I've done my own thing since high school with the exception of two years in offices (one as W2 and one as part time 1099). I'm now 35 and experiencing health issues and discovering that unless you earn "f$&! you money" group health insurance in the US is worth at least $75k a year in income. At least.
If you aren't in a country with proper healthcare and are not earning AT LEAST $300k USD a year (consistently), understand that all your years of work can be destroyed by one diagnosis. And plan accordingly.
I love my life. I've had a charmed existence moving to wonderful locales and doing what I wanted when I wanted; but the genetic lottery cannot be outwitted. You can be healthy one day and in debt the next.
Plan accordingly. Don't let youth and good health lull you into complacency.
It's completely possible and attainable for software developers to be independent anywhere on the globe, but understand the potential financial implications and limitations of the social safety nets of your country of citizenship/residence. Plan accordingly.
This is why healthcare should be decoupled from employment. Your work and your doctor should have nothing to do with each other. It distorts the market and limits innovation.
In Switzerland the contract can be terminated at will by both the employer or the employee, with the same notice period (in general one, two or three months depending on how long the contract has been in force).
But health care although not free is heavily regulated and mandatory. Switzerland does have social help. And there is much less poverty. And most of the people living in poverty are not poor homeless poor. They just dont qualify because the avrage income is so big.
Indeed. And my comment was in the context of someone saying that the US is the only country which has at-will employment. I was not comparing Switzerland to the US and I'm perfectly aware it's different in many aspects.
What i was trying to say is that the fact that Switzerland has similar you can be fired at will laws as US. The situation is not at all similar because of the other factors.
I think you understand very well what i mean, so please lets not pick on words.
I would expatriate to a country that has good healthcare at much lower prices so you can pay out of pocket without being ruined. I did precisely that - for other reasons, not for the healthcare advantages. But now this is one of the big reasons I would never go back to the U.S., because of how easily I could be ruined by an unfortunate health event.
In my case hindsight is 20/20. If you don't mind me asking what country did you expatriate to? I've found that several countries I would want to relocate to do not allow permanent residency for people with existing medical conditions in order to avoid undue strain on their subsidized medical systems.
At least in Europe, I have never seen anyone ask for pre existing medical conditions unless getting specialized private insurance. I have never heard of any residency permit being based on medical history in Europe. I would imagine it to be illegal?
I'm currently in Italy myself, and my father was visiting me and got a nasty case of pneumonia on the way over. Here in italy care is (mostly) free,as is his hospital stay here in genova. While it may be not to the full American standard, his care has been great, and the staff wonderful.
I'm glad to be in a system here where Healthcare is good, and affordable, and that with this episode my father is not bankrupted or in considerable debt because of it, especially as an elderly patient. La dolce vita.
British commonwealth countries seem to have health assessment/medical history checks.
Germany requires immigrants to have private health insurance until they are granted permanent residence/citizenship. That insurance can have restrictions on pre-existing conditions and/or be prohibitively expensive.
If you are already an EU citizen the rules can often be quite different than as a US passport holder.
I am not a global expert in immigration law though and I'm now going to research Italy. ;-)
Basically there are three classes of people: Those who need public insurance, those that need private insurance, and those that can choose between them. Who is in which class depends on many factors such as your type of work, income, and insurance history both in Germany and abroad. It does however not dependent on your citizenship or immigration status.
Thailand. They don't give permanent residency here anyway. The laws on the books make it sound as if they do but in reality they don't. So you have to find another way to stay long term. For young people they make it difficult unless you can land a job (few jobs for foreigners here) or start a business (expensive and designed to fleece foreigners, beware). Other ways are retirement visa, spouse support visa, education visa, long stay medical care visa. Staying long term on a tourist visa and doing visa runs every month is dumb and doesn't work anymore anyway since they cracked down on it.
If you can manage the visa issue then you can get excellent care at a tiny fraction of what you pay in the US. Over the years I have had surgery, been hospitalized for an illness, had a fair amount of dental work, and had thorough medical exams annually. It's not just the low cost. The service and hospitality is unlike what I ever experienced in the US.
To add some perspective on Thailand from a fellow resident...
> Thailand. They don't give permanent residency here anyway.
While the process is difficult and there are caps on how many people can receive it each year, people can and do obtain permanent residence in Thailand. I know a number of people with PR, they're all businesspeople who have been here for many years.
> start[ing] a business (expensive and designed to fleece foreigners, beware).
The Thai Board of Investment provides a number of attractive incentives, including a 5 year income tax holiday(!), to foreigners starting a technology business who are willing to commit to modest capital and hiring requirements. Doing business in Thailand is difficult in other ways (limited technical talent, limited and poor English skills, high compliance burden), but I wouldn't characterize BOI as a scheme to fleece foreigners at all. If you are incorporating without a BOI promotion then things are much less attractive, but most software businesses with an intent to hire a few employees will qualify pretty easily.
> you can get excellent care at a tiny fraction of what you pay in the US
True but with caveats. When it comes to affordable, good health care, "better than the US" is not a meaningful standard. The US is a shameful failure in this regard. That said, the cost and quality of health care in Thailand are pretty good--aside from a good private system, Thais and foreigners on long-term visas get free universal health care at government hospitals(!), some of which are pretty good. But it should be noted that private insurance in Thailand carries a number of limitations, such as maximum lifetime payouts and long lists of conditions which aren't covered. In short, the Thai system serves medical tourists very well, but if you're looking for lifelong, comprehensive coverage, things get complicated.
