Health Care Solutions For Real Life
"Share Your Story" is a regular feature of Covertheuninsured.org that asks readers to share a personal story about a problem due to the lack of health insurance. Unfortunately, the column stops short without giving a response that will best address the current crisis. MedSave.com, a provider of low cost and temporary health insurance, steps in to offer solutions through OnlineAdviser.
Original story posted at http://covertheuninsured.org/stories/index.php?StoryID=37
Story #37 Maureen Adams of Pacoima, California lost her health insurance following a divorce more than 15 years ago and had not seen a doctor in more than a decade before she started getting regular screenings at a community clinic. She has been employed as a fitness instructor for more than 12 years. She has no health insurance and no regular physician but lives in fear of medical problems that run in her family history.
OnlineAdviser: The problem here is borderline poverty, not health insurance. Maureen is facing two equally serious financial obstacles: post-divorce financial situation and low income profession. California actually has plenty of widely available and reasonably priced health insurance policies for individuals. Finally, it is important to consider that the overall cost of living in California is higher than most other parts of the country. This cost is reflected in all three of the largest types of personal expenses: 1) housing, 2) transportation and 3) healthcare. A person might be able to afford decent health care on, for example, a $2000 per month earnings in the mid west, bit this is highly unlikely in California. Too often we tend to cover the first two and ignore the third. All three expenses must be considered equally in order to achieve lifetime financial stability.
The divorce is ancient history for Maureen now but it is crucial for readers to know that health care planning should always be included as a top priority in every divorce proposal. In the same way that you would not consider a settlement that caused you to drop your auto insurance, nor should you consider dropping your health insurance following divorce. California laws make it easy for an ex-spouse to continue coverage simply by paying the premium. Attorneys generally do not consider this point since they are more concerned with following legal procedures for splitting current assets and liabilities whereas health care issues are future liabilities. But any well-qualified divorce advisor places health care near the top of the list of considerations when planning the settlement. This is why is is just as important - sometimes more important (for example, in a collaborative divorce mediation) - to have a good financial adviser on your team as a good attorney. This discussion makes it seems easy; it is not; recently divorced women are at risk for years of near-poverty standard of living with less than adequate heath care coverage. This is not a function of the health care field (that is just as affordable and available s before the divorce) but the fact that divorce poses an enormous economic stain on individuals and society overall.
The important point for purposes of this article is to draw the distinction between financial hardship caused by divorce and those caused by the health care system, health insurance pricing or coverage.
Fitness instructors are typically treated as independent contractors, meaning that each instructor is essentially operating their own small business. Unfortunately, there are few opportunities in this field for an instructor to differentiate and expand income to the point of moving into a comfortable level of income. The hoards of recent graduates entering the field in recent years have made fitness trainers have become a low wage commodity to most fitness centers. In addition, not all fitness trainers possess all of the skills necessary to run their own business including marketing, advertising, image development, client management, budgeting, scheduling, accounting, taxes, (and in come cases) billing and collections. The end result is that the majority of the nation's fitness instructors who rely on this as their only income are living only one step above poverty level. Very few fitness instructors are able to combine all of the necessary ingredients to develop a thriving practice.
Fitness instructors can usually deduct the cost of health insurance from their taxable income even if they do not itemize expenses on their federal income tax return. This is referred to as an "above the line deduction", meaning that it benefits all self-employed people, regardless of their personal tax situation.
General Financial Planning
Maureen should make some changes a priority but this will not mean a dramatic change to her health care plan. She needs to find some way to boost income and/or reduce expenses so that 10% to 15% of her gross income, (or about $200 to $300 per month) to begin to build a financial future. Part of that brighter future includes assurance that she can survive a catastrophic health problem. The routine screenings at a community center are an excellent way to access for routine care. Free or low cost health care services like these that do not involve insurance companies are clearly the way to go for many people like Maureen. The ideal situation of having an annual exam with a personal private physician is a great ambition, but it may be out of reach for many people at the lower end of the economic scale. Screening services fill a large part of the gap.
Maureen needs to have the funds available for when a serious medical situation does develop so that she can access California's great health care system. She can only do this by changing her current financial habits. Unfortunately, our capitalistic society dictates that if you spend every dollar of current income on current expenses, there is no real possibility of improved economic condition in the future. The only path to improved financial condition for most Americans is to keep expenses at a lower level than income. That includes health care. This is far easier said than done for someone like Maureen. Change may take years, or in fact, may never come at all.
Health Insurance Choices
MedSave.com offers a number of low cost health California health insurance options at http://www.medsave.com /low-cost-health-insurance-listing/ca.htm. The following possibilities are listed in order of price, ignoring any other considerations for now. The lowest full coverage plan would start at about $85 per month for a high deductible short term major medical insurance ("Secure STM Lite") and about $140 for the combination of renewable ValueHealth and ValueMed plans. Celtic Insurance "Basic Health Plan is also a good option at about $170 per month and California Blue Shield offers a popular Health Savings Account qualified insurance plan that is popular with self-employed individuals at one step higher price. (Prices may vary with age, address and other factors; we estimated the rates for Maureen for this article). each of these has advantages and disadvantages, so the options should be discussed with a qualified adviser who can provide unbiased comparisons.
At the very minimum, Maureen should immediately allocate $85 per month to enroll in the lowest cost medical insurance plan as discussed above that will provide a "Certificate of Creditable Coverage" so that if a major problem does develop (like cancer), she will not be locked out of other health insurance because of the pre-existing medical condition limitation. (See the article "Understanding a Certificate of Creditable Coverage" for more information on this topic).