I found this a little strange. Isn't it generally cheaper per employee for a company to secure group health insurance than it is for each employee to get their own? Even if the employee was paying 100% through an employer-sponsored plan, they would save 25-30% right off the bat due to it coming out of pretax income, right?
Yes, that is correct, rates are considerably cheaper per person in a group. But crucially, if you have preexisting conditions you can actually get covered. Insurance companies won't insure people with many preexisting conditions, and when they will insure them the rates can be completely impossible to swing. So let's say you have a stable job with insurance but you have diabetes, or perhaps you are a cancer survivor. If you switch to this job, you will have no insurance and you will not be able to get any. Or consider that you are unemployed. Now you might have state Medicaid insurance. Taking this job means you lose it AND you can't get insurance since they don't offer it.
Or something less serious. A developer who is pregnant for example is basically uninsurable as an individual except also by state Medicaid, which is available to the poor in the US. What if you have AIDS taking long term drug therapy, or you are a paraplegic developer? You will not be insurable as an individual. A disabled developer, or a pregnant one would not be able to take this job with no benefits. In some cases this sort of no insurance policy can work well as a way of screening out candidates that some software companies may consider undesirable, including women of child bearing age, the disabled, and other groups.
So let's say you have a stable job with insurance but you have diabetes, or perhaps you are a cancer survivor. If you switch to this job, you will have no insurance and you will not be able to get any.
Yes, which is one of many reasons why employer-provided insurance is a horrible system. If individual policies were the norm, most people with expensive chronic conditions would have been covered before developing those conditions, and then wouldn't be trapped in their jobs or completely screwed if they were laid off.
> Insurance companies won't insure people with many preexisting conditions, and when they will insure them the rates can be completely impossible to swing.
Yes they will IF you don't let your coverage lapse.
How many people don't know about their preexisting conditions? If their preexisting conditions are serious, why are they letting their coverage lapse?
How many people don't know about their preexisting conditions? If their preexisting conditions are serious, why are they letting their coverage lapse?
If you look up the cost of individual medical coverage and the amount of money provided by unemployment insurance, you may find yourself with the answer to that question.
> If you look up the cost of individual medical coverage and the amount of money provided by unemployment insurance.
I've not only looked up the cost, I've paid it while being unemployed (and "old"). What's your relevant experience?
Yes, it cost money, but so does housing and other essentials. My "not healthcare" expenses are very low and yet healthcare wasn't what would push me over the edge. I didn't even bother to shop.
If you have a serious pre-existing condition, it's unlikely that any insurer will offer you coverage at any price, unless they are obligated to. I had a good friend with a relatively minor pre-existing condition get flat-out denied for coverage
We've just recently had this discussion (you & I), and I'm reasonably sure that this is not in fact universally true: that there are plenty of places where continuous group coverage does not translate to insurability on the private market.
> I'm reasonably sure that this is not in fact universally true: that there are plenty of places
I know that you believe that, which is why I posted a link to a description of some relevant (US) federal legislation. (I know that there is other relevant legislation but ....)
As I mentioned, I've paid for individual coverage out of pocket while unemployed (and old). My experience does not match the common stories and I'm pretty sure that I'm not a special snowflake.
The HIPAA continuous coverage and preexisting condition exclusion statutes apply to group coverage, not the individual market. There are states where either (i) individual health insurance is regulated as if it were group coverage or (ii) sole proprietors can obtain group plans. Illinois is a large, populous state where I believe neither of those are true.
I'm glad you were able to obtain coverage on the private market, but when I started my company in 2005, I tried to pay for it for my family and various members of my family were declined from every insurer in Illinois. I have had continuous health care coverage since 1994.
You made allusions to our "willingness to pay for the true cost of our coverage"† (my paraphrase) in our previous conversation, which I assure you has nothing to do with my complaint. We weren't charged extra (though an extra charge would have been unfair, I'd have paid it and gotten on with my life). We were refused any coverage.
The solution to this problem was to set up a group plan at Matasano, which we were able to do because (a) we're large relative to most YC companies and (b) we have a full-time finance/contracts person. That solution does nothing for whoever takes the job this thread is discussing.
† You also asked where the perceived belligerence in my last reply to you came from; implying that I'm complaining that I couldn't get a free lunch is where it came from. The implication is particularly irritating because my complaint isn't that the "food" (to torture the metaphor) was too expensive; it's that the sellers decided to starve us.
This just isn't true. I have Crohn's disease, have never let my coverage lapse, and I cannot buy individual health insurance at any price. I am an otherwise healthy, non-smoking, exercising 31 year old male.
It is extremely expensive in the US for small companies to provide health insurance for employees. Not as horribly expensive as individual insurance, but still outrageously high.
Which is exactly my point. The job description states that the salary is higher to compensate for the lack of health insurance, which doesn't make sense to me because the increase in salary would cost the company more than offering health insurance through a group plan.
I do take bphogan's point, in that it might not be possible to find a single group plan that spans the entire country, or that those nationwide plans cost more than individual plans.