My personal opinion is that Thailand is trying in this area, but currently isn't the best place for most tech businesses to incorporate unless they want access to the Thai market. The main reason for this is the limited talent pool. For some businesses, BOI incentives and the low cost of operating here may make up for this. Either way, Thailand is still a pretty amazing lifestyle destination, and for freelancers/remote companies/very small biz level there are a few options to stay here long-term (Iglu, Elite visa, etc.).
"Thais and foreigners on long-term visas get free universal health care at government hospitals(!), some of which are pretty good"
That's interesting. What type of long-term visas qualify foreigners for universal health care?
Some of the government hospitals are good as you said. I had foot surgery at Siriraj Hostpital, Thailand's oldest and biggest government hospital. While the facilities are old and tired-looking the care was excellent and the doctor was outstanding, this guy https://sites.google.com/site/ankleclinic/aboutus. But I went during their "special clinic hours" which is the same facilities but different hours than when the universal health care patients are treated. Unlike the regular hours, during special clinic hours you have to actually pay for services.
What qualifies you is paying taxes, so basically if you're on a business visa you get it--if there are other visas which allow you to legally work and pay taxes, they might qualify you as well.
They assign you to a particular hospital when you enter the program, and you're entitled to free care at this hospital, if you need a procedure they can't perform, they'll refer you to another government hospital which will also be free. Waiting periods sometimes are long, so it's a good idea to have private insurance as well. Foreigners in Bangkok at the moment all seem to be getting assigned to a hospital in Phrakanong which has a pretty good reputation. You can change your assignment later, I've heard the Police General Hospital on Rama I is very good.
I've heard it's also possible to remain in the program after your employment ends if you pay a small monthly fee (maybe $15).
There is also a Thai equivalent of the USA's social security program, though the payouts are very modest.
Overall it is a good system, you just have to be aware of the limitations of Thai insurance in catastrophic cases (probably I will switch to an expensive expat health insurance plan in the next year or two because of this).
We've lived in Thailand, Vietnam and South Korea, and medical care has been fairly atrocious in each one.
This was the most pronounced in South Korea, because it is so advanced technologically but somehow still has that SEA feel of wanton medical incompetence. It catches you by surprise more.
Massive doses of antibiotics no matter what, IVs for no good reason, X-ray to check for head lice (!!)... fun stuff.
I heard medical care in Singapore and HK can be excellent though. Interesting to hear you've had such a good experience in Thailand, it was the opposite for us (GP, dental, surgical -- you name it, it sucked, even in ?top? places like the Bangkok Hospital). Where did you go?
My wife had surgery at Bumrungrad, one of the well known private hospitals - excellent in every respect. I had surgery at Siriraj, a public hospital - tired looking buildings and not luxurious like Bumrungrad but excellent care and results. Every member of the family has had at least one night in Bangkok Hospital (Pak Chong branch) due to various illnesses - always had good care.
I've had dental work at Bumrungrad, Bangkok Hospital and more recently been going to a small dental clinic near my home. Besides regular checkups and cleanings I had a redo of a root canal that was done in the US and went bad after moving to Thailand, got a new crown, and had some old fillings replaced - excellent care in all cases and particularly the dental clinic has the latest and greatest dental tech.
I have also been getting annual medical exams since moving here 15 years ago, at Bumrungrad, Phayathai, St Mary's Korat, and Bangkok Hospital (Korat and Pak Chong branches). They have always been routine and efficient. The weak spot is the consultation with the GP after all your results are in - some of them a pretty dopey and I would guess it is those guys that are going to be a bad experience if you see one of them for an ailment.
Have you looked at Nordic countries? At least Finland's state welfare system says that if you already live in EU country, you can apply to get treated in here for the same price as what we (Finns) pay. You can still do walk-ins without an application, but you might be billed "the true cost" of treatments, which for an x-ray (which you mentioned down below) seems to be around 200 euros. Although, if you already know you need one, then you can just use private sector which bills you around 75 euros for one (x-ray). The legislation clearly states that you as a patient would be handled equally. The public sector can't either turn you away in any situation if they already provide the needed care.
The system here is a safe haven in other means as well. As a citizen, you are qualified for equal treatment and costs to those in your hometown in other EU countries as well. You can be abroad for up to a year and any medical emergency within the EU would be covered by the state. It's almost backward but I feel like my peers don't want to travel as much when they are young, partly because they know the medical systems in other parts of the world can screw them up.
Uruguay here in South America has free healthcare and a fairly generous immigration policy - probably among the most generous in the world, ridiculously easy compared to any first world country, and no background health checks that I know of.
Cost of living is VERY HIGH though compared to income and even in absolute terms (about the only cheap thing is healthcare :) though if you earn 70k / year you're set unless you want to live in an U.S.-sized house and drive an U.S. sized car) and bureaucracy is very bad.
Immigration systems are currently collapsed because of the flood of Venezuelan refugees, and thousands of Cubans and Dominicans are coming too, so you might have to wait 18 months for the government ID that gives you access to healthcare.
FR, DE, CH, NL, ES have very good health systems. Google "Euro Health Consumer Index" for more info. In general in Europe you can't be denied health coverage due to preexisting condition, at least if you're EU citizen.
