Category: bootstrapping

If your employer pays for part of your health insurance premiums, you may be one of the lucky ones who can ignore the turbulence in the health insurance market.

That’s not me, though. I live in the United States, and like it or not, I’m forced to participate in the whacky health insurance system that we have here. I’m self-employed. Last year, I was paying about $5000/year for health insurance premiums. I was on a high-deductible plan that I had bought directly from the insurance company. I’d started on it before the ACA came into effect, and never tried to move off it.

And then, last year, I moved to a new state. I’d estimated that my living expenses would go down if I moved. I knew I’d enjoy an increase in opportunities for outdoor activities, which would make me happier. I had some trepidation about what my new health insurance premiums might be. However, I decided that it was not an option to continue to live in one state for the rest of my life simply due to uncertainty about health insurance. I pulled the trigger, and made the move.

In the ACA, a move to a new state is called a “qualifying event”, and it lets you use the health insurance exchange to buy a new plan. During the search process, I learned that my income was so small that I qualified for Medicaid, and that I wouldn’t have to pay any premiums at all! It was galling, since I don’t think of myself as someone who needs Medicaid. However, I’m also not someone to pay for something that I can get free of charge. So I went on Medicaid.

During the course of this year, I picked up some freelance work to help bolster my income (unfortunately, my business is not even “ramen profitable”, and I do freelancing to pay my bills). Apparently, I am not a shrewd enough business person, however. I did enough freelance work that my income disqualified me from Medicaid. This meant that I was tossed off Medicaid mid-year. Getting tossed off Medicaid is also a qualifying event, so I went searching on the exchange again. “Fortunately”, I’m still making such a minimal income that I qualify for tax credits that pay for almost all of my health insurance premiums. I put “fortunately” in quotes because I don’t think it’s fun to live on approximately $20K of income per year. I’d rather make plenty of money, and have to suffer with paying the premiums myself. But that’s just the way things are going for me right now.

So why am I writing about health insurance premiums? If you live in the USA, health insurance premiums can make or break your plans to bootstrap a business. You can do all kinds of things to reduce your cost of living. Get one or more housemates. Eat ramen. Buy your clothing from thrift shops. Participate in the “gig economy”. However, you have very few choices when it comes to health insurance. You can refuse to pay into the system, and run the risk that you might incur enough medical expenses to bankrupt you (or, possibly, to even wind up killing you). Or you can choose a plan with a high deductible. This is what I’ve always done, but even those plans have become quite pricey. As an example, I’ve now bought into a plan that covers me for the next year. The annual cost will be almost $8000, without taking into account tax credits. And that plan has a deductible of about $7000.

I don’t like the health insurance system in this country. I don’t like that health insurance is heavily linked with employment. I don’t like that my health insurance plan has to change when I move from one state to another. I don’t like that even though I’ve been covered by health insurance for most of my life, I may incur huge expenses if I’m unlucky enough to have an accident or become sick during a brief period when I’m uninsured (and I’ve never been uninsured intentionally – it was always a move or the recent Medicaid fiasco that caused me to become uninsured for a short period of time).

Single payer is the way to go. I’m tired of hearing about how larger companies have more bargaining power with health insurance companies, and that this is why small firms have such high premiums.  If a large corporation has bargaining power, then how much more bargaining power would the entire population of the US have? Oh yeah, and I’m also tired of having my health insurance options decided by people who are disconnected from the health insurance reality that faces less privileged members of our society.

If we can get everyone covered by a single group insurance plan, I’m betting that everyone’s rates would go down. I think the cost of healthcare in this country would go down as well. I don’t have proof, except to point to how much better it works in numerous other countries. The US population has been comfortable ignoring the fact that many less well-off, self-employed people have been screwed by the tight link that formed between health insurance and employment during WWII. As more people lose their full-time jobs and start working in the crappy gig economy, it’s clear that something has got to change. It is time to cut the cord between employment and health insurance!