Homing In on Health Insurance

For those who haven’t read my posts tagged “health insurance,” here’s the condensed history:

Anne and I are both self-employed full time. She makes far more money than I do, but my business has more long-term potential as an asset. Because we stopped saving money years ago and dug a deep debt hole, selling Curio City will be our only chance at retiring. Even though my paychecks are meager now, if I keep making my targets I’ll have a valuable asset providing a livable income 10 years from now.

Coddling Curio City worked for as long as Anne had a payroll job with benefits. That foundation failed in February 2009. Our combined self-employment income covers our bills except for that 900-pound gorilla, health insurance. We’ve been able to keep her former employer’s group rate (albeit without their contribution, of course) thanks to the federal COBRA law. When Anne’s paychecks went away our insurance bill rocketed to $900 monthly (later cut to $770 by reducing our coverage). Her severance pay plus Massachusetts’ generous unemployment benefits enabled us to just barely meet this obscene new burden for a few months. And then Congress, gods love ‘em, put a 65% COBRA subsidy into the economic stimulus package. When I got us accepted into the state’s Medical Security Program, which reimburses 80% of unemployed residents’ health insurance premiums, it looked like our crisis was over. Surely Anne would find a job before this patchwork of government support dried up.

Sixteen months later it’s unraveling. On Monday – unless Congress acts -- the COBRA subsidy expires and our premium jumps from $267 to the full $770. On August 1, COBRA itself runs out and the premium on our current shoddy insurance plan will jump to its full market price (probably around $1,000). Financial Armageddon is coming right around Christmas time: Anne’s unemployment checks will finally run out and the MSP will end.

So I need a long-term solution in a system that’s predicated upon conventional employment. Self-employed workers are among the 800,000 Massholes who are frozen out of the group-rate, employer-subsidized mainstream. Because we also have the misfortune of being old, our rates are near the top of the scale. Federal health care reform comes too late to help us through this crisis and we’re still 12 years away from the holy grail of Medicare.

The Fallon individual plan offered through the Commonwealth Connector at $990 a month (subject to increase under appeal) is probably the best we can do. This week we made a major breakthrough: after three re-submissions, the Medical Security Program finally approved our claim from last October through December! We expect a large reimbursement check next week, and now that we’ve finally destroyed their blowout preventer the MSP should keep gushing dollars for a few months. We’ll only have to pay 20% of that $990 premium until the state and federal governments cut us loose in December.

Enrolling Kraken Enterprises in the Health Connector’s Business Express program almost works. The total premium for insurance comparable to the Fallon plan described above is “only” $858. Kraken would have to contribute 33% of the monthly premium. At $285 per month that’s not a complete deal-breaker; Kraken’s pocket and mine are ultimately one and the same anyway. As I learned last week, IRS rules lock Kraken out of the 35% federal tax credit, so there’s no help there. But the deal-breaker is that Business Express only has two participating carriers -- CeltiCare and Neighborhood Health Plan – and our doctor doesn’t accept either. Neither of us is willing to change doctors, so this option isn’t an option. Maybe someday more insurance companies will join Business Express and I can look at it again.

I still need to rule out joining the Randolph Chamber of Commerce, but that’s a very long shot. No other local Chambers offer health insurance, and the Randolph site has no details. I’m not a Randolph business anyway. I emailed them. They didn’t answer.

Based on the comments to last week’s post, I’m adding one more option: I could get a part-time job. A few employers (e.g., Starbucks) offer benefits if one works at least 20 hours a week in a menial job. Superficially, this idea is pretty attractive. The paychecks would supplement the pittance that Curio City pays me during the summer. If the coverage is decent, and the premium is affordable, and our doctor accepts their carrier, then it’s hard to argue that my time’s better spent prodding Curio City for pennies.

The biggest argument against it: Curio City is very much a full-time job from Halloween through the end of January, and in fact I work far more than fulltime during November and December. Even if I did find a job that provides affordable health insurance, I couldn’t keep it year-round.

The second argument against it: Being away from my office for 20+ hours a week would cost me some business even during the slow months, when Curio City’s schedule is relaxed. Most of my large B2B sales come in over the telephone, so it pays to be here when it rings. My business’s growth rate would slow somewhat if I weren’t nudging it year-round, and that would set back my long-range goals.

The third argument against it: I haven’t worked a conventional job in more than five years. Being over 50 years old and out of the workforce, I’m probably not employable anywhere, in any capacity.

