Past Averages Do Not Predict the Future
I just read a blog post by Dani at Living Behind the Curve. She writes about her thoughts on going without health insurance in order to work part-time. Initially, she goes looking for individual health insurance, but talks herself out of it for several reasons. The policy has a $5000 deductible, and Dani calculates that her total medical expenses for the previous year came to $1200. So she points out that if she were to get this policy, she would probably pay $1200 in medical expenses (below the deductible) plus the $89/month in premiums. Not a good deal in her estimation.
She goes on to point out that the policy has a 24 month exclusion on pre-existing conditions, so the things that she generally has treated would not be covered for two years anyway. Her pre-existing conditions include bipolar disorder and fibromyalgia. In Colorado, bipolar disorder is an automatic decline with individual health insurance companies, so Dani obviously lives somewhere with more relaxed underwriting laws, and can qualify for a policy that will cover the bipolar after two years. A two year wait sounds like a long time, but it’s better than not being able to get coverage at all.
Then Dani makes the comparison with auto insurance. She points out that we don’t expect our auto insurance companies to pay for oil changes and brake pads (akin to doctor visits and low-cost prescriptions). Rather, for people with full coverage insurance, the insurance company will pay to fix damage that is over the deductible on the policy, and will write a check for the value of the vehicle if it is totalled. Dani notes that her truck is worth about $15,000 – and wonders about self-insuring the vehicle. If she could save up that amount in a high-yield saving account, and pay the account every month instead of the insurance company, she’d be ahead of the game. Chances are, she will not total her truck and the money will keep on growing. If she does total the truck, she can use the money to buy another one.
This scenario works very well when you’re self-insuring something with a fixed value and an absolute limit on the worst-case scenario. In this case, $15,000. You can budget how much to put away each month, and once you have $15,000 in the savings account, you can rest easy knowing that if something were to happen to the truck, you can replace it without going into debt. But what about liability insurance? There is a reason we’re all required to have liability insurance, regardless of our ability to self-insure our own vehicles. It’s because the worst-case scenario in a liability case is wide-open. It’s one thing to have $15,000 sitting around to replace your own vehicle. It’s entirely another thing to have $300,000 sitting around to pay someone else’s medical bills after you’re found at fault in an accident. And nobody wants to be on the receiving end of that lawsuit – that’s why we send our insurance companies into the ring on our behalf.
Health insurance is much more akin to liability insurance than to comp/collision insurance on a car. We really have no idea what the worst-case scenario could be when it comes to medical claims. People who choose a high-deductible (Jay and myself included) are already choosing to self-insure for claims that fall below the deductible. In our case, we have a $3000 deductible. We save money in an HSA, hoping that we won’t need to use it, but knowing that it’s there just in case. We can self-insure up to that amount.
Things that cost less than $3000 are not the reason we have health insurance. We have health insurance so that if I go over my handlebars on my bike and break my neck, we won’t lose our house. Or if one of us gets diagnosed with leukemia, we won’t have to declare bankruptcy. I’m always surprised when people present their normal medical expenses (typically below the level of the deductibles on the policies they can afford) as a reason that the health insurance will be of no benefit to them. Health insurance is a safety net. It was never designed to cover the small things. Rather, it’s there so that you can sleep easy at night, knowing that if a worst-case scenario were to occur, you could probably pay your portion of the bills within a year or so of payments. Without insurance, there are very few of us who could pay off a $500,000 bill within a year or so.
Happily, Dani mentions at the end of of her post that she has taken a job that offers full benefits, so she is no longer having to consider individual insurance. Since the plan is through her employer, it should cover her pre-existing conditions as well. But for people who are in Dani’s situation and don’t get benefits through work, make sure you consider a worst-case scenario rather than usual expenses when you ponder the option to self-insure. There are very few people who can truly afford to self-insure.
Hi!
