This post comes from Jeff Siarto, author of Head First Web Design and co-founder of Loudpixel Media.
I don’t receive health insurance through my employer—in fact, I don’t receive any benefits at all. I make good money and pay taxes, but because I chose to start my own small company, I’ve placed myself at the mercy of the US healthcare system.
The United States is the only industrialized nation in the World that doesn’t offer universal healthcare to its citizens. Instead, we rely on an arcane collection of state-regulated insurance companies to provide coverage for the vast majority of Americans. Most get coverage through their employers; low income individuals and the elderly receive benefits through Medicaid and Medicare, and the rest of us are left to “shop around” for individual coverage. Unlike group plans offered by employers, individual health insurance can be denied for almost any reason. It is considerably more expensive, does not cover pre-existing conditions and does not fall under HIPPA laws put into place to make sure people between jobs don’t lose benefits.
Entrepreneurs and Innovators Are Left Behind
This means that many entrepreneurs and innovators—those of us paving the way on our own—are left with costly insurance or no insurance at all. Because of the limited choices for affordable healthcare, the decision to become an entrepreneur looks increasingly less attractive. Even if an individual is to secure an individual policy, the rates will be higher, and the coverage will be less than policies available through an employer.
My Personal Struggles With Entrepreneurship and Health Insurance
About three years ago I had a cyst removed from my jaw. It was a fairly standard procedure, much like having wisdom teeth pulled, until my doctor received the pathology report. I had an Odontogenic Keratocyst (OKC), an aggressive, benign tumor in the jaw that has a high propensity to return (about 30 – 50%). Since then, I’ve had similar procedures to remove the reoccurring cyst two other times with the most recent (in January of 2009) finally producing a clear pathology report. Of the three surgeries, one was covered by my graduate assistant insurance, and the other two were paid for out-of-pocket, totaling about $3000—expensive, but less than many deductibles.
When my graduate health insurance ran out in November 2008, I purchased a short term policy to get me through a few months while I decided whether to build my small company or go look for a full-time job. I decided to become my own boss, and I started looking for health insurance while I began to build clients. I knew that most plans probably wouldn’t cover any problems that arose from the jaw cyst, but I never thought it would be cause for denial.
The first company I looked at was Blue Cross Blue Shield of Illinois. They are well established and their plans are accepted all over the Chicago area. I completed a rather lengthy application, fully disclosing the cyst, paid two months worth of premiums ($350) and waited for a response. About two weeks later I was notified that they needed more information and scheduled a phone interview to discuss the OKC. I gave them all the information requested over the phone and assumed I was that much closer to having health insurance.
I was wrong.
After another ten days or so, I received an email saying that BCBS could not offer me coverage due to information provided during my phone interview. I had been denied. A letter that came a few days later confirmed the fact that they were not going to issue me insurance because of my cyst that was now gone. Even worse was the fact that I now had to answer “yes” to the ubiquitous application question: “Have you ever been denied coverage in the past?”
Black-Listed
This question essentially black-lists me, making it next to impossible to find affordable individual coverage. My last option is the Illinois high-risk pool, or ICHIP, that offers coverage to individuals who are willing to pay, but who are not insurable through individual plans. If that doesn’t work I may be forced to put my company on the back burner and look for a full time position with health benefits (or convince my current girlfriend to make a trip to Vegas).
I have to wonder how many potential entrepreneurs have forgone their plans to forge their own paths for the benefit of health insurance.
Tags: Entrepreneurship, healthcare, innovation
US Healthcare Undermines Entrepreneurship and Innovation | Jeff Siarto
[...] A short article I wrote for The Creative Career on how the US healthcare system is un… This means that many entrepreneurs and innovators—those of us paving the way on our own—are left with costly insurance or no insurance at all. Because of the limited choices for affordable healthcare, the decision to become an entrepreneur looks increasingly less attractive. Even if an individual is to secure an individual policy, the rates will be higher, and the coverage will be less than policies available through an employer. [...]
Stephanie Russell
This is so common in today’s world. In December of 2007 I had to find new health insurance because I was in the working world and could no longer be covered by my parents. And since my small three-person firm didn’t offer health insurance, I was forced to look elsewhere.