Still, I’m not ruling it out entirely. If our December budget meltdown happens as I envision, I won’t have much choice. The need for health insurance might kill Curio City.

Aside from invalidating everything I’ve done for the past five years, it would be a shame to throw in the towel while I'm meeting my growth targets.

May Numbers

Total income: +13%
Total COGS: +22.4%
Payroll: +142.1%
Net Income (Profit): -404.7%


Year to Date:

Total income: +30.8%
Total COGS: +49.4%
Payroll: +50.2%
Net Income (Profit): -311.6%

Business was perking right along until it hit the wall on Tuesday. I don’t know why. Quickbooks says that I’m a wee bit ahead of LY; Excel says that I’m behind. It’s shaping up to be my worst week since August 2009. YTD, though, I’m still doubling my planned increase, so I’m not especially worried about this blip.

Health Insurance: From Grim to Absurd

I’m grappling with the health insurance monster again. I still don’t know what Anne and I are going to do once her COBRA benefit expires on July 31. The options range from grim to absurd, yet I need to choose one by July 1. The only thing that's changed since the last time I fell down the rabbit hole is my sense of urgency.

OPTION 1: Keep our current Blue Cross Blue Shield of California plan. I don’t know how much the price will rise when we lose her former employer’s group rate. I assume it will go from $770 to something over $1,000 per month. Our coverage is rudimentary and we dislike the company, but keeping it would be the path of least resistance. I expect that it will also be the most expensive.

OPTION 2: Kraken to the rescue! I’d hoped that my company might be able to subsidize our premium and then recoup 35% of that from the new federal small business tax credit. But alas, the IRS says:

(1) Q: If an owner of a business also provides services to it, does the owner count as an employee?

A: Generally, no. A shareholder owning more than 2% of an S corporation is not considered an employee for purposes of the tax credit.

(2) Q: Can an employer claim the credit if it has no taxable income for the year?
A: Generally, no. The credit for a year offsets only an employer’s actual income tax liability.

Since S corporations don’t pay income tax, I have no idea how the credit works. I’ll ask my CPA if it seems to matter, but I’m pretty sure that point 1 makes point 2 moot anyway.

OPTION 3: Kraken to the rescue again! Anne thinks that joining the Randolph Chamber of Commerce would give me access to group insurance plans, so I need to investigate that. I should also see if the Commonwealth Connector offers a group rate to Kraken, even without subsidies. Kraken can’t afford to buy me benefits; the price of insurance exceeds my gross income. But I might be able to arrange some fiction where I funnel my own money through my company. I suck at figuring out mendacious machinations like this.

OPTION 4: The government to the rescue! Commonwealth Connector has an individual Fallon plan that our primary care doc accepts…and that includes dental coverage (bonus! We haven’t had any dental care in nearly two years). Its $900 monthly premium – $130 higher than the COBRA payment that we already can’t afford -- is being appealed and might be raised retroactively. Our current dentist doesn’t accept it, but he’s a bozo anyway. So far, this is our best option…if I can figure out how to afford a monthly bill that’s higher than our mortgage payment.

Commonwealth Care subsidies max out at $43,716 annual income for a family of two. We should fall to that level after Anne’s unemployment checks go away in December. Our current income is low enough to get subsidies under federal rules, but those are still four years out.

In theory, the Medical Security Program is reimbursing 80% of our monthly premiums for as long as Anne collects unemployment. In reality, they have twice denied (on technicalities) our initial claim from last September through November. A patchwork of COBRA subsidies and overpayments covered us from December through April, but the bills started landing again this month. I obviously can’t plan on our claims ever being paid.

OPTION 5: We can go commando. The state’s affordability table says that our maximum monthly premium should be $589. We qualify for a Certificate of Exemption because there are no Minimum Creditable Coverage policies available for under $800. Hooray! That means that we’re exempt from the state’s coverage mandate. Going uninsured is the financially responsible thing to do, and if we were in our 20s I wouldn't hesitate. But the risk for a couple in our 50s is obvious. Worst of all, prospective insurers can require physical exams and exclude pre-existing conditions if you go 63 continuous days without creditable coverage. That will become illegal under federal form…but we need a solution by July 1, not four years from now.