Thanks for checking out my post. Everyone who has commented on it thus far has gotten caught up in the $10,000/car insurance thing, and I can (in hindsight) completely see why. What I didn’t make clear in that post is that the car insurance bit was a stop in my thought process, and not the ending point. Bad on me for not following that thought train all the way into the depot. :)
Another part of the story that didn’t make it into the post (although it did hit the comments) is that if I were to have a broken neck or leukemia, I would be out of work, and our finances would be shot to hell anyway, to the point of liquidating our assets and probably losing damn near everything. As I wrote in response to FrugalBabe earlier today, if I were out of work for more than about 3 months, that would be the situation whether or not I had health insurance. If it would lead us to bankruptcy, it would be due to loss of income in addition to, but not because of, medical bills.
My original intention was the same as yours is here — to encourage readers to evaluate the situation. In my time I’ve seen a number of people get burned because they thought health insurance covered everything, only to find out that they had a pre-existing condition, or they didn’t understand what a deductible was.
It’s all about making well-informed decisions (and considering the ramifications thereof). For me, it’s also been a crash course in recognizing that everything in my head doesn’t necessarily show up on the blog. :)
Dani,
You’ve made some good points here, and some clarifications that make sense. I agree completely with your warning that people need to read the fine print on their policies, be aware of pre-existing condition waivers and rate ups, know what the out-of-pocket amounts are, etc. Insurance is not something that should be bought after 6 minutes of comparisons.
The main point I’m making is that health insurance is there for catastrophic situations. That’s always been the intent of insurance. Since none of us know when a major illness or injury could occur, going without health insurance is a pretty big gamble.
You make a good point about being out of work – rather than just medical bills – leading to bankruptcy. But how much are your monthly expenses? Let’s say $4000. Over three months without any income, you would go $12,000 into debt (without savings). Compare that with a $500,000 medical bill, and it looks like a blip on the screen. It’s possbile to pay off $12,000 in debt (plus maybe a $5000 deductible and $2000 in coinsurance, putting the total at $19,000) with a lot of effort and cutting back. But very few people can recover from a huge medical bill. Medical bills tend to astound anyone who isn’t in the medical industry (and probably some who are).
Find a good agent, ask lots of questions, get the highest deductible you feel comfortable with, and put the money you save by skipping the “bells and whistles” policy into a savings account or HSA.
8/2/07
Congresswoman Diana DeGette (D – Colorado) entertained callers’ questions yesterday morning on C-Span’s Washington Journal concerning the Children’s Health and Medicare Protection (CHAMP) Act of 2007. The bill, supported by Democrats, and passed late last night, will reauthorize the State Children’s Health Insurance Program [SCHIP]).
Conservative callers to the program rightfully objected to certain elements of this legislation – namely the enormous increase in cost to the American taxpayer, the extension to middle class families earning over $80,000, availability of coverage to children of illegal aliens, etc.
Of course, Ms. DeGette had an answer for every objection – the bottom line being “these are children we’re talking about”. As one caller pointed out, however, medical benefits under SCHIP would cover “kids” up to 25 years old. No, Ms. DeGette informed the caller, the bill only covers “kids” up to 21 years old.
Despite Ms. DeGette’s defense of CHAMP-SCHIP legislation, I found what she omitted to be of greater interest. The following is what Ms. DeGette did not discuss:
o Her efforts to lift the president’s ban on stem cell research
o Her support for abortion (yes she is sponsored by EMILY’s List) results in the death of thousands of children every year.
o Democrats’ consistent anti-God, anti-family legislation weakens the American family.
o Democrats’ elimination of the Tobacco industry would be healthier for Americans than their taxing Big Tobacco as a means of increasing government revenue; if they truly believe tobacco kills, they should ban it.
o Democrats’ anti-business legislation reduces jobs in this country – thus expanding poverty.
o Her 2006 political campaign (source: http://www.opensecrets.org) source was by and large courtesy of business
o 54.1% contributors were PACS
o 67.9% of PAC contributors were businesses
o Ms. DeGette is married to Lino Lipinsky De Orlov, an attorney with McKenna, Long, and Aldridge (a relationship which benefits Ms. Lipinsky financially – see http://www.opensecrets.org) who is licensed to practice law in Colorado and DC.
