Ah, the good old days

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.

Deductible met.

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.

12 thoughts on “Ah, the good old days”

  1. Thank you! There is so much misinformation about the Affordable Health Care Law, people are taking positions against a law THAT IS IN THEIR OWN BEST INTEREST. Stories like yours need media attention rather than focusing on the malfunctions of a website that ultimately can be fixed.; and, citing this as a basis for dismantling a program to provide affordable health care to the uninsured and underinsured. There are so many other benefits under this program that is being ignored. I worked in healthcare for a number of years and witnessed the increase in deductibles, co-insurance, and co-pays. Looking forward to reading your next post on this topic

    1. Thank you very much. Yes, the narrative that has sprung up around the healthcare system is disturbing in its alternate-universe-ness. I’m sure you see way more than me, but why can’t our voices carry?

      By the way, did you see the movie yet?

  2. That malfunctioning website reminds me of when I was attending Laney College in Oakland back in Fall/Winter semester 2008 and they implemented some new software that was supposed to be easier the students (i.e. we could apply for our classes on-line but I couldn’t, I still had to do it with the form and a pen) but was quite the opposite. I was telling myself and other students that the whole program seemed like a Big Fat Scam. Then I see the news yesterday (something I rarely do) and they mentioned the company that coded the website have a history of ripping off numerous companies. Not surprised, I had the same feeling whenever I hear people saying how the site doesn’t work and blah blah blah. I say the same thing I said then: what, is your brain, fingers, and LEGS broke? I’m sure you can fill out a form by hand on paper and walk or drive to the Post Office and snail mail it, that was something we all did before computers made things so easy and us so lazy.

    I’ve been trying to keep track on this issue and from what I see and hear it’s a bunch of dummies who confuse socialism with communism when they’re BOTH 2 different ideologies. Also I don’t want things to go back to when these insurance companies and hospitals regulated on how much they charged you for health care, that was despicable and horrible. But then again you can’t tell people anything these days, they’re too lazy to think for themselves.

    In conclusion I want to drop a link a friend of mines sent me yesterday, a article Einstein spoke about in regards to socialism:

    monthlyreview.org/2009/05/01/why-socialism

    1. Thanks Bootcheese. In my next post I plan to document other, less well publicized failures in execution that I’ve witnessed in my life.

      I read about half that article and I’ll need to get back to it. It’s dense and I had no idea Einstein ever wrote about economics.

      Did you see the video Simon posted — his Dangerous Ideas speech? He makes some really interesting points about Marx in there. It’s long, but worth the time, methinks.

      1. I totally get your article, part of what you’re talking about is this revisionist bullshit that I’ve been seeing way too much the past few years. It’s like people keep trying to change history just to fit their views, another reason why I stay away from blogs. You know what they say about opinions.

        as far as that Einstein article that’s the same thing my friend said that sent me that link, he said the same thing. It was surprising to see Einstein speak on such a subject esp since he’s known for physics. It makes you wonder what other ideas he has about other subjects.

        1. Yep.

          It’s ok on MWF’s post, you don’t need to defend me. He’s my brother. My actual brother. 🙂 We don’t see eye to eye on most anything, but I’ve learned (very slowly over many years) that getting all heated isn’t worth it.

          He sincerely wants my explanation.

          Still, I’m glad you got it.

  3. I have read your post several times and am still having trouble understanding your main point. Is it that because health care costs were increasing prior to ACA, further cost increases with Obamacare should not be seen as surprising or significant? Or perhaps that cost of health care under Obamacare will be less than pre ACA?

    1. Hi Matt,

      I don’t think that at this point I am drawing any of those conclusions. The dominant narrative in the decidedly unliberal media has been that this has been a “disaster.” I am going to get to the hyperbole in a later post, but at this point, I am offering a counter-narrative to the mainstream one. There seems to be a very rapid rewriting of history happening here – that only under the ACA are costs rising, are people losing coverage, etc. That kind of implies that things were good before the meddling government. At this point, I am documenting my own experience as a company person researching health care plans and as a patient, I have a very different experience than what I am hearing. Just the other day, I talked to a broker who said that the 20+% increase he was delivering was because of “all that Obamacare stuff.” I didn’t say this, but wanted to say, ok, what was the excuse in 2002? 2003? 2000? and so on. All those years before anyone beside maybe me knew who Barack Obama was?

      Katie

      1. If you implicate the media, then would think you’d want to cite copious examples to convince readers that you are not the one trying to rewrite history. For example, why can’t the uproar be interpreted as people perceiving a bad situation getting worse?

        Also, doesn’t ‘govt meddling’ in healthcare far pre-date ACA? If you are building an argument that govt needs to intervene because things were ‘broken’ (an argument frequently put forth by this administration), then you’ll need to address why govt wasn’t at the root of breaking the pre-Obamacare system.

        1. No, I don’t think so, Matt. I am offering a personal narrative as a rebuttal. I don’t believe that I need to set out proof. If a person reads my story and thinks I’m making it up, then that’s beyond what I am interested in pursuing.

          Likewise with the second. I don’t think it’s up to me to unravel the history of the health care industry. If I were, I certainly wouldn’t be inclined to lay the blame at the foot of the government without any consideration for the massive influence of greed.

          But I’m not trying to make an argument for the need for the ACA. It’s already the law, no matter how fervently some lawmakers would want us to believe otherwise

  4. If you do not test your claims and assumptions against reason and evidence, then how do you keep your effort from being infected by bias that hinders getting closer to the truth?

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