Good luck, with the plans on ACA usually being God awful small carriers with crappy networks, you are going to be crushed by out of network providers if you ever have an emergency or serious disease.
India - probably the hottest startup culture outside the US. World class healthcare at 1/10 the cost - medical tourism already exists.
A large part of the economy is already built around software services.
That's because India's domestic markets are large enough. In fact, the hottest startup culture is actually China - but those are closed markets.
When you build startups in India, you build for the fastest growing economy in the world. Yes - startups still do list on international markets, but that is a combination of Nasdaq, Singapore and BSE.
For example, the largest "unicorn" in India - Flipkart - is listed in Singapore.
not yet - but that is the reason it is registered. Same for Ola IMHO. Its was the most regulatory friendly arrangement to allow for an international IPO while still operate things like wallets and multi-brand retail in India.
you are right - I have mentioned that in my other comment. But China is a closed ecosystem. India's markets can be tapped by international founders. For example - look at Zoomcar. Literally impossible to do that in China.
> The Medical Tourism Market Report: 2015 found that India was "one of the lowest cost and highest quality of all medical tourism destinations, it offers wide variety of procedures at about one-tenth the cost of similar procedures in the United States."
medical tourism is a multi-billion dollar industry in India with American and European patients accounting for the largest share.
I'm not talking about cutting edge research here. Possibly there's no comparison there. But I'm talking about something that's practical, applicable and real medical care.
Any data to support your claim? From my anecdotal experience, having lived in both the India and the US, I haven't ever felt that there was anything lacking in terms of receiving world class healthcare in India.
Unfortunately the western culture is slowly but steadily gaining foothold here and with hospitals like Max and Apollo the cost of medical treatment is steadily rising while health insurance is being steadily promoted as something you can't live without.
I'm guessing that within a decade these multinational companies who run these medical establishment as ruthless businesses will be able to get it to the same point.
I thought it was salient and not at all preachy. I came to similar conclusions several years ago. The lack of social safety nets in the US is a heavy burden in the long run for independent contractors and eventually the burden becomes too heavy. I think every independent contractor needs to re-evaluate their business every six months or so and be realistic with their long-term outlooks.
Maybe(?) the comment is preachy, but the sentiment is borne of goodwill and of course, reality. It's a wake up and I personally need to get on to this.
What I really want to get across is that young entrepreneurs need to plan for aging/medical emergencies. The reality of where you live and the potential for unexpected medical expenses can devastatingly impact your life and business if you don't properly plan for those outliers.
I'd recommend you determine your acceptable level of financial exposure to disaster and get competent legal and financial advice to protect yourself and fully understand the potential ramifications of your self employment and/or startup decisions.
It was a great point. Once I realized that the writer was from emea, health care and social safety net were the first thing that popped into my mind. Your experience is valuable. Thank you for sharing it.
As I was reading ops post, I personally latched on to the writer having what sounded like a family that actively cared what happened to him. That's not something that everyone has. Going to bed hungry and not knowing where your next meal might come from will alter your level of comfort with employment risk.
A bit OT, but this post made me think: how do countries provide good health care? does it always have to be government sponsored, otherwise it would be not affordable? And how does the government pay for it, given that the money has to come from taxpayers?
Because otherwise I don't understand why the market can't provide good health insurance in the US? Isn't that a classic insurance problem, take a group of people and spread out the risk?
What is going on? Is medicine too expensive because of state subsidies, so private insurers can't compete? Or are there regulations preventing private insurers from entering the market?
I think that's how insurance works on a basic level, but when it is run as business you try to maximize the profit. Healthcare is one of the best businesses around because in the event your client gets very sick they are willing to pay pretty much everything to get better. You can design the insurance around these events and average customer does not really pay attention.
State run healthcare ruins the market by basing the cost of treatments to pretty much what they cost to perform rather than how much person is willing to pay for them. Of course it does not work quite so smoothly in the real world, but enough that countries with public healthcare seem to be cheaper.
In a "market" in which costs are unpredictable and not disclosed until AFTER care is complete, there is not truly competition.
Try asking a cardiologist or neurologist for a fixed price estimate before a test is run. If you press the issue you'll be labeled a "confrontational" or "hostile" patient and rejected from the practice.
This is what drives me crazy about US health care. Where I currently live the estimated costs are given to you in advance, even advertised on the websites of hospitals and clinics. But back in the US where I used to live it is just like you said - nobody will quote prices.
They will reject you as long as they have enough other patients who don't care about the price. Somewhere the systemic error is injected into the system. There has to be a way to fix it or improve it.
The inresting thing is that it is very easy to get a detailed quote for any medical procedure that is not covered by insurance and payed for out of pocket by the consumer directly.
Dentists are much easier to get estimates from, because they know most of their patients are paying out of pocket. My last visit they gave me an estimate for my checkup and cleaning without my even asking.
I am not yet convinced it is not amenable. For example who gets to serve a city with emergency services? I guess there could be bidders to the city council, offering services for a certain price. That would lead to competition.
Likewise, insurances would negotiate rates for certain procedures. Of course it is not the task of the patient during cardiac arrest to do so. But the patient would choose the insurance provider.
>I am not yet convinced it is not amenable. For example who gets to serve a city with emergency services? I guess there could be bidders to the city council, offering services for a certain price. That would lead to competition.
This sort of thing is usually fertile breeding ground for corruption and backhanders. The NHS has been dogged by scandals caused by this sort of pseudo-privatization.
