates cash.

      • Re:Critical illness (Score:5, Informative)

        by HornWumpus (783565) on Thursday August 23, 2012 @02:30PM (#41099947)

        Unless you ask for cash discounts before receiving services. Then you will pay about what the insurance companies do.

        They love cash, they also love to not have to bill insurance companies.

        • by hrvatska (790627)
          This might vary by area. I know two people in my area (central NY state) who didn't have insurance and tried negotiating prices with doctors and hospitals. No one they contacted would go along with it. They eventually paid full price, almost certainly more than the price insurance companies negotiate. Both of them had to take out large loans to finance their operations. While not offering discounts, the doctors and hospitals were quite willing to steer them to companies that specialized in medical loans.
      • No they won't. Go to your doctor and tell them ahead of time you will be paying cash. You'll get the discount or better.

        The inflated rate is charged when they know you won't pay so they can write off the inflated "loss" and then moan about how much the uninsured cost their business.
  • If you work contracts exclusively, what do you think is the best plan for insurance? Any preferences?" Canada, failing that, France. Seriously, we need to pass HR676 [healthcare-now.org], it would be the greatest economic stimulus ever.
  • I pay $90/month for a really sub-par insurance that caps payments to 2000. If I get hired full-time at the end of my contract, I will have a proper insurance plan.

    I wish I had a public option, or better yet, medicare.

  • My health plan is to avoid getting sick.

    I wouldn't do that long-term, though. I'm only temporarily contracting and start a full time job with insurance benefits in two weeks.

    • My health plan is to avoid getting sick.

      I wouldn't do that long-term, though. I'm only temporarily contracting and start a full time job with insurance benefits in two weeks.

      That'll work pretty well until a guy in a cement truck falls asleep behind the wheel and rear ends you. Hope you didn't think you'd get much out of your car insurance company. Well, they might look for your missing leg for a few minutes.

  • by dkleinsc (563838) on Thursday August 23, 2012 @02:20PM (#41099769) Homepage

    I'm assuming OP is in the US, because in most other countries this is a non-issue.

    This was the kind of situation that Obamacare is intended to address, by making the individual market a viable option for people who aren't getting insurance through their employment, eliminating exclusions for preexisting conditions and requiring no more than 20% overhead (for reference, Medicare runs at about 3% overhead and the VA closer to 1%).

    Other approaches, while you're waiting for that law to fully kick in:
    - If you're married, and your spouse is a full-time employee somewhere, use their group plan.
    - If you've saved up a lot, which it sounds like you have, consider focusing on catastrophic coverage.
    - If you're older than 50, consider the AARP. They provide all sorts of discounts, including on health insurance.
    - If your life situation allows, you might be able to relocate to a civilized country. This is obviously a big change, so you wouldn't want to make this lightly.
    - Put up with the higher rates and less insurance. It's not pleasant, of course, but it sounds like you can afford it.

    • you might be able to relocate to a civilized country.

      Do civilized countries actually want us? Look at how much some slashdotters hate foreign IT workers as for comparison (unless they only hate them because they're racist, I guess). I won't deny that I've often considered escaping the more troublesome elements of U.S. culture, but I'm not convinced it's really possible.

      • by gurps_npc (621217)
        Most civilized countries are relatively happy to accept American citizens.

        We aren't refugees, there aren't a huge number of us clamoring to get in, and most of us don't even think of leaving the country unless we are well educated and have some financial resources.

        Now, if there were a huge disaster and millions of Americans, particularly poor Americans, were to pack and and try to move, that would be a different story.

  • by Anonymous Coward on Thursday August 23, 2012 @02:21PM (#41099803)

    I contracted for 2 years. During that time, I purchased health insurance for myself, wife and 3 children from a health insurance company. It's actually really easy. I comparison shopped online, picked an insurer with a plan that had good coverage at a rate I could afford, called them up and bought a policy. The insurer did a check of our medical histories, which took about a week, and involved them calling doctors. Fine. The policy took effect about 2 weeks after the medical checks were complete.

    I was paying about $300 / mo for myself, wife and my 3 kids - and that includes a kid with autism, which the insurer could not turn down, thanks to the Affordable Care Act (GObama! Sorry, had to :) ). They did charge me $10 extra a month for my autistic child, but that seemed more than reasonable to me. $300 / mo might seem high, but it's only about $50 more than what I pay when getting insurance through an employer. The copays were competitive ($10 prescriptions, $30 doctor visits and such). The other deductibles, co-insurance, etc were a bit higher, but not insanely higher than what you'd see through a plan from an employer.

    There was one thing that stunk about the plan, though - if my wife got pregnant, the insurer would drop her coverage. That sucks. In fact, I couldn't find a single insurer that would cover pregnancy - nor would they cover things like IUD, birth control pills, etc. Basically everything you'd typically associate with a woman's health was completely not covered, which is ridiculous.

    Once the Affordable Care Act goes completely "live" in 2014, though, insurers won't be able to deny women health coverage if they're pregnant, and they'll have to cover basic women's health care. Anyhow, wasn't trying to make this a political statement, it's just interesting how broken the current system is for women.

  • When times are good, save up for times that will be bad. An HSA is one tax efficient vehicle for medical expenses but due to contribution limits you'll probably need more than that. Basically spend less than you earn and save the rest for the future. If you're smart enough to be in IT then you're smart enough to know that you will have medical expenses in the future and you're being paid better than the average worker now. Plan accordingly.

  • I pay a little over a $100 a month, to have insurance for just myself. That equates to having a $1,250 deductible.