OPTION 6: Anne could get a job. After being unemployed for 16 months now, and with her industry (journalism/publishing) in ashes, landing something just in the nick of time seems like a pipe dream. OTOH, Massachusetts added nearly 20,000 jobs in April, the third consecutive monthly increase and the biggest gain since April 1993. The unemployment rate fell to 9.2%. While I’m sure that none of those jobs went to writers and editors, the labor market as a whole is expected to grow robustly through the summer and fall as the economic boom continues to gain steam.

The bottom line is unchanged: The US healthcare system is employer-based – that’s the core flaw that federal reform doesn't even try to fix -- so there are simply no affordable insurance options for those without jobs.

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Remember that last week’s sales were running nip-and-tuck with LY? Well, I would have just barely beaten it had not that stupid Discover chargeback from January arisen from its slumber. I’d hoped that it might die of old age, but alas: They took away $70.56 and fined me another $25. In the end, the thief got away with $325.72 and my bank stole $150. That’s what it cost to learn two lessons: Don’t fill suspicious orders, and never, ever dispute a chargeback, because the process is structured so that a merchant cannot win.

The Outlook problem that I complained of in last week’s somniferous post turned out to be Ad-Aware’s email scanner running amok. All is well since I uninstalled it.

Zzzzzzz

How's that for a snazzy post title? Really draws you in, huh?

It was a slow week. Whether or not I’m going to beat LY is a nail-biter. If I don’t, it will only be the third time this year.

Outlook 2007 jazzed up the week when it started crashing frequently and slowed down my computer drastically. A Windows update might be the culprit. A Microsoft diagnostic utility recommended uninstalling my old copy of Office XP. But a damaged or missing install file prevented the Windows Installer from doing its thing. Revo Uninstaller was no help. Crap Cleaner found 65,000 temp files totaling 22 gig! Every time Outlook crashes and restarts, it leaves behind another 1,000+ temp files. Egad, this is serious.

A tech guy at Octopus Overlords posted a link to an installer cleanup utility. That turned the old version of Office invisible, but the conflict persisted. Finally I decided to reinstall Office XP in order to uninstall it.

That went quickly and smoothly, but it crippled Outlook 2007 in the process. Fortunately, the Repair option on the Office 2007 disk actually worked. I was up and running again in half an hour. I’m not sure that computing nirvana was restored, though. Outlook isn’t crashing anymore but it’s still got a behavioral quirk – every time I open and close a new email, it says the formatting was changed and asks me if I want to save it…then it fails to remove the message from the task bar. I think it’s still spewing temp files, too.

Should I roll Windows back to an old restore point, or just live with Outlook being emo? I'm not inclined to experiment since MS Office is running fine otherwise. Who knows? Who cares?

Hey, I said it was a slow week. Pretty sad that this is my 200th blog entry.

How Stupid Do You Think I Am?

Two scammers landed in my Junk Mail folder this week. Their atrocious English – inferior even to that typical of today’s youth – gives them away instantly. They urgently need a large quantity of “product” to be shipped immediately by an overnight service or by a courier pickup. Will I please tell them what products I sell and what credit cards I take? Yeah, right. I wonder if my Malaysian thief put my email address on a list of easy victims.

Another order from Malaysia came in via PayPal. Apart from being Malaysian, it didn’t raise any alarms. The person at that email address confirmed placing the order, and the PayPal account looks legitimate. If it’s another thief or a credit card laundering scheme, I can’t see how it works. And so I filled the order despite my misgivings. I can’t write off an entire country based on one bad experience. If I really am too stupid to see how I’m being played for a fool, I’ll be out another $67.57. If that happens I’ll blacklist Malaysia forever and I might discontinue international shipping entirely. It’s not worth the grief.

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Mothers Day shoppers must have propelled the nice sales bump of the past few weeks; that's over now. Every year it dawns on me, too late, that I should have exploited all of those mother-lovers out there. And then every year I forget about them again.

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Some months ago I added a “How did you find us?” list to my checkout page. I tally the answers because I am compulsive. Reporting them here will create the illusion of purpose and break my compulsion.

Between one-third and one-half of my customers deign to answer. Here’s what they said:

• Searching for something on Google: 117
• Searching for something on Yahoo: 17
• Searching for something on Bing or Other: 8
• Referred by a friend: 8
• I don’t know, I just woke up and here I was: 7
• I shop here all the time: 5
• Saw you in a print article or ad: 3
• Typed your address into my browser: 2

There. I’ve purged it, and I can throw my list away. I’m free!