Every month I receive a statement from my health insurance, which I ordered up through the marketplace, www.healthcare.gov. It’s a frustrating experience. Before I tell you why, let me give you a bit of a rundown on my personal situation.
I have a family of five and Uncle Sam said we must have insurance, so I reluctantly bit the bullet and said yes. I’m self-employed, the only earner in my household, and I make a comfortable income for where we live. I pay about 20% or so in taxes after all the dust settles. I try to pay cash for everything, don’t carry a balance on my credit cards and have a vehicle loan for newer model car. Unfortunately, I have a solid amount of medical and student debt, so although I can pay bills, there’s more debt than bank account at the end of the month, but I continue to chip away at it. If I were to estimate, I’d say I’ve probably spent upwards of $20,000 over the last three years on medical expenses. Much of that was on existing debt, the rest as it was incurred. If only I’d had health insurance…
So I got some. Hell, I had to. The Man kept wanting to fine me because I didn’t have any*. My only rule was that it had be entirely subsidized by the rules put in place with the ACA. The reason being that I did not want to burden myself with a payment that I might not be able to make during a slow period of work, which definitely happens when you’re self-employed. So we went and saw a local expert, checked out the plans online and went with one that was covered by the subsidy as it was determined based on my income, family size, state of residency, phase of the moon and that voodoo that Uncle Sam do do. Or doo doos, as it were. So what did we buy?
For $1426.90 per month my family and I now have coverage! It’s a basic Bronze level plan, has a mere $12,000 deductible… Covers basically 80/20 once that deductible is met. For those people who don’t get how insurance works, this means that if I want to take advantage of the vast majority of the benefits of my insurance plan, I must not only pay the monthly premium every month(covered by Uncle Sam**), I must also pay an additional $12,000 out of pocket in medical expenses for that year.
I’m going to be honest with you, even in the most expensive year I’ve ever had, I’ve barely incurred $12,000 in expenses, and I’ve never come close before or since that time, not even with the birth of my children.
So, to sum it up, for this insurance to be of any real use to me, $29,122.80 must be spent between the premium and verified medical expenses. Interesting. Even more interesting is that when you turn it around it means that my insurance company receives some $17,122.80 a year for doing nothing. Hmmm.
So why the Hell would I want something so useless? Damn good question, and that is why I resisted getting coverage for so long. It was cheaper to pay as I go, even if it meant going into debt, than it was to carry an insurance policy.
“But the policy didn’t cost anything, the government paid for it!” you say.
Oh? Who do you think pays the government? And for the record, my tax bill for 2018 slightly exceeded the amount paid in premiums, so you can be damn sure I’m contributing my share.
So what if, instead of paying the insurance company that premium, we opted instead to apply it towards my my medical debt and expenses? Well, all outstanding bills would be paid in the first year plus a few of my incurred costs for the year. In the second year I’d have no medical debt and even with the costs of medications and doctor visits, I should be net positive some $5,000 – $10,000. Interesting.
I’m not opposed to insurance companies, but if you do the math, it’s pretty clear that despite all their complaining, chest beating and outraged Congressional stooges, insurance companies came out of this deal better than they went in. They have some 30 million extra customers which they’re now collecting guaranteed premiums on. And, if I were a betting man, I’d say most of those policies carry a high deductible, which means they aren’t paying out if they can avoid it. 30 million people, new customers paying, on average, $400-$1100 per month. Maybe it’s just me, but that doesn’t sound like a very good deal for Joe and Jane Taxpayer. It does sound like a very good deal for the very wealthy, who are invested in these corporations and see healthy financial returns. Maximize that value to the shareholders! It’s also a really good deal for your typical Congressman, over 50% of whom go on to work as lobbyists for these firms after their “service” ends.
Now that’s interesting. If only we had a better way, a better model, for healthcare in the richest nation on Earth. Something to consider.
* – Yes, President Trump did get the fine repealed, after a couple of years of it being in place. One of the few things he’s done that has benefited most Americans.
** – As noted in the piece, I pay roughly the same in taxes as it costs for a year’s premiums.