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Comment by slg | Hacker News Reader

The worst part for many of these people is that our country still links health insurance with your employer. It is bad enough to suddenly lose your job and primary source of income, but that type of thing is often unavoidable when a company goes belly up. However only getting a week's notice before all your health insurance benefits disappear is the type of thing that just shouldn't happen in this country.

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Also notable that buying health insurance on your own, versus through your employer is typically 2 to 4x the cost.

You can purchase your old benefit through FMLA for up to 36 months in an involuntary departure, but you pay 104% of the cost that previously was split between you and the employer.

What if your employer went bankrupt?

What does the cause matter? Company's dead, the employee "involuntarily departed."

The cause matters because the right to individually buy into the existing employer-sponsored group health plan.

So, if the employer no longer exists, and the employer-sponsored health plan no longer exists, the right to buy in is meaningless.

If your company is buying from an insurance company, that insurance company is required to offer the same plan to the former employee.

It matters if it was a self-insured plan i.e. the company itself paid insurance claims.

In my case, my company "self-insures" but they hire processors (Bluecross, CIGNA, etc) to handle the claims. I doubt that any employer is processing all claims themselves directly. I would have to do the research, but it seems sensible to me that the processor would require some amount of money in escrow (or some other insurance policy) to cover such an event.

Most companies do and thus, most people believe they have a policy from the processor, not their company. Also many companies hire processors for payroll too (ADP and the likes). Does it seem sensible to you that in this case the payroll processor would require some amount of money in escrow to cover severance, PTO, California's WARN etc in case of bankruptcy?

Similar to people thinking they have a policy from the processor rather than their employer, health providers are completely unaware that my employer pays the bills. If the providers don't get paid according to the contract, they'll go after the processor. The processor wants a buffer, insists on escrow or something.

As employees, people are seldom under the delusion that they work for, e.g., ADP. My last company paid me through a processor. My direct deposits showed as coming from the processor. To any bank, it looked as if I was employed by the processor, but the employees knew who the employer was. Should the employer suddenly cease to exist and owe employees anything, employees will go after the employer, not ADP.

> If the providers don't get paid according to the contract, they'll go after the processor.

No, not really. Do a search of "insurance claim denied" and see who is on the hook. Even in the case when the processor simply decides not to pay.

“...according to the contract” is the operative phrase there.

I am not sure what you mean here. There is no contract, which turns an insurance administrator to an insurance under-signer.

" the cost that previously was split between you and the employer"

Employers usually pay at least half, so this doesn't change my 2x-4x range.

I would assume that an actuary might put the cost of an unemployed person twice that than an employed person. Because technically people with chronic health problems would tend to be unemployed.

Companies also get good rates because they can negotiate based on volume.

my company is big enough they self insure. aetna, etc exists to administrate the program

I would also suspect a significant part of the difference is that the company is likely subsidizing the premium cost.

"Hello, cobra? I'd like to pay $1,300 for a month of health insurance"

There is some small amount of protection involved. They have to offer COBRA (I'm not sure about a company going belly up) at the same rate they pay. Which means you get a negotiated rate. I've done this and it's fucking expensive but it works. The shit part is that small companies are exempt, which makes sense but can still suck. I am also not sure what happens if the company is filing bankruptcy or not. So maybe they can get out of it.

"It works" means if you have the money you can buy it. If you've don't have 6 months of expenses saved you're already in trouble, add the $650-1200 a month for COBRA and most people would be on the street.

The only good thing is since they hard laid you off you can immediately apply for obamacare/medicare and pay nothing out of pocket because you have 0 income other than unemployment.

Which is better than absolutely nothing, but now you have to pay the full company rate, which is usually much higher than someone who now doesn't have a job can afford.

I'm not saying it's good or the right solution, but there is something there. I just think it's fair to point out that they have an option even if it does suck.

What happens in the US if you leave your employer when in a degraded health state (let's say cancer)?

Under certain circumstances, you can continue under your employer's plan for a certain period of time at more than two times the cost.

Of course, you now how have the problem of paying more than double in premiums alone without an income.

You have a few options. Here they are in descending order of preference

* Hope your employer is compassionate and keeps you on their plan. I have no data on this, but anecdotally it is surprisingly common. Companies can be heartless when dealing with large groups of employees, but it is much harder to rip away Karen from accounting's health insurance as she is going through chemo.

* Hope your spouse (or parents if you are young enough) has insurance and they can add you to their plan.

* Buy in to your current insurance plan through various government programs (COBRA is one program that a lot of other comments are mentioning) . I don't have all the details on how this changed after Obamacare, but there were generally limits on how long you could do this and the costs were much higher than what your plan previously cost you and your employer.

* Buy a new insurance plan on the open market. This would have been obscenely expensive for someone with cancer before Obamacare's preexisting condition protections, but even with those reforms it still is a huge expense.

* Pay for your medical care out of pocket, which in the case of cancer will almost certainly result in you going bankrupt. Depending on where you get your statistics, there is something like 500,000 - 1 million bankruptcies in the US a year that are related to medical expenses.

