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.
by Malcolm Gladwell
