|
|
| CLINICAL
MIND > INSURANCE |
|
|
| |
|
|
|
| |
Independent
Health Insurance |
| |
|
| |
Self-employment does indeed come with a long list
of trade-offs and one of them is having to bear
the entire burden of buying health insurance.
When we have health coverage from an employer,
we are typically asked to pay a percentage of
the cost and perhaps some co-payments to receive
benefits and use services. This was typically
a relatively small amount deducted from your paycheck
($20-50, depending on length of pay period). But,
to use COBRA and buy that same coverage after
leaving to go into business for yourself might
cost you anywhere from $200-500 per month! And
while temporary health insurance can potentially
be found for 36 months, you will eventually need
to find a permanent solution to your health insurance
question. |
| |
|
| |
|
Like any commodity, good, or service,
health insurance rates are always cheaper when
plans are purchased in bulk. An employer, for
instance, might need to secure a plan that will
be able to cover 500 employees. Independently,
those same employees could indeed expect to
pay an average of $400 per month for health
insurance covering children and family members.
But, because there will be 500 enrolled in the
plan at once, the insurance company can offer
that same level of coverage to all members for
perhaps an average of $250 per month. |
| |
|
| |
The difference in pricing between
individual and group insurance policies is related
to the statistical probability of each person
having a major claim (though the amount varies
by company, a major claim is any that exceed the
maximum payout of services in any calendar year
beyond routine examinations and screenings). Depending
on the work environment and the industry type,
the odds of payout should be more consistent with
a larger sample size. By carefully structuring
rates and accounting for hundreds of variables,
a health insurance company can potentially make
more profit and thus offer a bigger discount so
long as their information and projections are
accurate. |
| |
|
| |
Essentially, one person might pay an insurance
company $400 per month for 12 straight months
and develop some dangerous but treatable cancer.
Treatment and medical procedures might well add
up to $100,000 with the policy holder only paying
in a total of $4,800 - on this policy, the company
is already down $95,200 and unlikely to ever see
a profit even they recovered and continued paying
premiums for another 15 years. |
| |
|
| |
But, with 500 people paying in an average of $250
per month, the company would collect $1,500,000
in premiums. If their statistics indicate that
only 5 major claims should be filed by employees
in the coming months at a cost of $100,000 each,
then the company would make a very acceptable
level of profits so long as the other services
were utilized as anticipated. Because larger groups
of people create larger sampling sizes and thus
a greater degree of statistical probability, health
insurance in less expensive if purchased in bulk. |
| |
|
| |
While the self-employed individual may not be
able to buy in bulk the way a larger employer
might, it is possible to find health insurance
plans that allow hundreds, sometimes thousands
of independents like yourself—enjoy the
advantage of buying in bulk to receive independent
health insurance. You are still a contributing
and participating member of a cooperative that
is buying health insurance—just not through
your employer. |
| |
|
| |
An independent health insurance agent (rather
than someone who is working for a specific company)
is probably the best place for the self-employed
to find the lowest rates using these cooperative
health insurance policies. As opposed to an agent
working for a specific company who naturally will
promote their organization’s products, an
independent agent will promote the policies that
are in your best interests - no matter who happens
to be selling them. |
| |
| |
|
|
|
|
|
|
|
|
| |
|
|
| |
|
|
| |
|
|
|