It works for smaller and short term contracts, especially for things which the private sector also needs, but the larger the size of the contract the more likely it is that the price will be determined by backhanders and which ministers play golf with which chief execs.
For something the size of "supply a city with emergency services", you could practically guarantee that the city council leader's cushy post-political job would be determined by which company they picked.
It's not that hard provided the government is motivated to clamp down on it: keep the contract sizes small, keep the contract durations short, make the transparency absolute and the bidding process transparent, open and fair.
Most privatization efforts come about as an attempt to inject corruption, however, so arguing that it could be done in a fairer and cheaper way is something of a moot point: if it were going to be cheaper and fairer they wouldn't be pushing for it in the first place.
"Most privatization efforts come about as an attempt to inject corruption"
Huh - citation needed? I've never heard that claim before. Corruption pretty much needs governments, who else are you going to bribe?
To me competition seems the only surefire way to keep prices fair/low. Yes, motivated governments in theory could do everything. A supercomputer could theoretically compute the perfect prices and allocations for everything. But no such computer exists, and markets are the only approximation available. You can not rely on governments to be motivated to be selfless and good. Even if perhaps some individuals are, in the long run the incentives are just not aligned, and it takes just a few bad apples to ruin the system.
> who gets to serve a city with emergency services?
It's worth noticing that most of ambulance services in the world are run entirely or in a good part by volunteers and no-profit organizations to ensure honesty and quality of the service.
National health care systems are incredibly common outside the US, and they're often in countries with sliding scale income tax so it impacts the poorer much less than those well off. A lot of countries have hybrid systems where there is partial privatisation, but it's rare to see private insurance necessary for required treatments.
I don't mean for this to be antagonistic so please don't take it that way, but it seems so many outside the US see the US as almost a form of extreme capitalism, where an almost dogmatic belief in the ideal has resulted in sub-optimal infrastructure and services.
But why - I still don't understand what is causing the problem in the US? Even in the non-US systems, somebody has to pay, so how can they afford it, given that all other countries are poorer than the US?
In my view, insurance is completely compatible with capitalism. It is simply a business, based on statistics. So why should the US have a special problem with insurance?
"Insurance" and "healthcare" are two completely different things. To understand why this is, observe that the military run their own state-run medical system rather than requiring individual soldiers to have private medical insurance for any battlefield injuries.
Non-US manage costs by some combination of state price control, aggressive triage, reduction of bureaucracy compared to complex insurance systems, and lower labour costs.
Also, in re "other countries are poorer than the US": that may be due to the US having a few extremely rich people, it may be possible that the average or modal American is poorer than the average European. Especially if you account for healthcare.
The one which has "US Tax rate 20.3%" and "UK Tax rate 18.9%"?
Even if we did pay more tax, how are you accounting for healthcare and other benefits? US state taxes? UK council tax, and the situations where you can have "negative income tax" in the UK (WFTC)?
And, as discussed, you're free of worries about whether or not you'll get healthcare in the UK. (You may experience a delay for non-urgent conditions, I'll give you that)
> But why - I still don't understand what is causing the problem in the US? Even in the non-US systems, somebody has to pay, so how can they afford it, given that all other countries are poorer than the US?
Perhaps the issue isn't that the US as a whole can't afford it, but more that medical treatments are expensive and the rich aren't willing to subsidise for the others.
In countries where it's funded essentially via sliding scale income tax, the rich don't have a choice but to subsidise it.
There are economic interests that have made sure that the information you are talking about isn't available. Its hard to get this across, because it sounds a little crazy.
There are economic forces in American life that actively misinform the public. Medical care is made to be expensive to protect those interests.
If all the money comes from one pocket - the government - the system is incentivized to concentrate on economically optimal treatment. In the US scenario hospitals are financially incentivized to fleece insurance companies for all they can. This is an exaggearation of course, but if a viable treatment can be done with a one doctors visit or two, the US system incentivies for two doctors visits and so on.
why would the money coming from one pocket incentivize economic optimal treatment? By what mechanism? Why wouldn't hospitals try to fleece the government (spoiler: they do, in the countries with public health care)?
Compare the actual figures spent per capita on healthcare spend in single payer vs the us system and the outcomes and you'll find your assumptions are badly wrong.
Single payer works better, that's why almost all countries use it for basic healthcare.
Single payer may work better overall but I can confirm that in Canada they do fleece the single payer in exactly this way.
"Only one issue per visit" so they can charge for two visits. Making me visit to hear the negative results of a standard STD panel, again, just so they can charge for two visits. They charge for an extra visit just to renew prescriptions with no additional examination. Etc.
There are other reasons for one issue one visit - it helps them avoid long sessions which inconvenience everyone else though as soon as insurance companies are involved there are perverse incentives.
Also there are different structures for payment, insurance and pay per visit are simply not necessary with single payer though some systems use an amalgam of public/private.
Same thing in the USA. Trying getting a problem looked at during a physical; they want a separate appointment. Though since my insurance pays for physicals, I can see why they do it. Probably required by insurance company since my deductible is $5000.
A) For example Germany (where I live).
B) Why do the billing practices have to be opaque? In Germany, patients often don't even see the bills. It all goes directly to the insurance company. For public insurance, that is. For private insurance, the patient pays and then asks the insurance company for their money back.