From McKenna, Long, and Aldridge’s website (source: http://www.mckennalong.com):
“PUBLIC HEALTH AND PHARMACEUTICAL COMPLIANCE: DESCRIPTION
McKenna Long & Aldridge has one of the broadest, most experienced practices in the area of public health procurement, federal health care programs, biodefense and the marketing and sales practices of pharmaceuticals, biotechs and medical suppliers. Our practice focuses on laws and regulations affecting the types of relationships with the federal government…”
I appreciate CNBC’s basically asking guest financial analysts if they benefit financially from the investments they are recommending. I believe CSPAN/Washington Journal hosts and callers should take a similar approach when it comes to elected officials and the legislation they support.
Democrats’ consistent anti-God, anti-family legislation weakens the American family.
GrandView,
There were a lot of nutjob statements in your copy and pasted comment there. But let me focus on the above statement about the Democrats’ consistent anti-God, anti-family legislation
Please give me some examples of this “anti-god” legislation you speak of. And remember the first amendment to the constitution says:
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof;
I look forward to our discussion…
Thank you for your reply.
Regarding my comments concerning anti-God legislation: If God created the family and one political party passes anti-family legislation, or denies pro-family legislation, could not said party’s actions be construed as anti-God?
Also, if God gives life, and one party consistently favors legislation legalizing the taking of life (e.g., abortion as birth control; see also euthanasia), could not that party be said to be anti-God? The anti-family aspect of abortion and euthanasia is obvious.
Thank you for the link you sent pertaining to the U.S. Constitution, specifically the First Amendment. I don’t think Congress has ever come near to establishing a religion in this country. Representatives on both sides of the aisle realize that would be political suicide. Allowing children to have a time of silence in prayer, to pray to God, Baal, or Barbie, could hardly be construed as establishing a state religion.
However, with regards to recent RICO legislation/amendment (Ref. Clinton administration), Congress classified abortion protesters (and by inference and association: Evangelical Christians) as racketeers. Don’t believe our founding fathers, Jay, would ever have in their worst nightmares, dreamed that one day Christians would be classified as “organized crime” criminals.
The “Evangelical Left” representatives in Congress, because of their actions concerning RICO, have proven adept at running slipshod over the First Amendment when it comes to squelching freedom of speech and the right of the people to peacably assemble.
The Democrats’ of the 110th Congress have demonstrated their disdain for freedom of speech in their endorsement of the so-called “Fairness Doctrine”, in the way they rammed SCHIP through the House, and their violation of House rules in illegally overturning a vote they lost on the House floor — a vote that would have returned SCHIP to committee to have illegal alien benefits removed so that benefits would not be taken from senior citizens.
When any person seeks to take away what our founding fathers deemed “inalienable” rights, thus rights granted by an Authority greater than and outside the realm of any earthly ruler or kingdom, that person could be rightully described as acting in a manner that was anti-God.
Thank you again for your note. Glad we can agree to debate peacably and respectfully.
Look forward to hearing from you.
God Bless
It’s obvious that you’re a very faithful Christian and you believe the only way to be a good person is to live your life for Christ. That is great, I respect that. However, in a discussion about the laws of the United States of America, we’ll need to follow the constitution and think as our founding fathers, who by the way were all either Deists or Unitarians, wanted our country to be governed.
“If God created the family…”
Remember, our founding fathers were escaping a government run by a narrow definition of faith. Because of that, they played it safe and demanded a country where “Congress shall make no law respecting an establishment of religion”. Some other group with fictional beliefs might believe that their “God” wanted cocaine to be legal. We wouldn’t want to risk being “anti-God” by supporting the legalization of cocaine based on their demands – would we?
“Also, if God gives life, and one party consistently favors legislation legalizing the taking of life…”
There are a lot of religions that don’t believe in the killing of animals, even bugs. Some of them believe the animals are their Gods. Also, I know the republican party is a big supporter of hunting and the killing of animals. I don’t see the republicans making any laws prohibiting the killing of animals or bugs in the near future based on the narrow beliefs of some of the religious people in this country just to avoid being called “anti-God” by those people. Let’s remind ourselves again that our founding fathers want religion to stay separate from policy decisions.
“Allowing children to have a time of silence in prayer, to pray to God, Baal, or Barbie, could hardly be construed as establishing a state religion.”