Knowing in the back of my mind that there could be a problem because of my mental health, I made sure to disclose the fact that I was being treated and haven’t had any issues since 2004. Apparently it pays to lie, because by admitting this on my application I was denied.
And denied. And denied. By Farm Bureau’s, Blue Cross Blue Shield and an independent insurer. It was terrible and I cried.
Lucky for me I got on COBRA through my old UPS insurance. Everything carried over so I didn’t have to worry about pre-existing conditions, even though I paid $300 a month for my plan (no dental or vision). Unfortunately, when I came under my husband’s insurance in January of this year, everything that was once covered was now a pre-existing condition again.
As of now, I don’t have insurance. We were waiting on Thomas’s COBRA plan but I don’t think it will ever get here. I’m going to assume already that I will have to pay out of pocket for my medication and psych visits for a year, even after my new insurance kicks in in three months.
Let’s hope Obama is working on this.
Paul Kaczmarczyk
A couple things to note in the above posts, is never ever lie on a health insurance application. If you lie it will make it worse since the insurance company can go back and rescind a claim and cancel a policy. It is better to declined by one carrier based on underwriting your condition and then getting insured by another. Some times it is all about finding the right carrier, they are all a little different.
the second thing is never cancel a policy before you have another on in place. Luckily now the cobra subsidy plan that just passed is reopening the window for those recent laid off to reapply for coverage.
jsiarto
My concern is that once you are denied by a major carrier, it’s next to impossible to get another to accept you. They all share information through the MIB and, in Illinois at least, you must answer the “Have you ever been denied coverage question?” The system is broken when a healthy individual, willing to pay, can’t get coverage.
Also, why can’t I see the underwriting guidelines? These people aren’t doctors–who’s making these decisions? This process needs to be more open and insurance companies need to accountable for their decisions and business practices.
annandajay
Wow, after reading these posts, and my reason for coming across these posts is because I am trying to do some research for an article to be written in Self Magazine about how someone may have been denied health insurance because they have disclosed or posted some concerns about their health profile on a blog or a networking site such as facebook or twitter. But after reading these posts, it makes me appreciate what i do so much more and what the company I rep for does so much more. We insure the above situations of which the self-employed have been denied. We are a large non-profit association for the self-employed and nationwide certificate allowing us to take on risks and be field underwriters in cases like above! Thank you for sharing, and if you know anyone who has been denied because they have shared the health profile online, please contact me.
annandajay
Wow, after reading these posts, and my reason for coming across these posts is because I am trying to do some research for an article to be written in Self Magazine about how someone may have been denied health insurance because they have disclosed or posted some concerns about their health profile on a blog or a networking site such as facebook or twitter. But after reading these posts, it makes me appreciate what i do so much more and what the company I rep for does so much more. We insure the above situations of which the self-employed have been denied. We are a large non-profit association for the self-employed and nationwide certificate allowing us to take on risks and be field underwriters in cases like above! Thank you for sharing, and if you know anyone who has been denied because they have shared the health profile online, please contact me.
Paul Kaczmarczyk
I just recently had a client that was denied by one major health insurance carrier but was accepted with another carrier here in Illinois. Every carrier underwrites differently. I’m not saying that every condition will be approved by somebody. Just watch out for companies that don’t underwrite an application. You will be stuck with a plan that pays barely nothing out when you really need it.
David Curry
I certainly appreciate your post Jeff. I’m self employed, and have been since age 18, and have always had my own health insurance. While not cheap, I have a plan that provides rx, $25 doctor co-pay, and a $2500 deductible for around $400 per month for my family of four. I hardly think that $400 per month for an entire family would stand in the way of a a business plan. I have had health issues, but find that as long as I maintain my current policy, I am not at risk of being dropped.
The issue of the day is that the current policy changes that are being talked about do little to address the core problem. If the problem is the lack of insurance across state lines and being black listed for pre-existing conditions, which most would agree are the most miserable problems within the current system, the fixes can be implemented with relatively simple legislative reform. The public option that many view as the savior of the little guy, will do no more to relieve the high cost of insurance than the USPS has done to reduce the cost of postage.
To anyone looking for health reform, google (or Bing if that’s the thing…) “paul ryan GOP healthcare plan”. There’s another bill out there that addresses the issues without bloating government, and it’s a shame that so few people know about it. Thanks for bringing up the subject Jeff.