Regarding your last question: because the government gets to say how much its willing to pay for any procedure. It's the government that has leverage on what the price will be in a single payer system.
Insurance is compatible with capitalism. I don't think anyone is implying that it isn't.
What we are trying to say is that in the US, insurance provides very little benefit while constantly driving up cost. They actually have every incentive to shield consumers and producers from having good levels of information about value and cost. If making money from the actuarial spread were the only thing that they did, they might not be so toxic. Instead, they partition information into silo's to further create arbitrage points. Every point where they serve as gatekeeper for information is a place in the system that extra profit can be made.
I think one of the things that you are assuming is that they have a single function in the market. They don't. As is often the case, simple capitalist models for ideal markets just don't match reality. They are also able to use their gains to game the system in their favor from a regulatory perspective.
But why can't they be disrupted? For example some people could be pissed off that they don't get information, and companies providing information could win them over as customers.
Obviously, things are not working out in the US. I am just not yet convinced that the market/capitalism is to blame, or if it is essentially corruption (including lobbyists bribing politicians to set up a system that allows the bad insurers to stay in operation).
Consumers don't choose their health insurance companies in the US. Their employers choose them. And when the user != the purchaser, you don't get a good user experience, you get corruption and a race to the bottom.
I think in the industries and positions where employees have bargaining power you do tend to see excellent healthcare plans. But that's a minority of the workforce.
The corruption that you're talking about is just some parties reinvesting their gains in protection of future gains. I'm not anti-capitalism but I think that we need some way to talk about the failures of markets where power keeps being accumulated by parties like these.
In the U.S., insurers cannot be prosecuted for anti-trust violations under McCarran-Ferguson. care providers and suppliers tend to engage in anti-competitive practices, and the state does not provide price controls.
Also, EMTALA prevents hospitals from denying treatment for ER visits. People without insurance use these frequently as they have no other alternatives for care. ER visits are incredibly expensive and its a partial reason for price spikes.
Basically the US healthcare system is a patchwork of system tied to employment (which stemmed from wage controls during WW2). No one's been able to rework the system since there are too many entrenched players making too much money
>In my view, insurance is completely compatible with capitalism. It is simply a business, based on statistics.
Insurance that is based upon a normal distribution is compatible. Insurance based upon a non-normal distribution is not compatible because you basically can't price it. You therefore usually get a few scenarios:
* The insurer prints money during the good years and goes bankrupt in the bad years.
* The insurer prints money during the good years and somehow caps their liability in the bad years (this is why homeowners' insurance typically doesn't cover flood damage).
Sometimes the government covers the difference (e.g. the government coughing up the money AIG owed to Goldman Sachs, the nuclear liability cap or NFIP), sometimes it doesn't.
You get non-normal distributions in a lot of situations - nuclear insurance, flood, earthquake, healthcare and insuring against default risk.
tl;dr capitalism is compatible only with high school statistics.
But lots of insurance companies operate on the risks you mention, floods, earthquakes. There are insurance companies that insure other insurance companies against outliers, for example.
Sure, there is no guarantee that the whole network can not go broke. But that goes for governments, too.
Also I think health care will always have to be capped at some point, because with arbitrarily high investments, you could presumably keep people alive indefinitely (heart fails - attach heart machine. Lung fails - attach lung machine...). That is why in the UK afaik they don't pay for dialysis once you reach a certain age.
"But lots of insurance companies operate on the risks you mention, floods, earthquakes. "
Where this does happen there's usually a fairly low liability cap, some sort of hybrid private/public partnership or a combination.
"Also I think health care will always have to be capped at some point, because with arbitrarily high investments, you could presumably keep people alive indefinitely (heart fails - attach heart machine. Lung fails - attach lung machine...). That is why in the UK afaik they don't pay for dialysis once you reach a certain age."
The UK is almost entirely communist (this is a description, not a slur) in the way funds are allocated. They base funding decisions on something called QALYs - quality adjusted life years.
The practical upshot is that expensive operations that will add 6 months of painful life for an elderly patient are not prioritized under the NHS whereas operations that could save a newborn child's life have virtually no funding limits.
There are all sorts of structural limits on providers entering the marketplace. Not just doctors, but hospitals and the like. In many states, opening up many types of medical facilities requires a certificate of need from the state regulator (exactly what sorts of facilities vary by state and some states don't require them).
Another factor is that many people don't shop for their insurance, they take whatever their employer offers (and if they have much leverage, they demand that their employer offer something with broad coverage and minimal copays and deductibles).
I am no doctor, but I guess when you run health care as a for profit adventure you will try to extract more money from your patient. Maybe not the direct way, but you might buy a lot of very expensive equipment and send your patients there even when there is another way of diagnosis that is cheaper. Or you might be even doing a lot of additional screenings just to be sure (you really want to be covered in case of some lawsuit).
I think many people also get unintentionally screwed by the insurance pricing model that demands to only pay at most 25% (an oversimplification) of the stated cost and doesn't allow discounts to insured individuals.
For instance: a hospital charges patients $300 for an X-ray if they pay directly in cash. However, insurer "X" has a policy that they only pay 25% of standard rate for all procedures. So the hospital states their standard rate is $1200 for an X-ray.
So now I (as an insurer "X" policyholder) get billed $1200, but my insurer decides it's a non-covered expense. Does the hospital adjust my bill down to their cash rate of $300?
No.
