Health Insurance For Loofiers!

[Hesh Breakstone]

This is a discussion that I have been wanting to have because frankly I am personally pretty excited about a change here in US law.

Although I know that some will be capable of making this discussion political I ask that you please don't.  Instead I wanted to relate my own experiences with the health insurance topic, Lutherie, getting into the biz, etc. and not be a shill for the affordable care act aka Obamacare.

When I left the stinkin desk job and wanted passionately to someday hang out my shingle and do repair/restoration work the one single issue that I could not overcome and find a solution for was affordable health insurance.

In the states our insurance tends to be connected to our employment and as such doing anything unconventional or as an individual leaves one subject to the wild, wild west of brokered individual health plans.  These plans often sucked.... did not cover much of anything, and cost a fortune as well.  And you could be cancelled, capped, denied for previous conditions such as being nuts like me.

But no longer and this morning I ventured onto the Health Insurance Exchange and purchased the very best plan offered here in Michigan for less than half it's retail price.  I have pre-existing condition(s) as well and every quote that I received in the past was north of $2,200 monthly....  Now I'm enrolled in a "gold" plan that has to cover most everything, can't be cancelled, can't be capped for just under $395 a month!

There is more too.  Because I can now solve my own health insurance problem we, our business is in a position to provide meaningful work to others as well.  There are five of us in our business.

As such for those who ever fancied going pro, severing the bonds of corporate America, the health insurance issue is no longer impossible to solve.

I'm wondering if others here are seeing this new change in US law AND the availability of quality, affordable health insurance as I see it which is as something that is a pretty good deal for Luthiers?

[Hesh Breakstone]

LOL!!!  Thanks Ernie and you made my day my friend!

[Ernest Kleinman]

My best advice hesh , is to follow the motto of the IDF, don/t get mad , get even. The best revenge in life is living well .Enjoy!

[David Collins]

I was in my early 20's, only a few years in to this trade, running a repair shop in Flint MI, when I had a terrible accident while back country winter camping in northern Michigan. Terrible head injury, 12 hours to get me to the hospital after emergency services had to cut down trees to get snowmobiles in to the woods to sled me out, ruptured spleen, torn nerves, broken skull, and a blood clot the size of my fist inside by the time I got to the ER. Lost part of the Wernicki an Broca's region of the brain, and although I was back to work in a few months i basically had to relearn my entire vocabulary to learn to communicate effectively again. With no family assistance in negotiating bills that were not covered by insurance, this didn't leave me in a good position to negotiate the 100k or so I was liable for, which all went to collections.

Fast forward a few years, with my credit destroyed I could not pass a credit check for even the most basic apartment or even trailer rental, and ended up homeless with a motorcycle and a backpack and tent, bathing in the Muskegon river and packing up camp each morning to go to work every day. When it got colder I reluctantly accepted offers to stay with friends, but did not want to be a burden. Unfortunately affording rent was difficult even if I could pass credit check, because although I was working 40+ hours a week my paychecks we're being heavily garnished for ambulance bills.

The vast majority of these bills were eventually written off and not payed by me, which of course means that they were paid by the rest of you. The hospitals and emergency services still need to recoup their costs, and so it gets padded in to everyone else's medical bills and to some extent their taxes. You all still paid for my services, but in a much more expensive way after adding on all the bloated administrative and accounts receivable services. Had a system like the ACA been in place then you may have still been paying some of my costs through insurance subsidies I would have received with my income at the time, but it would have been much more economical and fiscally conservative (by the literal, not political definition) and lower cost to pay it up front rather than the roundabout cost recovery method at the time.

Fast forward again, and I have managed to recover financially, have a family, own a home, and am not relying on any direct public subsidies (I still use the roads and buy milk, gas, etc, so I can't say no subsidies at all) and run an established guitar repair business. When my wife, who is a writer, left her employer to work freelance we easily could afford to pay standard insurance premiums with no help from any subsidies. Unfortunately we were denied outright by every insurance corporation we applied to (though they readily took our few hundred dollar application fees) due to preexisting conditions. Although we were both successful as independents, one of us eventually had to go back to being employed by a larger company in order to keep our family insured, which my wife was able to do and I was able to keep my business open.

With the ACA in place, we are finally able to pursue our goals without facing the concern of losing our insurance, which is not an option for us with my wife and daughter's needs. It's still a far cry from ideal, but it's at least a palatable approach now that we can pay in to (without any subsidies for us) a reasonably larger insurance pool without being denied coverage outright. Hopefully it's only a small step toward a more reasonable solution, but I suppose asking for obviously sensible in our current social political climate is out of the question. I can't see how any small business owner or anyone self employed could be anything short of relieved at this change.

