Who needs a doctor when you can get a cake shaped like one?
Recently I talked to a married couple—let’s call them Susan and John—who are struggling with health insurance. Specifically, John doesn’t have any.
Why, you ask?
John is a student with no employer to provide health insurance (and the school doesn’t offer it). Susan works for a small business and she has coverage for herself. She pays about $160 out of pocket every month for that. But if she switches to family coverage to include John, the out-of-pocket cost leaps to nearly $800. I don’t have a firm idea of what Susan and John make, income-wise, but I’m guessing it’s not enough to make $800 seem like small change.
John called a health insurance company to inquire about individual coverage, but he was told that as long as his spouse’s plan offers coverage, he can’t buy a plan on his own. Fail.
Could that be right?
I had a long chat yesterday with a gentleman from the New York State Insurance Department. And sure enough, companies are allowed to deny coverage if someone is eligible for comparable group coverage through an employer. (In this case, Susan’s company.) Not all companies do this, necessarily, but the company that John called does.
So I asked: If John calls other insurers, he could find one that will cover him?
The answer: Sure, but there’s almost no chance that he’ll find individual coverage in New York for less than the $640 additional a month it’ll cost to include him in Susan’s plan. New York state insurance plans are apparently required to provide coverage of such high quality, they’re all tremendously expensive. There may be a few companies offering hospital-only plans with limited office visits, but John will have to do some digging to find them.
The ironic part is that they got married last summer. So whereas I recently wrote about a woman who’s willing to marry someone for health insurance, these two joked that maybe they should get divorced.
Oh, and just so you know, Susan and John are both in their 20s, in great health, with no children, and no pre-existing conditions. Something’s definitely wrong with the system when these two people can’t afford health coverage.
What’s frustrating about this is that experts say our health insurance costs (as a country) are so high in part because young, healthy people are opting out of the system. But here’s a young, healthy guy who wants to opt into the system, and he can’t afford it.
Got a health insurance tale to tell?
(Cake courtesy of Sweet Creations on Flickr.)
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By: Who Needs Health Insurance, Anyway? « Her Two Cents Insurance just to Me on March 4, 2010
at 1:54 pm
I faced a similar situation when I graduated college and moved to a new state. Not great as a long term solution, but I purchased a “catastrophic” health insurance policy. I figured if anything horrible happened, my family could cover the $10,000 deductible. Sounds like a lot in your 20′s, but better than the $200,000+ bill that will show up if you have a heart attack or something else “catastrophic!” The premiums were low and I was able to sleep at night.
Best of luck!
By: Will Whitaker on March 5, 2010
at 9:00 am
Will, thanks for your comment. The right kind of catastrophic policy would certainly help, here. It’s my understanding, however, that those sorts of policies are few and far between in New York. So in this state, that’s less of an option.
By: Kate Ashford on March 5, 2010
at 9:39 am