Monday, August 24, 2009

Premiums Part II: This Time It's Personal

We hear a lot about how expensive the American health care system is. The true costs are obscured for a lot of Americans. Our employer or the government picks up the tab. There may be a problem, but it's not our problem.

Unhappily, this is not the case for me.

It's not that anyone in my family is sick, or that we don't have insurance. We're healthy. We're insured. However, neither Christine's nor my employer pay for our health insurance. We get to purchase our own. We get to pay the premiums. We notice when they go up.

Five years ago, when yet another tech start-up that employed me went belly-up, I did a brief stint as a consultant. I purchased a $1000 deductible plan from Anthem BCBS for a reasonable rate. We kept the plan and over the years the cost bumped up each spring. In the spring of 2008 our premiums were a mostly-reasonable $765 per month. In April we got a premium hike of over 20%. Anthem assured me this was not a mistake. This April they went up again to $1191 per month.

After a 55% jump in two years, I wanted out. It's not hard to think of ways I would rather spend $1200 every month.

As I shopped around for other health insurance options I had an unpleasant discovery. One of my children has a "pre-existing condition". Nobody would sell us a family policy. Nobody would insure my son. This came as a shock. I had assumed "pre-existing conditions" only applied to people who were, you know, sick. AIDS? Diabetes? It has to be something expensive and potentially lethal, right? We had none of that. The kids are never at the doctors and never miss school. I was looking to spend lots of money on an insurance policy that I had no expectation we would really need. Nobody was willing to sell me one.

Because my son was already insured with Anthem, they couldn't reject him altogether. Three of us got our own "family plan" with a $5000 annual deductible from Celtic. My son stayed on his own plan with Anthem. Total cost $657 per month. Cheaper, but with our deductible, we'll pay all our own bills, and insurance covers next to nothing.

This has been an educational experience for me. It is the lens through which I now view health care reform. Shopping for insurance has made clear to me the limitations of relying on for-profit companies to provide health insurance, and the extent of the monopoly power insurers have. No family wants to risk going without insurance. Insurers can raise rates without fear. To the extent that they compete, they compete to get customers who won't require health care. They are very conservative about guessing who those customers will be. For-profit health insurance companies don't make their money by healing the sick. They make their money by avoiding anyone who might get sick.

We hear about the high cost of health care for individuals and small business. The thought of paying $1200 a month in premiums brought that home for me, because I was writing the checks. This situation isn't very different for people who get insurance from their employer. The average employer-sponsored plan for a family of four cost nearly $13,000 a year -- not much less than I was paying.
The rising cost of health insurance is everyone's problem. The for-profit companies we have rely on are part of that problem.

1 comment:

  1. Although I'm sad you had to have the experience for yourself, I'm glad you wrote about it to share- thanks!