Some (personal) Medical Insurance Facts

While the country is swirling with monumental discussion, facts, statistics, opinions, lies and myths about the medical care and medical insurance issues, I thought I would share some of my personal facts regarding my wife’s and my medical coverage; anecdotal though it may be.

Medical Insurance:

When we retired in 2006, our group (state public employee) medical insurance premium for our joint coverage began billing us $893.76 per month. Prior to retiring our employer paid for this coverage. Today our premium is $1,157.46 – a 29.5% increase in premium costs over 6 years. The current rate of inflation is 2%.

Last year our monthly health care premium actually went down from $1,159.52, to $1,157.45 this year – a $2.07 per-month decrease. However, the plan has changed whereby we now must pay $500 out-of-pocket before anything is covered. So essentially, our medical costs have actually increased 3.5% over last year.

This year, our insurance provider is requiring all customers to participate in a mandatory “Health Engagement Model (HEM) program”. A surcharge (penalty) of $17.50 per person will be added to our monthly premium if we do not comply with the HEM requirements, which consists of watching online training videos. Between my wife and me, we have spent six hours on this process. Emphasis for those of you who decry government interference regarding your health care, note that these are private company hoops we are having to jump through – not government.

Over these six years, our group coverage has forced us to change insurance companies four times. As a result, we have had to change from medical providers and facilities with whom we have established doctor-patient relationships over years. Emphasis again, for those of you who decry government making decisions about your health care, note that these are private companies, making choices for us who we will be allowed to see – not government.

Pharmaceuticals:

One prescription my wife takes cost $543.78 for a 3-month supply in 2007. This same prescription charges the insurance company $912.58 today. This is a 68% increase in the cost of this drug over five years. Our co-pay for this prescription was $15, it is now $75.

… researchers’ estimate is based on the systematic collection of data directly from the industry and doctors during 2004, which shows the U.S. pharmaceutical industry spent 24.4% of the sales dollar on promotion, versus 13.4% for research and development, as a percentage of US domestic sales of US$235.4 billion. [1]

Dental insurance:

We discontinued dental insurance as the premium amount plus the out-of-pocket costs for non-covered expenses was more than simply paying for services directly.

Final thoughts:

Our medical insurance premium, deductibles and co-pays consume one-third of our disposable income. I often wonder how many Conservative local business owners would much rather I spend that $19,800 a year in their local restaurants and businesses than send this money to out-of-town insurance companies? Multiply my $19,800 by the thousands of people like me – this amounts to millions of dollars denied the local economy.

Consider that for every car you buy, every bag of groceries, every movie ticket, every magazine, every gallon of gasoline… the cost of employee medical care premiums is factored into the price of what we pay for those goods and services. Why wouldn’t Conservatives rather want to either A) reduce the cost of their goods by that factor and increase sales, or B) pocket the additional profit from the reduced overhead, by having their employee insurance costs picked up by a single payer government plan? A single-payer plan seems like a win-win for every business in the county except medical insurance companies. Our business leaders must be the laughing stock of the remainder of the developed industrial world.

My final thought on the ACA (aka: ObamaCare)

It appears to focus of this law is directed entirely on insurance coverage but little on containing the rise in medical costs and the demise of medical outcomes. But hey… it’s a start.

References:

1. Big Pharma Spends More On Advertising Than ResearchAnd Development, Study Finds, ScienceDaily.com, January 5, 2008.