[William F.Eden]

I am sorry to hear about all of your problems with  Health coverage in the USA. And I don't agree with what some are saying about health care in Canada. My EXP. hear has been very good I can go see a Dr. anytime I like or to EMR. ROOM .Also get my Medications free after the first $100.00 ayear at no cost to me as well as any operations.But if I travel to the USA it will cost me $5000.00 for Insurance for six months and I will not be to sure if they will pay if I do need it even then.P.S I would like to invite all my fellow Luthiers to come to Canada to enjoy what we have hear only that you would all starve to death working as a luthier like the rest of us.  Good health to you all .Bill............ 

[Ernest Kleinman]

Bill, which city  and province are you in.? Doesn/t healthcare vary from province to province and one/s location.Or , is everything  now fairly uniform.My bad experience was in van  bc circa may 1989.

[RETROROD]

To be quite honest, I have not read most of the replies on this....I could see which way the wind was blowing, after my first reply.

I really don,t think that I will change anyones minds with my 'drivel'....however, I have read the word 'free' in many of the replies that I read. My brothers, sorry to tell you, but nothing is 'free' ! You, me, and everyone is paying for these 'services' through taxes....whether it be income, sales, property or value-added, etc.

This is important.....there is no free lunch!.....someone....???.... is paying.

And also ....there is no greater 'monopoly' on services rendered than those by government! Think about it. Who is in competition?

I am not 'taking sides' with parties. I believe 'both' sides are to blame and in concert for complete control of our personal well-being.

By my nature, I relate to the conservative side of issues, as I believe in personal control of my personal and family's well-being and not wanting 'other men' to dictate what is 'right' for me and them.

 

Giving the government control of healthcare allows them to 'dictate' your personal life as well as charge you the sum of what they 'think' you can afford!

 

I have really 'outgrown' the "nanny state".mentality!

"Teach your children"? ......wasn't that a song!

Perhaps we were taught wrong....with Gov'ment education?    eh!

[David Collins]

Of course nothing is free, and I don't think many folks think of it that way. Our army isn't free, fire and police protection aren't free, ensuring that we're not being fed E. coli contaminant red horse meat as burgers or melamine enhanced milk isn't free. They all come with a cost, either through taxes or increased consumer prices due to regulation. The need is universal enough however, and the scope so wide, and the risk of leaving it entirely up to the good will of unregulated profit driven industry that as a society we have generally agreed that it is best funded and served by the community as a whole, i.e., government.

As I see it, we have two basic (admittedly broadly generalized) choices.

1) We can all chip in and make sure health care is available to everyone who needs it.

2) We can turn those in need of health care who can't afford it to suffer and / or die.

That's it. There are plenty of subcategories under each of these headings, but ultimately those are the two options we have to choose from. Now if you favor option two (which I dread to think anyone here would), then there's not much to discuss. If you don't think it's fair for a hospital to turn away a trauma patient or sick baby who cannot prove their ability to pay up front however, then it is necessary to have a sensible discussion on the most ethically and fiscally responsible way to arrange option #1.

There will always be people who cannot afford their health care. If we are unwilling to sink so low as to let them suffer an die, then we have to some how or another pay for it collectively. Are we all agreed? Okay then, options...

A) We can continue the current system of leaving those unable to afford insurance or denied coverage for preexisting conditions to avoid regular check ups and preventative care, and rely solely on expensive emergency room visits, which they will not be able to pay for. Providers may be able to recover some of these costs from the patients through garnishments and the like, as patients loose their homes and ability to pay other bills which costs us economically in other ways, but most of it they will never collect. They have to recover it somehow, so rates are padded for patients who do pay, and some assistance comes from government sources, i.e., our taxes. We still pay for it, but in a much more costly and expensive way after adding in all the administrative costs.

B) We could move toward a socialized medicine program, where there is no insurance middle man skimming in between payment and care, and all medical providers are government employees just like police, teachers, military, etc. Every citizen receives the care they need, and we all pay for it according to our ability to pay, which tends to fairly correlate with our own economic benefits we are likely to see from a healthier and more economically comfortable population (you know, where people aren't scared of loosing their home if that lump comes back). Those who pay the most may not benefit the most physically, but rather economically. But that's not going to happen.

C) We could adopt a single payer system, which differs from socialized medicine in that service providers are not government employees. There are still individual hospitals and doctors and pharmacies, but rather than dealing with a plethora of different insurance middle men to handle the billing, it all gets paid from one community pool. The competitive market would still be alive and well as providers competed for consumers business. Consumers choice of providers could also increase, as with a single payer network I would no longer be limited to choose from my already limited Blue Cross or Aetna or Humana network of providers they've negotiated with. Administrative costs would be drastically lowered, and bargaining power increased by the size of the pool. There are many ways in which private insurance could still try to compete within this market, but that's another discussion all together.