It’s not “establishing a state religion” it’s “respecting an establishment of religion”. Telling kids in school that it’s time to pray, even if they aren’t specific about who to pray to, would be sending an uncomfortable message to the kids without fairy-tale beliefs in ghosts and such that they need to start finding something imaginary to have faith in so they’re not left out.
But I find it hard to believe that you’d be okay with it if your kid had a Muslim teacher telling him to pray. I see a lot of problems with parents saying that the teacher tried to sway their kid into praying to a different God, or gave a lower grade because of what their kid was praying to (or not praying to) during prayer time. I’ll have to side with our founding fathers on this one again, your kid will have enough time to pray at home and at church. If you think he’ll go to hell if he isn’t praying every hour or something, teach him to say a prayer as he’s walking in the hall between classes – or meet another one of his friends at his locker that believes in the same things he does and they can say a prayer together there. If you think that still isn’t enough praying and your God will not feel appreciated enough by those efforts, you can put him in a private school that isn’t paid for with the tax dollars of people that don’t have the exact religious beliefs and he can just pray all day.
“However, with regards to recent RICO legislation/amendment (Ref. Clinton administration), Congress classified abortion protesters (and by inference and association: Evangelical Christians) as racketeers…”
I didn’t know about Congress classifying abortion protestors as racketeers. The only thing I’ve heard involving both RICO and abortion protestors is when the National Organization for Women tried to use RICO in their Supreme Court argument. But the Supreme Court sided with the protestors on that and didn’t let them. Can you please provide me a url of the link to the legislation that was passed by Congress?
“The Democrats’ of the 110th Congress have demonstrated their disdain for freedom of speech in their endorsement of the so-called “Fairness Doctrine””
I don’t see how this issue relates to our “Anti-God legislation” discussion?
“When any person seeks to take away what our founding fathers deemed “inalienable” rights, thus rights granted by an Authority greater than and outside the realm of any earthly ruler or kingdom, that person could be rightully described as acting in a manner that was anti-God.”
I guess it depends on which God you think granted those rights. Since none of the major religions of the world assert the existence of inalienable rights, this statement gets a bit vague.
It seems to me that your goal is to actually have a United States that bases her laws on the Christian religion. Our founding fathers wanted everybody to be free to pray to any God (or no God) that they please. But they knew that keeping Church and State separate would make both of them stronger. If your goal is really to have the United States base her laws on the Christian religion (or any religion), you’re being very unpatriotic to the values of this country. If you’re looking for a country that bases their laws on the Christian religion, you might try moving to a country like Ireland.
Ireland’s main problem is deciding which form of Christianity to reference. Although this has caused a lot of terrorism in Ireland, you just have to accept that that is what happens when Church and State are intermingled. The stakes are very high and people have no problem blowing themselves up or killing other people in Gods name.
With all due respect, your claim that all of the founding fathers were Unitarians or Deists is a gross assertion. Not going to let you get away with that one.
Check out David McCullough’s John Adams, for example. Read Adams’ own words pertaining to his relationship to a God involved in the affairs of mankind. See also a couple interesting websites, http://www.adherents.com/gov/founding_fathers_Religion and http://home.aol.com/TestOath/deism regarding religious affiliations of other founding fathers.
I’m sure we could debate ad infinitum who were Deists, who believed what, etc. One has only to Google “founding fathers” and “religion” to find arguments pro and con.
Regarding your contention that the founding fathers came to the New World to escape tyranny is only part of the picture. In Jamestown and elsewhere, colonists sought new wealth. The Puritans, to whom you allude, did seek religious independence, but they would have found it almost laughable, were it not such a serious subject, that they trekked thousands of miles across the ocean and faced brutal living conditions — only to be denied prayer in public forums.
Prayer is still offered in the House of Congress and the U.S. Senate, among other hallowed halls open to the public. The founding fathers were not seeking to Clorox prayer and anything associated with Jesus Christ out of government institutions, they were seeking less government encroachment upon their lives — government, for example, which butts its nose into every aspect of life, government as nanny; government which seeks the dissolution of prayer in public quarters.
When government seeks to eradicate Judaeo-Christian memory from all public discourse, it is actually establishing a state religion — that of Secular Humanism — fraught with high priests, rituals, hymns, and sacraments.
