Health Insurance: Pick your pain.by Denise Early on Sep. 28, 2009, under Health
I spent two hours on Saturday talking to a woman who is finally ready to get health insurance after going without it for three years. Her employer does not provide group health insurance, but gives her $200 per month to buy individual health insurance. At 55 this woman is healthy and her biggest worry is getting into a car accident as she drives around town.
We got on the computer and looked at one insurance company site that allows you to build your own insurance plan. We started with a $1,500 deductible. Now put in the co-insurance amount of 80% for the insurance company, 20% for you. Or you can choose 50/50 split between you and the insurance company.
If you want to see the doctor for a co-payment of $35, adds $80 per month to the premium, so she decided against this “benefit”.
Now put in what you’d like for a maximum out-of-pocket each year. This means a cap on your co-insurance amount (20% or 50% mentioned above).
We got a monthtly premium of $292/month for a plan with no doctor visits and no prescription coverage. She can go to the doctor, but the cost comes under the deductible.
$292 per month is too high by about $100. So we went back and changed her deductible to $5,000 and the monthly premium went down to $195 per month. Remember, this is a plan where she will pay all of her costs until she meets her deductible of $5,000. After she spends $5,000 her plan goes to 80/20, where she will pay 20% of the bills.
After two hours of talking about this and other insurance company options (with talk of politics and people thrown in), I was able to declare this woman an expert on individual health insurance. Now she has to decide if she should pay $195 per month for a plan that will require her to pay all of her medical bills until she spends $5,000. Frankly, she doesn’t have much choice if she wants to stay below $200 per month for her premium.
FYI: This is called “consumer-driven health insurance”, or as I say to the consumer, “You get to pick your pain”.
It reminded me of a conversation I had recently with two Canadians. Their system is so much simpler than ours. Canadians living in British Columbia pay the following monthly premiums for health insurance: individual: $64; a couple pays $98; a family of three or more pays $108 per month.
I’ll write a post on my conversation with the Canadians, but all I can say is that the system in the United States is kind of embarassing when compared to Canada’s system.