That would violate their agreement with the insurer and potentially mean that the insurer would only pay them $75 per x-ray moving forward on ALL of insurer "X"'s policyholders.
So now I hypothetically am stuck with a bill four times as large as it would have been if I were entirely uninsured.
This is a product of the impersonal transformation of medicine caused by corporate ownership (and accounting) of local care facilities combined with the legal/profit seeking power of large insurance firms.
You can go to their accounting department and tell them you're unable to pay the full amount of the bill due to hard-ship. They will in turn probably reduce the bill down to $300 dollars. Either that or you walk out the front door and they get paid for nothing, and they have sell the outstanding amount for penny's to the dollar to a debt collector.
This seems to be more of a problem with insurance - there often is little transparency and doctors simply charge all sorts of things to the insurer that the patient has no idea about.
I think that is one of the main challenges of health insurance.
In my country (Germany) I have actually shied away from switching to private insurance, because they pay doctors more, and doctors are known to do as many tests and procedures as possible (not always a good thing, but in the end it is a gamble - too many examinations/procedures or too few?).
The "public" health insurance is quite regulated as to what gets paid and how much. The downside is that doctors have to waste a lot of time on bureaucracy (every examination has to be entered into the computer to determine the costs), and transparency is still missing (patients typically don't even know how much their treatments cost). And some committee decides what procedures get paid. I don't trust committees. I trust the market (I mean I trust "in" markets, not necessarily any given market as markets can be broken by regulations, lack of transparency, all sorts of things). I have also spent a lot of money on things that weren't covered by public insurance.
One story I heard is that for example in the UK they won't pay for dialysis after a certain age. So public health insurance is not an automatic solution to every problem.
I think it is actually unavoidable that insurance will have to make a cut at some point, because medical procedures can become arbitrarily expensive. Perhaps even now for the right money, people could be kept alive indefinitely.
I would have no problem with a doctor trying to be profitable - just as with other businesses. I guess the classic assumption is that to be profitable, businesses have to provide good service.
> [I]n the UK they won't pay for dialysis after a certain age
This is completely WRONG, there are NO age-related limits for treatment like this in the UK. Dialysis is a life-saving procedure for those with kidney failure, and is available to everyone in the UK who requires it regardless of age. The same goes for heart surgery, bypass operations, stents etc. which are also sometimes claimed to be age restricted.
The fact that people actually believe that a cruel system like this (one that would cause people to die by withholding treatment just because of their age) might really exist probably says much more about the way US health care works and the perceptions surrounding it.
I am actually from Germany and heard the story about NHS dialysis many years ago, so it has nothing to do with US right wing propaganda or whatever. My apologies, though, if it isn't correct.
Nevertheless I think there will always be procedures that won't be paid for, in any health care system, because it would always be possible to incur arbitrarily high costs. As an extreme example, you could assemble a team of 1000 scientists to try to cure one person.
That's interesting, I assumed it was a solely US belief, and certainly there have been plenty of scare-story emails circulating there regarding NHS and ACA. Obviously NICE [0]
(National Institute for Health and Care Excellence) does make calculations about when and what treatment should be given or withheld, using a system called QALYs [1] (Quality Adjusted Life Years) to attempt to ethically and deterministically decide this, which will always cause some people to be unhappy, unfortunately.
> One story I heard is that for example in the UK they won't pay for dialysis after a certain age. So public health insurance is not an automatic solution to every problem.
A quick Google search reveals this claim is spurious, so maybe don't believe everything you hear.
Sorry about that - I heard it a long time ago. Nevertheless, health insurance will always be capped at some point, you can not guarantee arbitrarily high expenses for everybody.
What happens is: treatments are evaluated and declared either cost effective or not. They don't refuse people treatment because they've used more than their 'fair share' of some allowance.
> Kidney disease is more common as we get older, and although people of all ages can need to start dialysis, it most commonly affects people aged between 65 and 84 years. Figure 2 shows the number of people starting dialysis or going straight to transplantation in each age group and it can be seen that the age group with the most people was 65–74 for both haemodialysis and peritoneal dialysis. In 2013, the average age of people starting treatment was 65 years and this has changed little over the last six years. The average age at start was 67 years for people starting on haemodialysis, 60 for people starting on peritoneal dialysis and 50 for those having a transplant before they start dialysis. In 2013, more men started treatment than women (63% male versus 37% female). Diabetes was the single most common cause of kidney failure (25%).
> The NHS provides a comprehensive service, available to all
> It is available to all irrespective of gender, race, disability, age, sexual orientation, religion, belief, gender reassignment, pregnancy and maternity or marital or civil partnership status. The service is designed to improve, prevent, diagnose and treat both physical and mental health problems with equal regard. It has a duty to each and every individual that it serves and must respect their human rights. At the same time, it has a wider social duty to promote equality through the services it provides and to pay particular attention to groups or sections of society where improvements in health and life expectancy are not keeping pace with the rest of the population.
Sorry, I heard it many years ago and didn't double check. Nevertheless for sure there are caps on health care expenses.
Speaking of kidneys - don't they prioritize recipients of organs somehow? If age based discrimination is forbidden, an 85 year old person would be as eligible as an 8 year old to receive a new kidney?
> Because otherwise, I don't understand why the market can't provide good health insurance in the US? Isn't that a classic insurance problem, take a group of people and spread out the risk?
