Mike the Mad Biologist

Doing Everything Right…

…and you still get hosed by the U.S. healthcare system. I recently switched jobs (this is a good thing), and the joys of our wonderful healthcare system become so apparent.

Basically, I have to pay far more than I otherwise would to not allow a gap in my coverage (i.e., fork over the bucks to pick up a month of COBRA)*, even though:

  1. My new job pays more than the old one; this isn’t financial desperation–I’m actually doing what one is supposed to do in a capitalist society.
  2. I was ‘unemployed’** for only five business days.
  3. I will actually keep the same healthcare plan.

What’s even more ridiculous is that I’ve had to busy work, my former employer has had to busy work, I will have re-enroll for healthcare, and my new employer will have to enroll me, even though I will not have changed the healthcare plan I will receive. Keep in mind that I’m the best-case scenario: many people, I realize, simply go without healthcare, which is far more serious than paperwork hassles. I have no idea if this is economically efficient (I can’t see how it could be), but it sure as hell isn’t societally effective.

This is no way to run an empire.

*Alternatively, I could have worn a suit of armor and a crash helmet, but then I would have looked even dorkier than usual.

**I would have said something like ‘transitioning’, but, unfortunately, that’s become a euphimism among the professional set for unemployed. The point is, however, I wasn’t looking for work; I had a good job lined up. What else was I supposed to do?

Comments

  1. #1 Orac
    November 9, 2007

    Actually, you have, I think, 45 days after leaving to sign up for COBRA; what I’ve always been advised to do if the gap between jobs is less than 30 days is simply not to worry about it. You can always purchase COBRA if you need your insurance during that short period of time.

    I’m not sure if this is the greatest advice, and if there’s a next time I switch jobs I don’t know if that’s what I’ll do.

  2. #2 Mark P
    November 9, 2007

    I presume it’s because the health insurance company’s contract is with your employers rather than you. You are simply a cog.

  3. #3 katre
    November 9, 2007

    Be really careful. When I switched employers last time, I also kept the same healthcare provider. The problem? My old employer’s system didn’t send the “termination request” to the healthcare provider, so when the new employer tried to enroll me, they refused, since I already had coverage. Queue several months of me calling back and forth to get this straightened out. While this was happening, everything still went through on the old insurance, until it was finally canceled, when the provider retroactively refused everything (even taking money back from my son’s pediatrician!). We’re now in the process of getting doctors to resubmit with the correct insurance info. We’ll see if it takes the first time, but I doubt it.

  4. #4 qetzal
    November 9, 2007

    I’ve been told the same thing as Orac, on several occasions. Supposedly, you can wait and decide to purchase the COBRA even after you incur a medical expense during the transition period, as long as you do so before the COBRA option expires.

    If no expense occurs before your new employer’s plan kicks in, no problem. If one does, and it costs more than COBRA, buy the COBRA for a month and it will retroactively cover that expense.

    Again, this is what I’ve been told. I can’t personally vouch for its accuracy.

    Also, I don’t know if there’s any possible effect on the new plan’s willingness to cover pre-existing conditions.

  5. #5 Emily
    November 9, 2007

    I believe you can have “continuous coverage” even with a gap as long as the gap is shorter than the 45 days you have to sign up for COBRA. If you have had coverage within the last 45 days, they have to pony up for your pre-existing conditions.

  6. #6 Cassandra
    November 9, 2007

    I just switched jobs in July, and you should not have to pay for 1 month of COBRA if you were without coverage for less than 63 days. Check out this site at the Dept of Labor on HIPAA, which governs the law on this:

    http://www.dol.gov/ebsa/faqs/faq_consumer_hipaa.html

  7. #7 A
    November 9, 2007

    Probably you did the right thing by paying for COBRA, just to be on the safe side. If you’ve had a problem, they’d probably find that your request to sign up for COBRA arrived in their office just one day late. And the next insurance then won’t cover anything as a ‘preexisting condition.’ When I changed employers I also got a letter from them (BCBS of SC) that they’d not cover preexisting conditions for the first 6 months, unless I’d been insured continuously; I immediately sent in proof that indeed I & family had been continuously insured, to prevent them from using such a cop-out on coverage. Fortunately nobody in my family got sick during that time, anyway.

    After my wife switched over from her employer’s BCBS plan to mine, the following years any health reimbursement request sent to BCBS (with the correct new number and copy of insurance card) was routinely rejected, for not being insured any more, and required numerous phone calls and letters (with copies of the insurance card) to point out that indeed she was now insured by a different BCBS affiliate (like the one mentioned on the bill sent by the health-care provider).–
    A colleague of mine has diabetes, so always requires the same meds and checkups; once a year his bills are rejected with the terse explanation, that his plan doesn’t cover this or that; and he spends then an hour on the phone pointing out that his plan covered this item like in the preceding quarter. Often this requires talking to a supervisor of whoever answers the phone.
    So much productivity lost!–
    The little-known economic fact of life in the U.S. is that ~27% (or some such number) of your premium dollars goes to overhead (Insurance administration, agents, CEO’s salaries, advertising, schemes to avoid covering actually sick people), and ~73% is used to pay health care providers. Well, we know that private enterprise is always so much more efficient. Governmental health insurance schemes, such as (in California) Medi-Cal/MediCare spend as much as 3% of the budget on overhead (administration, waste, fraud and abuse included). (Doctors though hate it because its reimbursement rates are low; but now HMOs also have more power to get lower rates from doctors). As the 27% overhead private insurance is such a big amount of money, any proposal to change this is doomed; the insurance industry will have a 100-million dollar ad campaign against it as soon as it is recognized as a threat to their 27% take. (Remember the Harry and Louise ads when the Clinton plan was announced (ca 1993)?)

    (I didn’t believe the 27% number until I had a quarrel over some bill; insurance claimed one payment amount (on the EOB [Explanation of Benefits], as payment, after rebate), but the check to the hospital -which hospital admins kindly faxed me – was some ~7 or 8% less (than the already rebated amount). I called the phone number on the check, and learned that this company – which processes payments for out-of-state insurers- takes out this amount for processing these insurance payments, and that the health care providers must give this fee as a rebate.) So if there’s such a big loss in one step, the ~27% overhead figure sounds believable. Some HMOs might be more efficient though.–
    So, if you hear someone saying that a government insurance scheme is an inefficient bureaucracy, this person hasn’t had to call his private insurance yet. And he wants you not to know about the overhead cost.

  8. #8 jefff
    November 9, 2007

    If you have no pre-existing conditions you can get a catastrophic insurance plan reasonably cheap to get you over a month or whatever for $60-300/month (depending mainly on age) and only run the risk of loosing a few hundred or thousand to the deductible if you do have a problem that can’t wait.

    I think that a short term catastrophic plan is a better value for a healthy person who isn’t getting insurance from their employer for a short period of time.

  9. #9 decrepitoldfool
    November 9, 2007

    Well at least you’re not caught up in the terrible inefficiency and substandard service we’re certain to get from “government-run health care”.

    You know, like in those awful Scandinavian countries that spend less of their GDP on health care than we do, and where there’s lower infant mortality and people live longer on average than here. Whew!

  10. #10 Graculus
    November 10, 2007

    No price is too high to pay to keep the communist wolf from the door, eh*?

    (100% pure Canadian snark, no additives or preservatives. Possible side effects include gay marriage, winter, the CBC and demonic possession. Do not take if allergic to maple syrup or poutine.)

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    Seriously, I have number of USian friends and acquaintances, both in meatspace and online. Nothing I have ever heard from them about US healthcare makes me think it’s a system actually designed to provide healthcare.

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