Fatboy Discusses His Health Insurance

Some people have asked me in comments and via my contact form about my health insurance, so I thought I’d put my story here for everyone’s benefit. To this day, and I imagine forevermore, my article: Fatboy’s Take on the Healthcare Reform Bill will remain one of the most popular pieces on here. Things to keep in mind regarding this information:

• I live in Florida
• I’ve never been on disability anything
• I’ve never had a lapse in health insurance coverage

I’ve been on COBRA insurance several times in my career while switching jobs and had an individual policy with the company after I decided to convert it once before. We’ve done it again, so now I have a $5M policy with the same insurance company I’ve had since 2000, but my lifetime limit has reset every time I go onto a company plan and back onto an individual policy. We’re at about $60k so far – no sweat – but going back to my first insurance policy, I never gave any of that any thought.

What is COBRA?

I just realized that I have some Brit and Canadian friends who may have no idea what I’m talking about. COBRA is a gov’t law that says that you are guaranteed to have continued health coverage with your old plan after termination with a company (unless you get fired with cause, I believe) as long as you have worked there for 12 consecutive months. That also earns you a “certificate of continuous coverage” that is necessary to avoid periods of non-coverage for pre-existing conditions. There is also something called HIPAA that guarantees your acceptance into a health plan regardless of pre-existing conditions because you have the certificate and prior coverage.

My insurance history

My first insurance policy was with Cigna when I was with a hotel chain doing call center work. My primary care doctor and my CF center were both in-network, so no problem. I never had any issues with them in 8 months there, nor on COBRA for two months.

My second policy was an Aetna HMO with my new company, and it was super-cheap – something like $40/mo through pre-tax payroll deduction. I was at that company for 16 months before it fell apart at all its seams and I went on COBRA again, to the tune of $100/mo. I was able to get a new job in 3 months, but their insurance made me really nervous. It was a small company of about 35 employees and the premiums were more and something just didn’t feel right about bailing on my COBRA, so I converted that policy to an individual policy and continued to pay $100/mo. The next year it was $210/mo. The next year it was $320/mo… can you sense the panic?

About this time, I had my last sinus surgery to date and I was missing a lot of work because I worked in a very dusty and physical environment. My premiums were taking up nearly all of my income. When I landed my big “Corporate America” job in 2005, I jumped onto their insurance after I knew my job was secure enough. That saved me darn near $300/mo by that point because my premiums were up over $400/mo. The second nice thing is that it was also an Aetna HMO, and the co-pays were a tad lower than I had been paying.

I was at that company for 3 years and then went onto COBRA again when I left, only we made a bad, bad mistake a few months later. You’re guaranteed 18 months of COBRA, but we neglected to turn in our paperwork with my former company to stay on the plan, so we were suddenly kaput! No insurance, and I was just 2 months into starting my new company.

Thankfully, this is where that HIPAA comes into play again and we had 30 days to get a new policy, so we filled out the paperwork with Aetna to try to get darn near the same thing that we already had, and it went retro-actively to the date of previous termination of coverage. We had a snafu with getting them to disable the pre-existing clause because I had the certificate on file with them, but things kept chugging away. A few months later, Beautiful decided to use her company’s benefits to get her insurance cheaper because they were simply doubling my premiums to cover her at this point.

Fatboy’s tips and warnings

Whatever you do as a CFer, don’t miss your premium payment! It’s better to lose your house, car, and everything you own than to lose your health insurance, because, unless you get another job with corporate benefits, you’re toast as far as being insurable on your own. Of course, getting that job is an option – go get ’em tiger! When you are looking to switch from COBRA to your individual policy, look for an HSA-eligible plan so you can use tax-free money to pay for medical stuff. That was a mistake we made, but oh well. It costs us a few extra hundred a year, so it’s just a mental annoyance to me that I didn’t know about it earlier.

—

You’re not going to get me to say that I think insurance companies are evil, because I’d say Medicare and Medicaid are far more detrimental to society’s health than private health insurances, but I’m also no unaware that there are bad companies out there. People get rejected for things all of the time, but that has not been my case with Aetna. For what we spend on premiums, co-pays, and out-of-pocket annual deductibles/limits, we are still getting a heck of a deal…

… a deal that I’m willing to work my tail off to out-earn any premium increases they may be sending our way next year.