No, your mistake is in assuming that insurance companies exist to spread risk and reduce costs. Insurance companies like most publicly traded companies exist to transfer wealth from customers to executives and shareholders. As a result, they will do whatever they legally can to raise revenue (increasing premiums) and reduce costs (deny coverage, push the burden to the consumer).
The other aspect is that healthcare in the United States does not lend itself to a free market solution. There's no transparency in prices, so you can't exactly shop around when you need a procedure done. In addition, you also have times when a person needs treatment due to a life-threatening condition. He is not interested in looking at alternatives, he's interested in staying alive, so he's going to take whatever provider is around. Well, if that provider is not "in-network", he's going to get hit with a massive bill. The United States is literally the only developed* nation that has the concept of medical bankruptcy.
* The United States is not truly developed. From an economic standpoint, we are, from a social standpoint, we're not.
This is the main problem. American health industry (doctors, pharmaceuticals, etc) cost a vast amount more than in other countries, thus insurance is also high to compensate for this.
I've heard that a big part of this cost is due to the highly litigious culture in America that requires doctors to carry very high malpractice insurance, which they must then pass on in their patient costs. Americans love to sue, and this drives prices up.
I don't know if this is true, but its the one argument I've heard over the years that makes the most sense to me.
I once had a worldwide health insurance plan while living in Asia, and it covered all countries EXCEPT the USA, because of the absurd costs there.
Strangely enough my primary income is writing software for the healthcare industry. A significant portion of my firm's income goes to insurance and lawyers to ensure compliance/protection in the event of a lawsuit.
One reason it costs more: people with serious conditions may delay presenting because they fear the cost of healthcare.
And unfortunately, many serious conditions are dramatically more expensive, and potentially more lethal, when presenting late. It's a nasty piece of positive cost feedback inherent to the current US system, and one that disproportionately affects patients from lower income brackets.
Other reasons include the massive costs of running and staffing the billing infrastructure, cost of compliance & provider insurance, and uncontrolled drug pricing.
These factors are not present in most other first-world healthcare systems, or are present but minimised by effective regulation.
> group health insurance in the US is worth at least $75k a year in income. At least.
Would you be able to expand on this? The math isn't adding up on my end. At 35 in California, you'd be paying $350/mo for a Silver plan, with an OOP max of $6800/yr. So the max health costs for a year would be $11k. Plus you get a ~30% discount on premiums from tax deductions under your own company.
Out of pocket only refers to covered billing codes (originally said expenses). And that varies state to state by insurer. But in the case of blue cross blue shield Texas the SPEC test was "covered" but the injectible radioisotope was not. Nor was the injection itself. Or the IV catheter insertions. Or the related ECG. Etc etc.
Out of pocket only applies to covered benefits. Which in many cases are selectively chosen by the insurers.
Also understand the tax and benefits implications of various corporate structures. Being a C-corp vs S-corp in the US can have major tax implications in the event of a major healthcare expense or even routine premium payments. Talk to an accountant and attorney for advice relevant to your situation/jurisdiction.
That would certainly explain it. I've been lucky enough to not need much medical care, so I'm not familiar with the ins-and-outs of actually using my insurance.
Group plans are subsidized by your employer, which makes it cheaper than the ACA plans at certain incomes. Also the group plan I have has lower deductibles than the ACA does.
The ACA did do a great thing in controlling what insurers have to cover, which prevents insurers from being super selective on coverage.
The claim I question is the claim that group plans actually cover a great deal more than marketplace plans (to the tune of being worth $75,000 a year...).
I'm quite sure that the various mandates in the ACA impacted many group plans, not just individual insurance. Maybe places with strong unions had plans that already exceeded the ACA mandates.
Honestly that number was mentally calculated late at night based on my personal experience and actual costs including taxes.
Most group plans at decent employers have many, many fewer billing code exclusions. They also tend to offer better choice of providers than most individual plans (many individual plans use a limited selection of doctors who have agreed to lower rates, etc for the insurer). This can also mean less wait time for specialist visits and therefore less time with lost income.
Additionally being employed with group coverage you generally as a salaried employee will not be fired for being sick. So your income does not dip due to you being unavailable for work as you can continue to draw salary.
As a hypothetical example: let's say you are in an accident and can only manage to work 20 hours a week for six months after (not unrealistic). If you are the primary or only source of sales/billable hours/invoicing for your firm you have to plan for a loss of income during the recovery time. What taxation considerations are there if you have to draw funds out of the company for medical bills? If you're structured certain common ways they get taxed at your full income rate in addition to the corporate tax rate (if the funds have been retained in the corporation as profits).
When calculating all those externalities $75k was the off the cuff number I came up with. I don't vouch for its total accuracy.
But some of those things are just benefits of having an employer. They tend to come with group insurance, but it isn't the group insurance that decides to keep you on during the illness or recovery.
That's fair. The point I was hoping to make though is that being self employed or even running your own startup has significant non-obvious financial risks/externalities when it comes to emergencies and healthcare in the US. Those risks have to be offset with cash beyond what many people assume is sufficient due to non obvious factors. Planning and good advisors are key.
> If you aren't in a country with proper healthcare
One thing that surprised me is that healthcare in Thailand is exceptionally good. There are world-class hospitals and doctors, and people come here for medical tourism. The dentists are also very good, and very affordable.