> 500,000 - 1 million bankruptcies in the US a year

Really? So, assuming there's 125 million households in the US, a person has ~25-50% (derived with simple probabibility math) of becoming bankrupt over medical bills at some point of their life? That sounds like BS.

https://www.thebalance.com/medical-bankruptcy-statistics-415...

A bit more than half of bankruptcies are medical. And you're forgetting that someone can declare bankruptcy multiple times in their life. But yes, it's a savage system.

The Affordable Care Act did stop the practice of refusing coverage for preexisting conditions. So you can get insurance. The cost is high getting it on your own, not due to the condition, but because the employer isn't subsidizing it.

See https://www.hhs.gov/healthcare/about-the-aca/pre-existing-co...

You go bankrupt and die.

For acute emergencies, like a heart attack or car accident, US hospitals are obligated to treat your immediate needs if you enter the lobby.

You just clutch your chest and say, "Help, I think I'm having a heart attack!"

Sadly, cancer doesn't qualify. Either you pony up $50,000 - $200,000 in the hospital lobby, or they call a security guard and escort you out of the building. Then you go home and die.

Pretty good summary of "uncompensated care" here:

https://www.usatoday.com/story/news/politics/2017/07/03/who-...

The 1985 Emergency Medical Treatment & Labor Act requires hospitals to provide emergency services "regardless of ability to pay".

https://www.cms.gov/Regulations-and-Guidance/Legislation/EMT...

Best approach is probably to be a multimillionaire...

Just another among 10s of reasons why healthcare shouldn't be left to the market. Lining up capitalist incentives with public health is incredibly hard -- the people who need more expensive treatment more badly are almost always the people who are less capable of affording it, for evident reasons: being invalid made them unable to work, being in poor conditions in the first place led to their health conditions, it's all a vicious cycle.

It's fine to have subsidized higher tier insurance as an employee benefit, but basic coverage should be part of normal social security, or, in an ideal universe (or nordic country), something that hospitals don't even bill for because a few billion from taxes could go into the healthcare industry instead of military or roads.

Interesting to note though, employer provided health insurance is a direct outcome of govt policy:

Most insurance in the first half of the 20th century was bought privately, but few people wanted it. In 1942, with so many eligible workers diverted to military service, the nation was facing a severe labor shortage. Economists feared that businesses would keep raising salaries to compete for workers, and that inflation would spiral out of control as the country came out of the Depression. To prevent this, President Roosevelt signed Executive Order 9250, establishing the Office of Economic Stabilization. This froze wages. Businesses were not allowed to raise pay to attract workers. Businesses were smart, though, and instead they began to use benefits to compete. Specifically, to offer more, and more generous, health care insurance. Then, in 1943, the Internal Revenue Service decided that employer-based health insurance should be exempt from taxation. This made it cheaper to get health insurance through a job than by other means.

https://www.nytimes.com/2017/09/05/upshot/the-real-reason-th...

Rarely discussed but yeah, that's how employee provided health insurance became a thing. It makes no more sense than company-provided housing or groceries or life insurance. You're already at risk of being let go by the employer at any time. Why tack on more risk by trusting the employer to take care of important insurance coverage?

The answer in 1942 would have been, "don't subsidize employer-based health insurance." The answer in 1962 would be have been, "remove the subsidies and let God sort it out." The answer is 2018 is...well, kind of like replacing the engine mid-flight. An entire tumor-like system has grown around various market incentives and it can't just be 'removed' without putting the host at serious risk.

It's kind of a shame it turned out this way because it's given insurance a bad name, unfairly IMO. Insurance is actually something that the market handles reasonably well and it's a product worth buying depending on the situation. Catastrophic insurance can be (and, to some degree, is) fairly priced.

There are many health-related services that make no sense to be covered by insurance, though. Doctor visits, routine procedures, pregnancy - it doesn't make sense to insure oneself against any of those events. Rather, they should either be paid for out of pocket or a single payer system if you like.

> The answer is 2018 is...well, kind of like replacing the engine mid-flight. An entire tumor-like system has grown around various market incentives and it can't just be 'removed' without putting the host at serious risk.

Sure it can; the ACA marketplaces were the first step. If they hadn't been systematically undermined, the next step after they were established and stable would be shifting tax incentives to avoid favouring employer-based insurance, and the final step would be removing employer mandates and maintaining the individual mandate.

The problem is that it's not a cancer, it's an active parasite that protects itself against the host.

> The answer in 1962 would be have been, "remove the subsidies and let God sort it out."

Aside from the pointless religious bit, that answer is still the correct one today.

Indeed, if any policy question is answerable via "remove the subsidies" then that answer is the correct one.

"Too big to fail" really means "too big", period.

There is this thing called lobbying. The fact that the government mandates something does not automatically mean that it is good. It could be but it does not have to be.

I've heard of lobbying, and didn't suggest government mandates are good (or not). What I thought was is interesting is that at least initially, it was an unintended consequence, nor the result of a mandate or lobbying.

> President Roosevelt signed Executive Order 9250, establishing the Office of Economic Stabilization. This froze wages. Businesses were not allowed to raise pay to attract workers.

Tangent: from where does the president draw the authority to do this?

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