It’s interesting to me that true Christians tolerate any and all kinds of prayers issued in secular, even government environments (see Hindu prayer recently offered in Congress), however secular humanists decry any type of Judeao-Christian prayer offered in their presence.
Seems like the world has forgotten that many of today’s charities like Goodwill and Salvation Army were begun by Christians. Many of today’s hospitals were begun by Christians. Scientific advances were introduced by Christians who sought to alleviate pain and suffering in a world around them. Many Christian missionaries have been martyred because they saw a need — a God-shaped void in mankind’s spiritual condition, which only Christ could fill (Pascal).
Not sure how we got to this point in time when Christians are considered Enemy No. 1 by the state. Probably because so many within the Church Universal have been occupied with trying to look like the world, they have missed the Church’s original mission in life: To glorify the Lord and tell others of the saving love of Jesus Christ.
Also, regarding kids who feel like they need to come up with fairy tales, etc, or their worlds will fall apart? Come on. Really? Kids can always find something to think about whether its God or the wart on their teacher’s nose. I don’t think a 2 minute quiet time could be likened to psycho scarring torture.
Just curious, have you had a bad experience regarding Christianity? I knew a coworker who was bitter towards the Church because his grand-dad was truly a bad apple who weighed over family matters like a dark cloud. His grandfather was a minister who probably preached love and forgiveness on Sundays, but didn’t display it the rest of the week. You don’t know me from a hole in the wall, so feel free to ignore this question.
Thanks again for your notes. “…Iron sharpens iron…” (Proverbs 27:17)
Much like it is required today, many of the founders said things in favor of Christianity or said prayers, not necessarily because that was their sincere belief, but rather to endear themselves to the majority of the people who would not have voted for an outspoken non-Christian. So, an outward expression of prayer to God, even invoking Jesus, should not be construed as definitively showing that such and such a person was a Christian. When some of my friends or family conduct a prayer before a meal, I show my respect by bowing my head, even though I don’t believe in such superstition. This shouldn’t qualify me as a Christian.
If you take a look at what our founding fathers actually said, you’ll see what they truly believed. You mentioned John Adams, he is a perfect example of what I mean. From http://dim.com/~randl/founders.htm:
Which reminds us of my original point: It doesn’t matter if the founding fathers were Christian, Deist, or Muslim. They made it clear that our nations laws should be separate from religion, that will make both the church and the state stronger.
True. And it is also distracting us from our main discussion about “Anti-God legislation”, which I still haven’t seen any links to.
Hahaha, that’s cute! I see you’re a fan of Ann Coulter. You should look up the definition of religion: (from Wikipedia)
By Ann Coulter’s definition, a basketball game is a religion. Heck, even a corporation is a religion.
And much like your “anti-God legislation” statement, you’re not being intellectually honest. Nobody is trying to “to eradicate Judaeo-Christian memory from all public discourse”. What they are talking about, is those of us who are trying to keep to the word of our founding fathers by keeping Church and State separate. Those Christians that are saying what you said above, they quickly turn hypocritical when people with other religious beliefs attempt to do the same thing (see Christian intolerance to Hindu prayer recently offered in Congress)…
http://www.idahopress.com/articles/2007/08/10/news/news2.txt
http://www.congress.org/congressorg/bio/userletter/?id=269&letter_id=1296166041
http://findarticles.com/p/articles/mi_qa3944/is_200011/ai_n8915209/pg_1
Again, all we (you can call us patriots) are trying to do is uphold the constitution and the beliefs of our founding fathers that Church and State shall stay separate for the sake of both. True patriots should decry any type of religious activity on the taxpayers dime. I think the Hindu prayer in Congress was a great example of the intolerance and hypocritical nature of Christians when it comes to State sponsored religion, thanks for bringing it up. Maybe it will help Christians see the reason our founding fathers wanted to keep Church and State altogether separate, without regard to any specific religions.
I don’t think anybody has forgotten that. People all around the world do great things and they don’t ask our country to make their beliefs the official beliefs of the state because they’ve done them. And they don’t discriminate who they hire based on their religious beleifs. My wife spent two years as a volunteer in Tanzania with the Peace Corps, the great thing about the Peace Corps is that they help people just because they want to help people. They don’t have hidden agenda’s like converting them to a religious belief, taking away their condoms, or trying to create state sponsored religions.
