Nourishing Stewardship

Ditching Health Insurance – Part Two: The Cost

Now that we’ve covered some of the basics regarding Christian health sharing, it’s time to address the elephant in the room:

What the heck does this thing cost?

The idea of not having health insurance is admittedly scary. Health care is expensive.

BUT…

Corporate health insurance plans are not the only way to affordably cover your family’s health care needs. And you don’t need to be independently wealthy to strike out on your own without a health insurance plan.

For my entire life, I’ve had traditional health insurance. First, it was provided to me by my parents through my father’s employers. Then, I provided my own health insurance/my family’s health insurance through my “big girl” post-college job.

When I quit my job, one of the costs to weigh was what our financial picture looked like without health insurance playing in. Thankfully for my husband (and for you), I studied accounting, finance, and economics in school, so we were able to sit down and get a detailed picture of what our lives looked like with traditional health insurance and with a Christian health sharing program.

And now, I’m going to share that analysis with you.

“Good” Employer Sponsored Health Insurance Costs

When you’re a young person navigating the new, exciting world of careers, more experienced people are quick to tell you that there are jobs that have benefits… And then there are jobs that have “good” benefits. In my experience, this means that your employer pays a significant portion of things like your health insurance and contributes to your 401(k) or offers a generous vacation package.

An employer who offers “good” health insurance coverage has struck a deal with an insurance company (possibly two), and passes the savings on the included plans onto their employees. This means that employees generally pay less in their monthly premiums, and may enjoy lower deductibles than others with similar coverage.

My employer was a “good” employer, so I’m going to work from some of the actual numbers that Josh and I scrutinized as we costed out our 2017 health coverage costs. (Calculated figures are rough estimations of anticipated costs.)

  • Monthly premium: $400/month ($400 x 12 = $4,800)
  • Deductible: $800/person; $3,000 family max.
  • Preventative care: 0%
  • Additional costs: 20% of bill after deductible
  • Prescriptions: 20% of cost
  • Emergency room copay: $200
  • Urgent care copay: $60
  • In-network coverage only: yes
  • Alternative medicine covered: maybe

Bear in mind that we’re a family of four, including two toddlers and now a third pregnancy (this was not factored into any of our beginning of the year assessments, by the way).

Let’s be conservative and assume that we have six sick visits throughout the year (two for each kid, and one each for Josh and me). After insurance kicked in, we would receive bills between $120 and $150 for each of these visits (ask me how I know). Averaged: $135 x 6 = $810. Plus, for three of the six sick visits, we find out that we’ve all shared a lovely case of strep throat and require antibiotics at $10 a person: $30.

Total so far: $5,640

Then, because we have toddlers, we’re going to assume that there are two urgent care visits somewhere in the year: let’s say a case of pink eye on Memorial Day weekend and a bad cut to a thumb at 8 PM some evening. Factoring in our urgent care copay: $60 x 2 = $120. Eye drop prescription for pink eye patient: $10. Total urgent care costs: $130

Total so far: $5,770

Also, because toddlers, we ought to factor in a random middle of the night scare of some sort that sends us to the emergency room. Copay: $200. But it’s also the middle of the night, which means we get slapped with an additional bill from our hospital’s oh so generous overnight doctors who impose an additional $40 fee for seeing you after 10 PM. (Yes, that’s a real thing.) And they may or may not be in network. Tentative ER cost: $240.

Total so far: $6,010

Let’s remember, too, that the urgent care and ER copays aren’t factored into our deductible, so we still have a little over $2,000 to run down on that tab. It’s divided by person, so our kids are closer to their $800 limit than Josh and I are. Thanks to Josh’s pretty great health, he’s likely not going to rack up much more on his end of the deductible.

Now then, that leaves issues to pop up for the kids and I to fill out the rest of the year. We further anticipate that a health issue per child, involving a visit to our family practice doctor, a specialist, and perhaps a test or two will be required. This did partially play out, by the way, when Colm’s soft spot closed early and Paisley broke her nose. Depending on the testing and number of appointments, we’ll assume that the amount of money spent on these medical diversions is somewhere in the ballpark of $300 per kid. $300 x 2 = $600.

Total so far: $6,910

I also found out I was pregnant in June of this year. My OB visits will easily whittle down the remainder of my portion of the deductible ($665). I also get to pay that nice 20% of the delivery charge, which for Colm was about $500 (we had the same health insurance plan in 2016 when he was born). And I also get to pay a portion of all of the lab tests for the baby. Let’s say that the initial blood work and glucose testing are billed to me at $40 a pop. My portion of the 20 week ultrasound payment is $130. Total 2017 health costs for my baby with a 2018 due date: $665 + $500 + ($40 x 2) + $130 = $1,335.

