I must be crazy. I havehad a government job and thus the best health insurance in the world at a very low cost and yet I cancelled my plan and went with a private provider, why?

First of all, I think relying on an employer for health care is positively evil and that this practice should end ASAP by removing all corporate tax incentives and other incentives to offer it to their employees. I prefer to walk my talk rather than just talk.

Second of all, I think that relying on a medical doctor to remain healthy is positively backwards. While I would certainly welcome the assistance of a doctor to reset a bone or perform surgery, my faith in medical doctors does not go much beyond this(*). I prefer a proactive approach to health rather than a reactive approach.

(*) I think this is because having a somewhat longer and somewhat more difficult education compared to an MD and being all too aware of how little I actually know, it is hard to be impressed. The main benefit of a doctor is the comfort of thinking that you’re dealing with an expert. If you don’t believe that, much of the magic goes away. Why do you think doctors wear white coats? Why does a magician wear a black top hat and wave a wand? Indeed! 馃槈

Furthermore I am not willing to pay for the philosophy that drives US health care (click on the link above and read the comments to see my opinion on that) which seems to focus on pharmaceuticals rather than lifestyle. In that regard a very interesting quantity is the numbers needed to treat. This number reflects the marginal utility of a treatment, e.g. how many people do we need to treat to prevent ONE ADDITIONAL BAD OUTCOME. This number can be on the order of a hundred or more. This means that you need to put 100 people on medication to save 1 person. Is it worth it? That depends on the side effects which are measured in a similar way called number needed to harm. Suppose a drug has an NNT of 100 and a NNH of 5, would you take it? It means that it would save 1 in 100 people but harm 20 in the process 19 of which would otherwise not have had to suffer.

Of course this depends on exactly what the treatment prevents and how it harms, but I don’t think that there is any arguing that compared to other countries, which have equally lifespans yet pay half for their health care, US health care is an expensive drag on the system.

Yes, in the US you get to watch a movie on an LCD screen while the dentist is drilling, but seriously … I don’t want to pay extra for that.

The way to minimize the drag is to become proactive with your health — There’s little reason not to as you practically ARE your health — and wrestle back control of your health insurance.

I went to hsainsider.com ehealthinsurance.com and after 10 minutes found a high deductible health plan (HDHP) with a $3500 deductible. This plan provides pretty much the same benefits as big low deductible group plans except that I pay the first $3500 out of pocket. This protects me from catastrophic incidents. I pay $72 each month. I am a 33 year old male with no history other than allergies which I am practically free from due to behavioral modifications over the past 30 years. I’m just mentioning this because I know that there are going to be non-believers stating that it is impossible to get away with paying $72 a month.

Now, it actually turns out that it is less than that thanks to the health savings account. Read more about HSAs here. I have not established one yet, but I’m thinking of going with Wells Fargo. I can put in $3000 in 2009. This is fully tax deductible and since we’re in the 25% bracket, this reduces our taxes by $750. There is a maintenance fee of $4.25/month, so 750-12*4.25=$699. My premiums are $864 for a year. This means I’m paying $165 for a year or $13.75 a month on health insurance. Not bad!

Update: I have now established the HSA mentioned above.

Not the $3000 can be invested inside the HSA. If I do not incur any health care costs over the first year and get 5% ROI, that’s $150, which makes my monthly health insurance come in slight over one dollar! If I go on for a second year (for the record it’s been about 6 years since I last saw a doctor), I will actually see positive return.

If I keep up the 90% clean lifestyle, I do believe I have the ideal setup. Once I hit old age, the HSA can even be converted into something IRA like (I have not checked out the details) which frees the money for things other than pure health related expenses.

Originally posted 2009-01-15 16:48:06.