Uninsured by choice? Are they nuts?

Declining coverage offered by your employer can also prove costly down the line, planners say.

For one thing, if you decline coverage and then lose your job and decide to buy your own insurance, that gap in coverage might make an individual plan cost much more, says financial planner Taylor Gang of Evensky & Katz in Coral Gables, Fla. And at that point, any pre-existing health conditions you have could be excluded from coverage.

A deadly gamble

Going without insurance can prove devastating to more than just a bank account. It can be fatal if the uninsured ignores nagging health problems, as was the case with Jeannie Kaiser's brother David.

After dropping his insurance, the Ohio barber ignored pain and swelling in his legs for almost a year because he was afraid of the cost to treat it. When he died of a heart attack a year after the problem began, the coroner said he had peripheral arterial disease, a treatable condition that ultimately caused his death, Kaiser says.

"I am convinced he would be alive today if he had insurance," she adds.

A 2007 MSN Money-Zogby poll found that nearly 25% of people surveyed had delayed or forgone medical care because it was too expensive.

Going bare is especially foolish for older people and families, wealth experts say, because of the greater need for care and medications during later years.

"Fifteen thousand dollars for a surgery can be really challenging for a family," says Kathy Longo, a certified financial planner with Accredited Investors in Minneapolis.

A less expensive compromise

There are options, Longo says, for people who think their employer-provided coverage is too expensive. Many insurers now offer high-deductible plans that carry lower monthly premiums and are designed mainly to protect policyholders from major illnesses, injury or other expensive medical events. High-deductible plans can be combined with tax-free health savings accounts to pay for the deductibles, which can run from $2,500 to $5,000. That's what Longo arranged for one young corporate employee to save a couple of hundred dollars a month.

"It does make sense to look," especially if you are paying a lot for coverage, Longo says.

The bottom line, analysts say, is that you might as well take your employer-sponsored coverage, because you are paying for it in your compensation package. And that's money you usually can't get back.

Just ask Steamer. When he decided to reject coverage, he asked Lowe's for the dollar amount it was paying for his health care (in addition to the portion he would pay himself) in cash. No dice, the company said.

For those of you who insist on going bare, here are five strategies for keeping medical costs from dragging you under:

• Act like a healthy person. This should go without saying. Do not engage in risky behavior. Get regular exercise, eat well, maintain your weight and get a yearly checkup. MSN Health's Diet and Fitness section is a good place to start.

• Seek out health fairs, clinics and other affordable-care alternatives. For more information about these options, see "A survival guide for the uninsured."

• Shop around for care before you get it. If you need a nonemergency procedure, check out average prices on Web sites such as Vimo and Health Grades. Ask what Medicare and Medicaid pay. You can probably negotiate a price somewhere in the middle, says Timothy Cahill, a Kentucky health care consultant.

• Bargain down your emergency care. If you do have a sudden illness or injury that sends you to the ER, try to make a deal with the hospital. Most will whittle down a bill if you offer to pay cash. And don't take the first "uninsured" price the hospital quotes you. "Most providers write off 50% to 70% of all patient-responsibility dollars," Cahill says. And they'd rather not spend the money to keep chasing you. For more on negotiating, see "5 tips for haggling over medical bills."

• Pad your emergency fund. With no health care coverage, Longo says, it's more important than ever to sock away three to six months' worth of salary, just in case you need emergency care. See "Save your emergency fund for the real thing."

Published Oct. 31, 2008

< previous |  1 | 2 |