Or option D) The ACA in it's current form. No public option, no single payer, no government run service providers. Everything is pretty darn close to the same as it used to be with providers and insurers operating independently. Big Brother is no closer to standing between you and your doctor than he was last year. Insurance companies still get to take a healthy cut between what we pay in, and what makes it to the providers in the end (with a few more limits and regulations working in our favor). There are no government death panels, and Uncle Sam is not going to limit your choice of doctors any more than before - that's what your private health insurance company always has done, and will continue as business as usual, just like they decide when it's time for you to check out of the hospital or end rehabilitation services or switch to a cheaper medication. That's all private insurance Big Brother, not government, just like it has been for decades.

There are a few key changes though. One is that everyone HAS to have insurance. If you don't, then it hurts us all when you can't pay your bill and we have to absorb it in the most expensive way possible. It hurts us who do pay because a less healthy population is a less productive and prosperous economy affecting our GDP. It hurts us because when you loose your home and end up on the street our property values decline, and we have to pay police to arrest you and pay for your jail time when you get desperate, or pay for homeless shelter expansions through local government, etc. If you don't have health coverage it hurts us all, so everyone is required to have it now.

It's of course an unavoidable fact that not everyone can afford health coverage, and this sucks. Still, it's a fact, and we have to find the most economically effective way to deal with this. Since single payer isn't goin to happen right now, the next best option is to require everyone pay what they can, and the rest of us will (perhaps grudgingly) pick up the rest. No, we don't want to, but short of the economic and ethical problems with just letting people suffer and die, we're going to have to do it one way or another. At least it's cheaper and more beneficial to our GDP to just pay it honest and forward with insurance subsidies up front than through padded bills to make up for provider losses and economic effects of an unhealthy workforce.

To me this all sounds like a very conservative health care plan. Not as cheap as socialized or single payer, but preserving free market spirit with the least regulations and subsidies required to minimize the final costs compared to current option A after all true economic costs are factored in. In fact, it IS a conservative plan, both economically and philosophically. It's basically what Nixon proposed in 1974, what the Heritage Foundation came up with in 1989, what Hatch, Grassley, and Gingrich introduced and / or supported in the 90's, and Romney implemented in Massachusetts. It's a through and through conservative free market system designed to minimize the cost that those without insurance leave on the rest of us who do have it. It doesn't eliminate the cost, but since that is essentially impossible (even leaving those who can't to suffer and die comes with economic costs), this is the next best option. Not the best in my opinion mind you, but the next best.

[William F.Eden]

IN Ontairo I don't know any thing about the rest of Canada.BILL...........

[Hesh Breakstone]

Thanks for that Bill and I know Americans who do travel to Canada to receive health care that they cannot afford here.

Another big issue for the right in the US is border security.  Although this applies to any border the southern border has always been the biggest concern.  It's pretty scary to think that some undocumented.... nanny might sneak across and find some willing American family to abuse them, work them to death, etc.

But more recently border security has had new meaning in that we want to stem the tide of sick Americans traveling north to benefit from Canada's excellent system....;)  Makes me wonder how many undocumented Americans might already be in beautiful Canada...  If this is the case please excuse us in advance and it's also likely that many of us are hiding our birth certificates from view...

Thanks for your thoughts Bill - much appreciated!

[Hesh Breakstone]

i would like to thank everyone for your very valued participation and pretty good manners too, considering how passionate many are in respect to this issue.

I had a lot of contact with folks directly since I started this thread via email, personal messages on other forums, and even phone calls as well.  We even heard directly from Murray today as unpleasant as he can be.... :)  What clearly seems to be the case is this:

Working Luthiers in the trade are benefitting and welcome the ACA.  Our friends who like to hang with us and share our passion for what we do but have other day jobs are as divided as the US population.

Most Luthiers, not all, don't make a lot of money.  An understatement.  Some of us do this anyway because we love it and have always had a passion for musical instruments and in my specific case the guitar.  For us the ACA directly addresses a very common problem for us being independent business folks and that is truly affordable health care.

It's unfortunate that to some having others benefit, perhaps even have their lives saved, has to be a political issue.  I also feel for those who are losing their current plans, substandard as they may be.  I'm not a fan of being told what to do either and can completely relate.  

When I am interested in something my way is to go off and read all that I can about it.  I have actually read the entire 2,200 page ACA and I have to tell you it was the very worst read ever for me.  I've also spent hundreds of hours now researching other sources, was one of the first on the web site and have been there multiple times daily since it's inception.  I actually believe that I now understand this stuff.

