As we dive headfirst into the unchartered waters of self-employment (surprise!… we’ll be talking more about this soon), we find ourselves faced with a few new financial considerations. Some aspects of our budget that were dictated by our various employers are now 100% dictated by us. For example, when our contract is up with our cell phones, we’ll likely be switching to a cheaper carrier since Johnny no longer gets a subsidy. The same goes for our health insurance. Something that we’ve grown accustomed to having taken care of and either covered at 100% or highly subsidized by an employer is now completely and totally on our shoulders. Insert grimacing emoji here.
So where to begin? Before, we typically had three fairly limited choices through our employers: a low-deductible choice, a high-deductible choice, and an HSA that often sat squarely in the middle of the other two options. Now the healthcare medical insurance industry is our oyster… yay.
At first, our (okay, mostly my) gut reaction was to go with a plan that sounded comforting, familiar, and that would put my anxious medical insurance heart at ease. That would be the easy solution, and Johnny looked into finding a plan that fit very snuggly into my medical insurance comfort zone (which I didn’t even know I had up until a month ago). Looking on our state’s healthcare exchange, Johnny found a nearly identical HSA plan with a fairly low deductible and out-of-pocket max with a decent network. Score! And then he told me the premium would be north of $1000/month. Uhhhhhh… f’real?
After doing hours and hours of research, Johnny presented another idea to me. It was something called a healthcare ministry. Just hearing the name had me feeling extremely skeptical. And then he started explaining it to me and I started worrying that my mostly mentally sound husband was losing his mind. After a half hour or so of me asking him questions, it started making a little bit more sense. A little.
I’m sure we’ll do another post diving into all of the specifics soon, but for now I’ll do my best to explain it how he did to me. Basically we’d pay a monthly “premium” of about $450 for our family of four to be enrolled in the healthcare ministry. Under their highest plan, any and all medical bills that cost less than $500 would be paid out-of-pocket by us. So we’d be on the line for basic checkups, well visits, vaccines, etc. We’d also be on the line for a $500 “deductible” for the year. But after we had paid out $500 for the year, any bill that exceeded the $500 price tag would be “covered” by the healthcare ministry 100%. The end. So where does the money come from, you might ask? The money that members of the ministry pay toward their monthly premium is pooled together to pay for other members’ medical bills as needed. It’s actually not insurance at all, but a giant non-profit that traffics money to and from members.
See why I was skeptical? It just sounded so… different. But I trusted Johnny’s hours of research and read some articles he had found that spoke to their credibility and legitimacy.
But despite all of this, I still had some concerns about how we’d make it work. If we paid for doctors visits completely out of our own pockets (rather than a small copay), we might avoid going to the doctor because of the higher price tag. I’d never want our daughters’ health to be compromised because we wanted to save some money. If we opted for the healthcare ministry, we decided that we’d put money aside each month just for those situations so it wouldn’t be a should-we or shouldn’t-we issue. We’ve also been asking our various doctors’ billing departments what we’d be looking at for typical visits if we moved to self-pay. We’ve been mildly surprised to find out it’s a lot cheaper than we assumed. Our peditrician offers 30% off all self-pay services and our primary care physician charges a $70 flat rate for regular visits. Knowing some of these numbers has also helped to ease my troubled mind.
Anyway, we haven’t made our decision for sure yet. But you can tell which way we’re leaning. In the meantime, we’ve got about a dozen appointments between now and the end of the month to maximize our final month of insurance with a capped out-of-pocket max.
Any insights, pros, cons, or other words of wisdom you’d like to share with us before we take the plunge into self-insurance-dom?