Total so far: $7,945.

Oh, and I need prenatal vitamins ever month this year because of breastfeeding and pregnancy: $25 x 12 = $300

Grand total: $8,245

So with a “good” health insurance plan and a very healthy family – no one has any chronic conditions or enduring prescription needs – we’d pay over $8,000 for our health insurance coverage. Not exactly a bargain. Averaged out, this is nearly $700 in health costs a month.

Christian Health Sharing Coverage Costs

Then we looked at our likely expenses with a Christian health sharing group. I’m going to use the figures we looked at when considering our group – Samaritan Ministries – specifically. There are other sharing programs out there, so it’s always a good idea to shop a few groups before settling on a final decision.

  • Monthly share (family of four, head of household under 26): $465
  • Save to Share yearly contribution: $415
  • One time startup/application fee: $200
  • Preventative care: 100% at cost
  • Additional costs: $300/incident, up to $250,000 (though as Save to Share members we receive coverage above this $250,000 figure, should we require it)
  • Prescriptions: available for a significant discount with included Rx savings membership
  • In-network coverage only: no
  • Alternative medicine covered: yes

Right out of the gate, we need to address our monthly shares: $465 x 12 = $5,580. Additionally, our Save to Share amount will also come out throughout the year: $415.

(In our experience, this happens maybe $20-$50 at a time, though StS members are advised to keep the entire share on hand in case it’s called upon in one fell swoop. Since this hasn’t happened to us, it won’t in 2017, but this is an important fact to keep in mind. Theoretically we could have had our initial share add up to $880.)

Total so far: $5,995

Oh, and I almost forgot our $200 application fee, which we paid up front, before knowing whether we were accepted or not. This isn’t a recurring cost, but it’s a factor for our 2017 expenses.

Total so far: $6,195

Because preventative care isn’t covered at all, we have to factor in the cost of one well visit for Paisley and three well visits for Colm, plus the cost for Colm’s remaining vaccinations in 2017. Our doctor charges $90 for a self-pay well visit, and we pay $15 per trip to the health department for Colm’s vaccinations. ($90 x 4) + ($15 x 3) = $405.

Total so far: $6,600

Josh and I are bad people who don’t get yearly physicals the way we should. Judge.

However, we do need to factor in sick visits for our family, lest we fall victim to the plague. And here’s where the math gets really interesting.

When doctors charge your health insurance company, they submit one number – a high number. When doctors charge patients directly (commonly referred to as self-pay), they charge a fraction of the figure they’d submit to the insurance company. They also get money in their pocket the day it’s charged.

So when we factor in six sick visits for our family, we’re not working with the $135 post-insurance deductible cost. Instead, we’re working with a reasonable $50 charge per appointment. $50 x 6 = $300.

Total so far: $6,900

Now let’s talk about those urgent care, ER, and random weird illness visits we mentioned above. Regardless of where we go for care, each of these gets wrapped neatly into a nice little package called “Colm’s soft spot shrinks early”, “Gabrielle slices off her finger with a kitchen knife” (this didn’t actually happen), “Paisley breaks her nose”. Oh, and also “Baby Rystedt v3”.

That’s right. Regardless of what the incident is or where you receive your care, each of these incidents gets bundled into a single container that has all of the charges associated with visiting the ER, our family doctor, any specialist he recommends, x-rays, labs, hospital stays, surgeries, therapy, and prescriptions.

As you may recall, each incident has a $300 out of pocket maximum for us to pay. So if we only have one reportable incident per year, our “deductible” would be $300 for that year.

But again, medical accounting gets weirder. When you go to a hospital as a self-pay patient, you usually don’t receive a bill until quite a bit later. That bill is, again, assigned at a self-pay amount, rather than a billable insurance amount, minus what the insurance deigns to cover. (Often the amount is close to that which is billed to the insurance company.)

Additionally, most hospitals offer a beautiful thing called “discounts” for self-pay patients. These can be generous – like 50% or more off of your total bill. Or they may be a bit more conservative – say, 10-20%. Now this probably doesn’t sound like much, but when the discount is coming off of the full cost of a medical service that you’re charged for, this can easily land you a discount in the hundreds or thousands of dollars. And remember, you’re not paying this on your own.

I’ll give an example. The prenatal “package” and delivery with a hospital midwife at our hospital is somewhere in the ballpark of $3,400. If our hospital gives a 10% discount on this care (they do), then I get $340 off of the cost of the prenatal care and delivery services I receive from my midwife.

I know what you’re thinking: big deal, that’s not much savings. And no, it’s not. But I’m not covering this thing myself. As I mentioned before, each incident only costs us a net $300 out of pocket. That’s before discounts. That’s right. Before the discount.