As such for those losing plans it's also required of the companies that you currently have that they provide you with alternatives.  Unfortunately for some of you the alternatives will be real insurance, not health saving accounts where someone else holds YOUR money and the policy is only as good as how much you have populated your HSA with.  Instead you will be offered plans that actually pay for something if you get sick unlike what the highly partisan publication Consumer's Reports has appropriately dubbed "junk insurance plans."

You also can use the marketplace/exchange like I did and in many cases will get subsidized (again since much of your lives is already subsidized like it or not).

Something else new in the ACA is that insurance companies are now regulated and limited to making no more than 20% on the rest of us.  This year millions of Americans received unexpected rebate checks because their insurance company made over 20% and by law is now required to rebate the difference to customers.

Regarding the OTC medications and tax pre-tax income it's true that in the past, through 2010, you could use your HSA to purchase OTC stuff with pre-tax dollars which may reduce your taxable income.  But I have to wonder, especially for those who claim to be healthy as a bull, how much OTC stuff (Tylenol, etc.) can be consumed in a tax year...  Or, more specifically, I'm not sold on the idea that anything is really being lost here of any consequence.  I take a lot of Advil but I doubt that I consume more than $50 of it annually.

Anyway again thanks and I especially appreciate the civility.  Many thanks to Frank too for letting this one ride regardless of the potential....

[Mark A. Kane]

Please take my comments in the manner in which I intend them, that is to say, with the utmost respect for your desire to expound on the ACA. But I couldn't let your conclusions go without responding.

"I'm not sold on the idea that anything is really being lost here of any consequence."

To you, maybe. But the reality is you haven't a clue what the loss means to those who actually experienced it. I'm guessing you have no personal experience with how an HSA worked in the real world before Obamacare. 

"Unfortunately for some of you the alternatives will be real insurance, not health saving accounts where someone else holds YOUR money and the policy is only as good as how much you have populated your HSA with".

I don't know how else to express this so I'll just be direct: that statement is utter nonsense and easily debunked. You really have no idea what you are talking about in this regard.  

I'm reminded of a saying my father used to repeat. "Often wrong, but never in doubt". 

Now, back to reviving a 65 D-18. Cheers!!

[Hesh Breakstone]

Hi Mark and no problem and I also appreciate your comments.

So what do I have wrong about Health Savings Accounts?  It's very possible that I do have it wrong and if so help me please get it correct?

My understanding is that a HSA is a savings account (yours but managed by an insurance company) where you populate it with your own cash.  This cash is considered by IRS rules as "pre-tax dollars" thusly and possibly depending on the extent to which you set aside money for the HSA the HSA can reverse "bracket creep."  More simply put since this stuff is kind of difficult for me to describe anyway, the money you place in your HSA is pre-tax dollars and can reduce the amount of income tax that you pay.

What changed in terms of how HSAs are regulated actually is pretty old news.  The old rules remained in place through 2010 and you could write off OTC meds effectively by using your HSA to pay for them.  Not really a write off in any sense so that's the wrong term but you could, through 2010 use your pre-tax HSA dollars to buy these things.  As such your HSA reduced your taxable income by being pre-tax dollars and the allowable expenses for HSA back then permitted OTC meds.

Starting in 2011 it changed as per the ACA.  OTC stuff is no longer included in permitted uses for the pre-tax dollars in an HSA.  However.... if you get a doc to write a script for an OTC med I think what I read is that up to 80% of the cost may qualify for HSA use.

It's true that the rules for HSA eligibility narrowed to not include OTC stuff (perhaps without a script) but this change has already been in place for all of 2011, 2012 and this year as well.  This is three year old news and not something that is being lost - it's been gone for three years.

I now will have an HSA too and I can use it for my co-pays, co-insurance etc so it will reduce my taxable income too while permitting me to get the benefit of using my own money.... it's by no stretch actually insurance... for some of the allowable and legitimate health care costs.

Seems to me that HSAs can benefit folks looking to reduce their taxable income while still getting some value for their money.  If one can live with the idea that this money is "earmarked..." (pardon the use of a Washington term... ;)) for only allowable health care expenses it can be a good deal.  

Many of the plans that are being cancelled and replaced with other alternatives that HAVE to be offered to people being cancelled had HSAs and perhaps a high deductible catastrophic plan.  This is a two part offering that offers two very different things.  The catastrophic plans may be noncompliant these days because they only kick in when things get really dicey and may not pay for much of anything anyway.  The HSA attached were and are not insurance as per the description already offered here.

You can still get an HSA, I did, but it does look like for the past three years and going forward OTC stuff is either too big a hassle to use the plan for (because of the need for a verifiable script from a doc) or just no longer eligible.

Here's a good link if anyone wants to read about how an HSA works:  How A HSA Works

Here's another good read about the cancellations and although you may have to hold your nose because it's a progressive site the information provided is indeed valid:  Real Story...

So Mark where specifically do I have this incorrect?