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.