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Individual health insurance is for the affluent and healthy
A new report from the Commonwealth Fund finds that an overwhelming majority--89%--of working-age adults who sought coverage in the individual market during the past three years ended up never buying a plan. A majority (58%) found it very difficult or impossible to find affordable coverage. One-fifth (21%) of those who sought to buy coverage were turned down, were charged a higher price because of a pre-existing condition, or had a health problem excluded from coverage. My own internal numbers here at HealthcareShopper.com mirror these results very closely.
Additionally, the study found that those with high deductible health plans were also more likely to report that they did not get needed health care or prescription drugs because of costs. In addition, many adults with such plans said they had problems with medical bills or were paying off medical debt over time and were more likely to give low ratings to their coverage. This makes me very uncomfortable because the individual health insurance market has been moving toward higher-deductible plans for the past 3 to 4 years. For those who can afford to put aside some savings to cover the higher out of pocket expenses, higher deductible health insurance equates to lower health insurance premiums. For low income people, these high deductible plans may all that they can afford, but the out of pocket expenses may be more than they can handle. We here at HealthcareShopper need to be more sensitive to that issue.
The report, Squeezed: Why Rising Exposure to Health Care Costs Threatens the Health and Financial Well-Being of American Families, by Commonwealth Fund Assistant Vice President Sara Collins and colleagues, is based on findings from the Commonwealth Fund 2005 Biennial Health Insurance Survey.
Posted by Phil Daigle on September 18, 2006 2:00 PM
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First, thanks for your business, Paul. You’ve been a customer of HealthcareShopper.com for 7 years and I really appreciate it. Unfortunately, in that period individual health insurance rates have increased by over 10% each year. Like most people who have had individual health insurance, you started out with a very comprehensive plan, 100% coverage with nominal copays. As that type of coverage became prohibitively expensive, you switched to a high-deductible PPO plan (catastrophic coverage), where you pay for virtually all of your medical expenses until the plan’s maximum out-of-pocket expense is met for the year. If everyone is healthy, you never reach that point. Now even that type of coverage is becoming very expensive - $557/mo for your family.
You say that you “DON'T SEE THE VALUE IN PAYING THIS KIND OF MONEY FOR NO SERVICES COMING BACKâ€Â. One rarely sees a return for catastrophic insurance coverage. For example, you probably carry fire insurance on your home, without expecting any services coming back. People carry “catastrophic†health insurance because it’s the cheapest form of health insurance available and it will protect you from catastrophic loss. In your case, Blue Shield will pay 100% of your family’s medical expenses above $5800 in a year, including prescriptions. They cover you for up to $6 million.
You said, “I CANNOT AFFORD THIS.†If your family’s income is 300% or less of the Federal Poverty Line, your children could qualify for subsidized health insurance. The various options offered by each state can be found online at http://www.coverageforall.org/our_services.htm#options. In California, we expect that universal health insurance coverage for children will become a reality in 2007. As for you and your wife, you can save a bit more on your premium by opting for a still higher deductible. Please call me at 800-557-5693 to discuss the details of your case.
Comments 2
Phil,
I've been a customer of HCS for a few years now, and as a "non insured employee", have been on Blue Shield's PPO 2400/4800 plan for myself and my family. I pay for this out of pocket. My employer doesn't offer insurance anymore.
The cost for this policy was just raised 20% this week, (on top of cost increases that seem to come every year). For the 5 of us, the premium just went from $466 to $577 per month. On top of that, I pay the 2400 deductible per person, per year. If no one in my family uses any healthcare services in a year, I'm still paying out $6924 per year. I DON'T SEE THE VALUE IN PAYING THIS KIND OF MONEY FOR NO SERVICES COMING BACK...
This is for basically "catastrophic coverage" as I also pay for all doctor visits and prescription drugs "out of pocket" at pre-negotiated prices between Blue Shield and the parmacies.
I CANNOT AFFORD THIS.
WHERE ARE THE COMPETITIVE MARKET PRESSURES THAT SHOULD DRIVE DOWN COSTS? WHY ARE INSURANCE COMPANIES MAKING RECORD PROFITS AND RECEIVING FINES FOR DROPPING PEOPLE WHO ACTUALLY RECEIVED THE BENEFITS THEY WERE PAYING FOR? WHY DON'T THE MASSES OF PEOPLE REVOLT AND STOP PAYING THIS?
I'm just a bit upset about my options at this point. I'm ready to nix the whole insurance thing completely, and just pay for services as I need them or better yet...do what alot of people are doing and JUST NOT PAY FOR IT AT ALL.
Any refreshing thoughts on this dilema?
Posted by: Paul Cardey | January 5, 2007 9:36 AM