    My family is on a seperate plan, that is held individually by us. Ironically, it's with the same insurance company. It's $260/month for my wife and 3 kids. Granted it has a $5,000 deductible.

    But it makes me wonder just how much my company is paying out. If I am paying $100 for myself, and $260 for four others?

    In fact, to add my family would have been more than we currently pay combined. Plus mo

  • by Anonymous Coward on Thursday August 23, 2012 @02:26PM (#41099887)

    In my experience, High Deductible Health Plans from *major* carriers are quite good. I'm not talking about those discount $50/mo. plans you can get through trade organizations. I'm talking about "High Deductible" plans from Aetna, Blue Cross, etc... You might have to cover the first $2k - $3k per year out of pocket, but after that you're often covered at the 90% to 95% level with no upper limit for major medical events like cancer, etc...

    If you're self-employed, you ought to easily have $2k - $3k per year available to pay pre-deductible health expenses. It's really not that much money.
    My observation is that most people seem conditioned to have this totally irrational expectation that ALL of their health expenses should be covered, with maybe a nominal $20 "co-pay" at every office visit. That's silly! Why not just pay for ordinary expenses out of pocket, and save your insurance premiums for the truly disastrous stuff (i.e. broken bones, appendicitis, car accidents, etc...)?

    I'm just continually blown away by two income professional households with $120k+ income who just absolutely can not bring themselves to shell out a few thousand dollars per year out of pocket to pay the doctor. What's the big deal? 5% of your income is too much out of pocket expense? They'll happily blow $1500/year on mobile phone service, but $2k - $3k / year on pre-deductible health expenses are too much? But I digress......

    High Deductible Health Plan from major carrier. The only way to go.

  • by Lucas123 (935744) on Thursday August 23, 2012 @02:27PM (#41099899) Homepage
    I have a great job and my company affords me a fantastic health plan. Unfortunately, a close friend of mine got laid off after a head injury caused a concussion and after six months of short term disability he was fired from the job where he'd worked for 13 years. He had been making about $60,000 a year. His wife didn't work. He lives in good 'ol Massachusetts, and his unemployment is too high to warrant MassHealth, so he's paying $1,300 a month for Cobra to cover his wife and two children. His savings are almost depleted and he's still recovering (headaches, dizziness, contant pain). While I fully support a national healthcare plan, the one we have in place -- get healthcare or pay the fine -- ain't doing it. More needs to be done to help those in need of health coverage so they don't wind up going into emergency rooms for chronic illness care. Any study worth its salt shows preventative care is cheaper than reactive care.
  • Any preferences? (Score:2, Flamebait)

    by turbidostato (878842)

    Yeah, of course: moving to a country with a civilized public health system. Each and every first world country but USA, that is.

  • by bobbied (2522392) on Thursday August 23, 2012 @02:54PM (#41100395)

    I've always thought that the biggest problem WAS insurance. There is no other area where the consumer generally has *no idea* what the cost is of what they consume. They just care about their copay or out of pocket and don't usually know (or care) what the real costs for the services they consume are. It follows that when someone else is paying for it, people tend to consume more than they really need, which drives up costs for everybody.

    Running a close second is malpractice liability and the host of "cover my butt" testing now done by doctors. With the patient not really knowing what all this stuff costs and the doctor facing increasing malpractice insurance costs the pressure to do tests "just in case" is huge, even if the test is unlikely to ever catch anything and is expensive. You know that a good percentage of medical testing falls into this category, and this simply drives up medical costs and insurance premiums.

    I suggest that we attack this problem on two fronts (once we get the current "Affordable Health Care Act" off the books.)

    First, I think the expansion of HealthCare Security Accounts (HSA) is in order. Make it possible for folks to buy catastrophic health care plans (with very high deductibles) but allow them to put pre-tax money into HSAs up to the max out of pocket per year. Structure them like 401Ks and encourage folks to save though out their lives for medical expenses and allow these accounts to be passed down to others upon death. This will put the patient back into a position to care about costs and make it easier for them to refuse unnecessary testing.

    Second, we need to put caps on medical malpractice awards for pain and suffering and make the looser pay legal fees in medical malpractice cases. Awards need to be for actual damages (i.e. for past/future medical expenses, lost earning potential etc) but pain and suffering and punitive awards need to be capped. The "looser pays winner's legal fees" will effectively eliminate those who are gaming the system by filing frivolous suits and their lawyers who are looking for a lucky million dollar award from a jury. All this would serve to lower malpractice insurance costs and lower the pressure on Doctors to perform unnecessary testing that drive up costs.

    All in all, we need to get back to a system where the patient can take responsibility for the cost of their care. Only then can we hope to contain the ever expanding costs.

  • by reallocate (142797) on Thursday August 23, 2012 @02:54PM (#41100413)

    Seriously.

    When health insurance and health care are sold as a for-profit products, it is inevitable that some people will go without insurance and/or care. Why? Because they can't pay enough to make it profitable to sell to them. The market is fine and all, but it can't survive without profit.

    Your best bet now is to look very hard for some form of group insurance. The older you are, the greater the probability you will succumb to somthing that requires surgery and/or long-term treatment/rehabilitation. i.e., things that generate 6-figure bills. (Think about things happening that cost $500,000 to deal with. Think about pills that cost $100 a pop.) Better to have good coverage for that eventuality and poor coverage of things like routine doctor visits than vice-versa.

  • by viperidaenz (2515578) on Thursday August 23, 2012 @03:45PM (#41101133)
    I don't suffer the misfortune of living in USA. My country has a half way decent free public heath system and being self employed I pay less tax to replace some public cover with private. I end up only paying an extra $500/yr to get full private heath insurance and life insurance for myself and my wife.

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