Dollars & Sense
Living without Health Insurance
One of the first questions many prospective expediters ask when researching a career in expedited freight is: "What about health insurance?"
For those individuals who have enjoyed employer-provided benefits that included health insurance, it comes as a shock to discover that the self-employed business people of expedite must provide their own health insurance coverage.
As it turns out however, health insurance for the self-employed can be an affordable expense, with a number of agencies and organizations that write individual coverage at a reasonable cost, especially when the alternative is considered.
But first, an overview.
The state of health insurance coverage.
The United States loses at least $65 billion to $130 billion every year because of the poorer health and earlier death experienced by the 45.8 million Americans without health insurance. (U.S. Census Bureau - August, 2005)
Many Americans believe that essential health care should be -- and in fact, is -- provided to those who need it, regardless of a person's financial resources or health insurance status. But the reality is that uninsured people are significantly less likely than those with insurance to receive health care deemed necessary by physicians, including preventive services and care for chronic conditions.
As a result, uninsured Americans are more likely to have poorer health and die prematurely than those with insurance. Being uninsured for even one year appears to diminish a person's general health.
Uninsured families also suffer financially. Their average annual out-of-pocket medical expenses are less (in dollars and relative to income) than those of insured families, in part because they forego routine care.
But for the same reason, uninsured families are at greater risk of needing very expensive care relative to their income; one out of every 4 uninsured low-income families faces medical bills that total more than 5 percent of their income.
On average, uninsured families pay up to 40 percent of their health care costs out-of-pocket. More than half of working age adults who report serious problems paying medical bills are, or recently were uninsured; most of them borrow money from family or friends, or mortgage their homes to pay expenses. Some eventually declare bankruptcy.
You need some kind of health coverage. Without it, even a relatively minor operation could ruin you financially.
Logic would suggest that the percentage of uninsured owner/operators and drivers in expedited trucking is greater than that of the general public because of the self-employment status of the people involved.
Some expedited owner-operators and drivers are fortunate to enjoy coverage under a spouse's employee insurance plan, but for many in this industry of the self-employed, the high price of health and medical insurance puts coverage out of their reach.
Even for those who have enjoyed health insurance coverage, expenses have increased dramatically for the self-employed. Premiums have had double-digit increases in recent years with a rise of 13 percent in one year alone.
Although it can be expensive, there are ways for trucking owner-operators to get at least a minimal level of health insurance or, for those who have coverage, to reduce their costs. The basic options include:
Major medical
Major medical insurance provides more comprehensive medical coverage than catastrophic insurance does. Not surprisingly, the premiums are also higher.
Typically, a major medical policy offers a range of deductibles per calendar year. Most major medical plans specify the health providers you can see and you will pay higher percentages if non-preferred providers are used.
Catastrophic insurance
Catastrophic health insurance is characterized by high deductibles and low monthly premiums. These plans typically cover only major hospital and medical expenses above a certain deductible, while you pay out-of-pocket for everything else, such as routine doctor visits and prescription drugs.
The majority of catastrophic health plans cover expenses for hospital stays, surgery, intensive care, diagnostic X-ray, and lab tests.
People who buy catastrophic health insurance tend to fall into two groups: young adults in their 20's and adults between the ages of 50 to 65. Young adults who buy this coverage are usually self-employed or do not have coverage through their employers.
Older adults who purchase catastrophic health are primarily concerned with financial losses associated with heart attacks, cancer, and other serious illnesses. They are generally healthy, have few or no prescription medications, and would rather pay out of pocket for office visits to save on their premiums.
High-deductible health insurance can be purchased as an individual plan as well as through an employer in a group plan. According to a spokesperson for Hewitt Associates, companies with 1,000 or more employees typically offer higher deductible plans. He also says that retirees who aren't yet eligible for Medicare choose these plans in order to keep premiums down.
If you have certain pre-existing conditions you often won't be eligible for a catastrophic health plan. Health conditions such as AIDS, diabetes, emphysema, heart disease, multiple sclerosis, and schizophrenia, along with others, can prevent you from buying a catastrophic plan.
Trucking-specific organizations such as the Owner-Operator Independent Drivers Association (OOIDA) can offer discounted rates, although premiums are higher than a company employee would pay through his group plan.
"Truckers are considered a high risk to the insurance industry," says Brenda Reynolds, OOIDA's medical benefits supervisor. "It can be very difficult for the owner/operator in trucking to obtain health benefits, so many are forced to simply do without."
"They have the substantial cost of the monthly truck payment along with other truck expenses and often they are required to supply workers compensation or occupational accident insurance - all their expenses they have just to make a living."
"Because we're a trucking organization, we understand what the independent business people in this vocation require. There are a lot of different plans out there for people to choose from - we try to offer a plan that will fit the needs of the majority of the membership at reasonable rates".
Shelly Benisch of Commercial Insurance Solutions of Akron, Ohio says, "Just about any local agent can provide health insurance for a younger man for around one hundred dollars a month. Even an older man of up to forty-five years old or so can still find coverage for less than two hundred a month with a thousand dollar deductible."
"Now, if you're a smoker, if you have some health issues, or your height and weight are not proportional, you will pay more. But, if you're an average person, health insurance is still very affordable."
Bill Jones of the William G. Jones Agency of Canfield, Ohio tells us, "We write a lot life and health insurance for truckers. We can provide individual insurance for the self-employed - hospitalization and major medical - with the same benefits and coverages that are found in group coverages. The deductibles range from 250 to 2,500 dollars."
He adds, "Many companies are now involved in the Health Savers Accounts. A portion of your premium goes into a savings account and if you're not sick and don't use the coverage, a portion is returned to you on a yearly basis, or it can be allowed to accumulate and it will be used to offset any bill that may not be paid through your coverage."
One expedited carrier that has become aware of the advantages of offering health and medical insurance to its contractors is Express-1 Expedited Solutions, Inc. of Buchanan, MI.
The company offers enrollment in a Limited Medical Benefit Plan that includes Doctor Visits, Accident Coverage, Hospital Stays and a variety of other coverages.
As Bill Jones says, "The cost of going without health and medical insurance is far greater than the cost of being insured."
Commercial Insurance Solutions
Owner Operators Independent Drivers Assn. (OOIDA)
William G. Jones Agency
330-533-5099