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.