I think I've actually had better treatment in Chiang Mai than in San Francisco. I have health insurance, but I've never had to use it, and I just pay cash for everything. I once went to the ER in San Francisco and ended up paying $2,000 for an x-ray and some medicine (that was after insurance, I think the total bill was something like $5,000.)
We've had a few x-rays and medicine in Chiang Mai, and we just paid $40 in cash (USD).
So I think it's definitely a good idea to live in a country with universal healthcare, or one where healthcare is very affordable. Of course, unless you have "f&*@ you" money, then it doesn't really matter.
You know you can buy health insurance, right? When you start a business, you will have costs. Health insurance, part of benefits, is one of them. You need to factor this into what you charge customers and clients.
It shows poor business acumen to assume that what you charge is what you make. You may be able to get away with that when you're doing side gigs, but if you start a business, you must plan for costs.
One of them is heathcare. If you can't afford it, maybe you shouldn't have gone out on your own in the first place.
Assuming we're talking about the US market, this is currently true-ish with some caveats, the biggest of which is that there's a major political party currently holding all the power at the federal level working hard to take us back to a time when some people -- even some people with wealth -- could not buy insurance (natural consequence when insurers have every incentive to be selective about who goes in the risk pool), and even some workplace groups faced limiting choices.
My first full time job (in 2006) was with a relatively small company, but with hundreds of full time employees, and thousands of part-timers. I started right before a group policy was to be established, so every full-timer (including myself) was given a medical survey and a doctor was scheduled to come into our main campus for physicals.
Needless to say, we were denied a policy that any of us could afford. The average age at that company was over 50.
Thankfully, being young, I could stay on my parents insurance for one more year before having to get my own personal insurance.
I pretty much had to switch insurance every couple of years to higher and higher deductibles so that my monthly expense didn't grow. This was during the housing debacle, and no jobs and my current salary wasn't getting higher.
I kept my shitty insurance which wasn't ACA compliant until it was illegal to do so, and then I went without paying the fee the first year, then getting insurance through my wife's school the next year.
If the US goes back even 10 years, rates might be lower, but real care is almost non-existent.
I didn't get to have a stomach bug covered without months of fighting back and forth and medical collections calls until the ACA's pre-existing conditions clause went into effect, as I had a lot of stomach issues as a child.
I've been fully insured to the extent that insurance was available. Meaning that before the ACA I was generally uninsurable so large amounts of money were set aside and state high risk pools were applied to (those are a whole other can of worms).
As someone who has done this for fifteen years, my point is that anyone looking to get into this has to plan ahead financially for unexpected situations. Even with planning and insurance you can find yourself in a tough financial situation unless you consistently earn enough money to set aside large amounts for emergencies.
And for the love of god talk to accountants and attorneys about how to structure things. If you need access to funds rapidly you don't want to screw up your taxes by being forced to draw from penalized sources.
Obamacare/ACA changes this a bit. Your premiums usually won't exceed 10% of your income so you just have to have enough saved for your out of pocket max.
That said I would strongly recommend everyone who goes independent look into long term disability insurance while they're healthy. Freelancers Union has a decent group policy available to anyone for pretty good rates.
Please understand what "out of pocket maximum" actually means. It only applies to "covered" procedures.
If that experimental surgery isn't covered your OOP maximum doesn't apply.
Also please understand that insurance companies like to consider thirty year old tests/procedures/treatments as experimental/unproven and will consistently use that as an excuse to deny coverage and not apply them to your OOP maximum.
Hope you can afford an attorney if that happens.
Will this likely happen to you? Not at all. Can it happen to you? Absolutely.
Well, everyone pays for excellent health care. When someone has severe problems, the problem isn't finding care/money. It's the disease itselve ( on almost everything)
I'm not a socialist, but I am a big fan of the system. And the cost of medicine is way lower than the US
Belgium has high-quality care that is accessible to all. Everybody contributes to social security proportionally to their working income (which in my opinion is not fair since e.g. capital gains are untaxed). In return, everybody enjoys complete health care coverage (and other protections, such as unemployment benefits, maternity leave, ...). There is a copay for doctors visits (e.g. 6 EUR for your GP, 1.5 EUR for people with low income) and medical procedures, but there is also a maximum amount a person can be charged for health care in a year (459 EUR for low incomes). Bankruptcy due to medical bills is pretty much unheard off.
According to [1], health spending accounted for 10.9% of GDP in Belgium in 2012, which is much lower than in the United States (which spent 16.9% of its GDP on health). Meanwhile infant and maternal mortality rates in Belgium are about half what they are in the US: 3.6 vs 6.1 per 1000 live births [2] and 7 vs 14 deaths per 100,000 live births [3], respectively. Anybody who argues that the free markets lead to better health outcomes than 'socialized' medicine, is ignoring the data.
By the way, dental care is included in medical care. So we don't have third world country situations like [4] in the US.
If you aren't in a country with proper healthcare and are not earning AT LEAST $300k USD a year (consistently), understand that all your years of work can be destroyed by one diagnosis. And plan accordingly.
I love my life. I've had a charmed existence moving to wonderful locales and doing what I wanted when I wanted; but the genetic lottery cannot be outwitted. You can be healthy one day and in debt the next.
Plan accordingly. Don't let youth and good health lull you into complacency.
It's completely possible and attainable for software developers to be independent anywhere on the globe, but understand the potential financial implications and limitations of the social safety nets of your country of citizenship/residence. Plan accordingly.