Any amount of discounted medical care charged to our incident bill(s) gets passed along to us to help whittle away at that $300 OOP expense. Then if there’s any discount leftover, it gets applied to the amount we submit to Samaritan to help offset the costs that our fellow members will need to pay toward our need.

When everything is said and done, my pregnancy and delivery with Baby Rystedt v3 will likely cost us a net $0. Compare that with a supposedly “women friendly” and “equal care” health plan that penalizes expectant mothers by thousands of dollars just to bring a child into this world.

Anyway, we could try to anticipate our five random incidents and pregnancy at $300 an incident. $300 x 6 = $1,800.

Total so far: $8,700.

Now we could keep our numbers clean and stop here. Let’s call our grand total $8,700 for a few seconds. This is more expensive than a “good” health insurance plan.

But if you factor in self-pay rates and medical discounts, you’ll find that we won’t actually pay this $8,700 in real life.

In addition to my “free” pregnancy – which actually costs us quite a bit in 2017, but will be a credit in 2018 (the math for this is beyond the scope of this post, but take my word for it) – we also haven’t even managed to hit the $300 mark for any of the incidents that have come up.

With our discounted sick rate – which is what our family practice doctor charges for any non-well office visit, two of the five incidents are only $50. Let’s say there’s an x-ray or two in there ($75/x-ray at Advanced Radiology). Let’s say we do end up hitting a $300 incident charge with an ER visit, and rack up a $120 bill at urgent care, and another $210 bill for a separate incident with antibiotics. ($50 x 2) + ($75 x 2) + $300 + $120 + $210 = $880.

Total so far: $7,780.

In the spirit of fairness, I need to mention those prenatal vitamins that I factored into our health insurance costs. I take them year round, but lo and behold, I become pregnant in June! Samaritan recognizes the importance of proper prenatal health and covers the cost of prenatal vitamins for expectant moms, so I only need to pay for five months of prenatal vitamins out of my own pocket. $25 x 5 = $125.

Grand total: $7,905

The Comparison

Total costs for a “good” health insurance plan: $8,245

Total costs for our family using Samaritan: $7,905

As you can see, for our growing family of four choosing Samaritan is cheaper than even the “good” health insurance plan my previous employer offered.

Of course, these expenses didn’t play out quite the way we’d budgeted. And it’s good that they didn’t, because our sort of surprise pregnancy would’ve cost us an unbudgeted $2,000 in health care costs this year had we stayed with a traditional health insurance plan. That’s not the kind of money we can simply pull out of nowhere, and certainly not the type of unexpected expense you enjoy having crop up when you have ahem health insurance.

We also didn’t have all of the sick, urgent care, and ER visits that I’d factored into both budgets. I’m not saying things won’t ever happen, but I also try to think of the unthinkable when planning our budgets, especially now that we’re covering a good portion of our costs out of pocket. So I like to have the theoretical money budgeted, even though we probably won’t use it in real life.

Moving ahead

I realize that the scope of this post is narrow and might be helpful for some, but probably won’t be helpful for most. In the third part of this series, we’ll do the entrepreneur’s analysis of health costs. I think you’ll be pleasantly surprised at how well a Christian health sharing plan’s costs stack up next to a self-paid health insurance plan.

After all, we got into this game because we wanted freedom to pursue our careers the way we wanted to, so comparing health sharing costs against employer sponsored health insurance plans doesn’t quite tell the whole story, especially if you’re also a self-employed family who’s looking for a better health coverage option for your family.

Until then, please feel free to reach out with any questions, even if they involve awkward numbers. I don’t have anything to hide when it comes to finances regarding our healthcare, and recognize that sharing actual figures helps people to make better decisions. Obviously I’m very satisfied with our personal health coverage choices, but I don’t want to influence anyone’s decisions on quaint stories and opinions alone.

Any other questions or topics you want to see on Christian health sharing? Leave a note in the comments!

Gabrielle Rystedt on EmailGabrielle Rystedt on FacebookGabrielle Rystedt on Pinterest
Gabrielle Rystedt
Gabrielle Rystedt
Gabrielle Rystedt is a writer by day and a writer by night (because writers never sleep), who spends time balancing client orders, a couple of books and her blog at Raising Rystedts. She’s a business school grad who’s dabbled in management, both at the project and company level. She loves coffee and crafting, and enjoys settling down with a good book. Though as mom to three kiddos in three years, she realistically spends most of her time reheating her coffee and typing away like a crazy person on a laptop keyboard while surrounded by (clean) cloth diapers and cheddar bunnies.

2 thoughts on “Ditching Health Insurance – Part Two: The Cost

What are your thoughts?