If a group of people who believe a flying spaghetti monster created the universe go and do great things for the poor and homeless, good for them – maybe I’ll donate to their cause on a tax deductible basis. But should we start making our laws conform to their beliefs? Does it make their beliefs true?
It seemed to me that the Hindu prayer in congress was psycho scarring torture to many conservatives. The Christian lady in the congress.org link above didn’t know how right she was when she complained about “a prayer she supports with her taxes.”
Think about why you disbelieve in the thousands of other religions in the world. They offer no more proof of their truth than your religion does – written scripture, stories, testimonials. Most people believe what they believe because of how and where they were raised. Most of the Christians in this country, if raised in Iraq would not question the Muslim religion like they do as Christians, they would take it in full faith because that is how they were raised and that is what everybody around them believes (not to mention the huge pressure to have that belief because of the entanglement between church and state).
Do you think that lady that complained about the “”Hindu prayer to open the congress that I support with my taxes!” knows anything about what Hindu’s believe? Probably not. Is she bitter toward Hindu’s because of a bad experience she had with them? Probably not. She’s just been taught by her Christian faith that believing in anything other than the Bible is bad, and this is a Christian nation.
I’m just like you, and that lady in Alabama – except I think the 1st amendment should apply to all religions. There is more than enough room for prayer in our country by people of any religion, it just doesn’t need to be done on the taxpayers dime.
I respect your beliefs and I understand that it is your wish to have all citizens of our country governed by the word of Christ. But I don’t have time to address any more of those red herrings. Let’s get to the point. Please only respond with actual “Anti-God legislation” next time.
What we’ve got here is a well fed internet troll. Their kind are easily spotted as they demonstrate remarkably consistent behavior patterns. Luckily for the casual internet user their behavior has been studied extensively since September 1993 and their sad existence is well understood.
In common parlance trolls have no life. They are socially clumsy and often smell bad. Their chronic inability to achieve normal social interaction forces them to rely heavily on the internet to achieve even a minimal level of human contact. However, they are generally so clueless and annoying that they must resort to flame baiting to get people to pay them any attention at all.
Despite their otherwise pitiful existence trolls have an uncanny degree of social resilience so the only way to properly get rid of them is to starve them to death. One can only hope that if enough generations don’t feed the trolls, evolution will simply weed them out.
Didn’t realize I had sidetracked the issue. Thought I had covered the anti-God legislation in an earlier email regarding God’s establishment of the family and that efforts to prevent the strengthening of, or to promote the actual damaging of (e.g. abortion, euthanasia), could be construed as anti-God.
I’ll get back to you regarding specific legislation — and, if you don’t mind, comments on your recent points of view.
Yeah, but I pointed out what a stretch it was to make that association and pointed out that “allowing” people to hunt and fish is also the killing of God’s creatures and could be considered anti-God by some. It’s irrelevant due to the fact that, as John Adam’s said, “the government of the United States of America is not in any sense founded on the Christian Religion,” but not taking away people’s rights isn’t considered anti-God legislation. There is no requirement that people get an abortion or get euthanized. It’s their choice and God would prefer to deal with the decisions they made using their own free will. Isn’t that what republicans are always (hypocritically) preaching… less government intervention in your life? (hypocritically, because government is always bigger when republicans are in control)
Using your logic, I could go on and on pointing out how republicans want to use torture on other human beings, how many people are being killed in Iraq under their legislation, etc. I, personally, don’t think God would agree with torture and killing. But I’m sure you would just want to argue that under your specific belief of how God thinks, God has no problem with torture and killing if good and honest Christians are doing it for a good and honest reason. Which, by the way, is the same reason Muslims have no problem with the things they do. In their minds, their God has no problem with good and honest Muslims doing it for a good and honest reason.
So please don’t give me anymore “could be construed as” bullsh*t.
I recommend that we keep comments to the point of the original post, “Past Averages Do Not Predict the Future”, or health insurance in Colorado from now on. Thank you.