posted on:  10/3/2006     revised: 3/9/2010

Individual health insurance prices in New Jersey have become so ridiculous that I decided to have some fun with it.  After all, when I try to speak seriously on the topic, listeners think I am joking anyway. So why not go with the flow?  When New Jersey lawmakers bungled this issue fourteen years ago, I thought the problem would be short-lived. Once people saw the consequences, our legislators would back down.  That never happened.  Instead, we just became a state of uninsured individuals or gradually accepted managed care plans with limited benefits.

The serious question starts when a New Jersey resident recovers from disbelief after asking about the cost of full coverage individual health insurance they really want. It goes something like "You mean $3,678 dollars per MONTH!?"  then "So what are my options?".  Perhaps taking a $5000 deductible policy for $1500 per month instead? No? Then it is time to take the next step.

The options, as I see it, are:

1) Accept managed care with limited benefits. Coverage starts at under $750 per month for family coverage if you are willing to accept health care decisions and benefits limits handed down by the health insurance company.

2) Move; or at least get a new primary residence. Just across the river in PA, some families pay less than $300 per month for health coverage. I have always maintained a home and a business in each state. The total cost of operating both residences and both businesses is less than the cost of a typical family health plan in New Jersey.

3) Form a business. It might be cheaper to put a few people on payroll and then qualify for group insurance than to pay the individual insurance rates. If you are working with other sub-contactors who are facing the same difficulties with health care, then this might be a viable option. Group insurance is more affordable than individual insurance.

4) Save your money and go bareback. After all most people do.  The nice thing about health insurance in New Jersey is that you can wait until after you need it to enroll. For example, if I am diagnosed with a disease today, I can enroll now to have insurance coverage start on the 1st of the month before I start treatment. This is an insane way to run an insurance program, but that is the way our legislators wanted it. Stashing away even a portion of the cost of insurance would make most people financially secure before a major health problem came along. The goal is to money available when and if the insurance is needed. The problem is that most of us spend every dollar that we earn, so suggesting that we start a savings plan is just "spitting in the wind". More than a hundred thousand New jersey residents are just one medical bill away from financial ruin. Medical facilities are accustomed to working with people who have no insurance, and have become efficient at ruining people's credit

5) Plan to be broke. Poor people get pretty good health coverage, especially on a "cost per benefit" viewpoint. It might pay to be poor. If you own a house or other assets and it looks like health problems are ahead, maybe it makes sense to change the title right away. There are tons of rules and limitations on this topic and dare I mention the outlawed practice of "Medicaid Planning", but anyone in this dilemma would be foolish not to consider all of the options. Anyone who rules out the options above stands a good chance of becoming impoverished from health care costs eventually anyway, so why no plan for it?

5) Get real about health care planning. Regardless of whether you live in New Jersey or elsewhere, and despite the fact that you may be healthy now, health care expenses are likely to eventually be our largest expense. Despite governmental efforts to encourage us to prepare for long term health care expenses not covered by Medicare. Over the long term, we all must deal with the issue. As a nation or as individuals, we cannot afford the health care that our system can offer. Tough decisions are ahead.

keywords:   health insurance, New Jersey, NJ, price, rate

related topics: New Jersey Insurance Exchange

Copyright 2010 by Tony Novak. Originally produced and published for the "AskTony" column syndication prior to 2007. Edited and independently republished by the author in March 2010. All rights reserved.