This weekend, my husband forwarded to me his company’s open enrollment information. He works for a smallish company – not under 50; not Goliath. Decent people who try to do right by their employees. I’m always a little scared because I know my little half a million dollar stroll down healthcare lane affects the company’s rates. They are simply not big enough to absorb that sort of expense.
Before the ACA passed, I was petrified that my hubs would lose insurance, because I would never, ever be able to get coverage again. Then what? And just a little ear worm for you — how many people stay in bad jobs or bad relationships because they need health insurance?
NOTE – I AM NOT SAYING HE HAS A BAD JOB OR A BAD MARRIAGE. I have the capacity to think about the world that exists outside my front door.
What I am saying is — this is the freedom we find ourselves clinging to as an argument against nationalized health care?
Back on point.
I know the administrative end of providing benefits for small and smallish companies. Premiums have been increasing for decades, leading companies to be more creative in their attempts to provide benefits that compete with the big dogs in order to attract the top talent.
Selective amnesia has set in, I think, because we seem to have forgotten that 20% annual premium increases was status quo for decades. It has taken away the employee’s purchasing power in slow steady nibbles and employer’s capital in greedy chunks.
So employers keep premiums down by shifting the cost burdens to the employees with programs like the High Deductible Plan coupled with the Health Care Reimbursement Arrangement.
The way I’ve seen it done — the deductible on the plan is raised from zero to say, $2,000 for the individual and $4,000 for a family plan. That means that your insurance company won’t pay anything until you spend that much money on doctor’s visits, etc. This usually happens over the course of a few years in order to allow employees time to adjust, or maybe just to stave off revolt. Despite the lack of dollar coverage, you hold an advantage – you only pay the insurance company’s negotiated rate. A a doctor’s visit that would cost your average uninsured schmuck $150 might only cost you, a participant in a plan from the XYZ insurance company, $80.
Obviously, these plans are cheaper than plans without a deductible. Some companies will reimburse employees for all or part of that deductible. And this works because not everyone goes to the doctor often. The employer is now taking on the risk the insurance company used to assume.
Over the years, I’ve noticed that employers often manage health care plans by the payroll deduction amount, I guess because that’s the metric that matters most to people. While premiums continue to increase by about 10-20% per year, the annual deductible goes up and the amount reimbursed by the company has gone down. In our plan, for example, we are responsible for $1,000 of the deductible whereas a few years ago, our responsibility was $0.
What you’ll hear is that this helps people take ownership of their health care, to be more conscious of their own utilization.
That makes me laugh and laugh and laugh. Oh yes, the insurance company is doing be a favor by teaching me empowerment. Uh huh.
Some years we don’t even hit our deductible. This year, we weren’t even close until my daughter broke her leg in the fall. Even so, I’m not sure we’ve hit it yet.
Let’s contrast that with 2009. I finished the heavy duty chemos in the end of 2008, but still needed to complete a year of Herceptin infusions, one every three weeks. My first one of the calendar year was around January 14 and each of those infusions cost $4,000.
So how was the play, Mrs. Lincoln?
It’s not easy to tease out profit numbers for insurance companies, but in 2009 the CEOs of the ten largest health insurers made over $228 million in salaries and stock options. That’s a lot of Herceptin.
There is a discussion to be had, I suppose, about whether those sorts of numbers are justifiable. My point today is simply to remind people that the “good old days” of health insurance costs pre-ACA weren’t sustainable. When would the 10-20% increases stop and who would stop them?
This year’s renewal for my household? About a 9% premium increase, admittedly bigger than last year’s 5%. But the deductible and our portion of it has remained the same, as opposed to last year when it rose 150%.
This myth that our healthcare system was A-OK before the big bad wolf government got involved makes me laugh. Our system is less efficient than Iran‘s. And despite spending the most money, we get the lowest quality. Don’t believe the hype about nationalized health care. It works. (when your only argument is… b-b-b-b-but — SOCIALISM! I say it’s time to give it up.)
Because I’m the curious type, I logged onto healthcare.gov to investigate what a similar plan would cost me through them.
That’s where we’ll take up the story next time.